Should proceeds of Cirrus property sale go to fund local broadband network in Duluth?
DEDA commissioners expressed concern about putting "the cart before the horse."
DULUTH — A proposal to direct the proceeds from the sale of a facility to Cirrus Aircraft into a dedicated fund intended to support local efforts to launch a city-owned broadband system received a lukewarm reception at a meeting of the Duluth Economic Development Authority Wednesday evening.
A “statement of purpose” attached to a resolution authorizing the sale of an aviation incubator building to Cirrus for $3.45 million said: “Proceeds of the sale will be used to fund the city’s broadband internet project.”
But DEDA commissioner and at large city councilor Arik Forsman said he could support the resolution only with the understanding that it would not obligate funds for a project that has not yet received council approval.
Chris Fleege, Duluth’s director of planning and economic development, assured commissioners that any future use of the funds still would require City Council action.
Referring to the broadband fund, Fleege said: “It’s a place to park the money.”
Already, the city has directed about $2 million into the broadband fund, with half that money coming from the American Rescue Plan Act and the remainder coming from a decommissioned tax-increment financing district.
Fleege said the proceeds from the sale of the incubator building to Cirrus would bring the balance in the broadband fund to about $5.4 million.
“The concern is really that if it goes into the general fund, it can get swept away and there’s no earmark. It’s like a giant sea of cash,” he said.
DEDA Commissioner and 3rd District City Councilor Roz Randorf, moved to amend the resolution’s statement of purpose to say proceeds from the property sale to Cirrus “may be” used to fund the city’s broadband internet project, “subject to council approval.” Her motion was seconded and approved by a 6-0 vote before the amended resolution passed by the same margin.
Following the meeting, Forsman said, “The council hasn’t had a discussion on allocating that money. I know the administration has framed that that money could be used for a broadband project in the past. So it wasn’t new. But I really wanted to make it clear that three councilors weren’t putting our cart before the horse on whether that’s actually going to be the decision.”
He said he expects to hear more from city administration about the prospective broadband project this summer.
“So we’ll let them make their case on whether that is indeed the right use for that money," Forsman said. "But certainly, as you’ve heard with budget discussions recently, $3.5 million could be used in a lot of different ways. So, I’m going to personally be just looking at it through the lens of what’s the highest and best use for this one-time resource that we have.”