Minnesota Gov. Tim Pawlenty said Tuesday that he would support partial state funding for the new arena at the Duluth Entertainment and Convention Center (DECC) -- but only if the mechanism for local funding, a 0.75 percent bar and restaurant sales tax, is approved by referendum.
The new arena is projected to cost $67 million. Of that, the local tax is expected to raise almost 30 percent of the needed revenue. State funds would provide half of the money, with the remainder coming from the DECC and from the University of Minnesota Duluth, whose men's and women's hockey teams would play in the new, larger arena.
The Duluth City Council has approved the tax hike and sent it on to the Legislature for its approval. It seems to us that if local officeholders are willing to risk their political futures on another tax hike, that should be sufficient to show local support for this project.
Each biennium (except the last one), the Legislature approves a bill to finance capital improvements around the state. Earlier this year, the bonding bill that was delayed last year because of partisan bickering, was approved. It included $20.6 million for a new Minnesota Zoo exhibit in Apple Valley that required funding from no other source to get the state funds.That sets a powerful precedent.
However, if the governor says a referendum is needed for his support, then Duluthians have little choice but to hold one.
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The arguments for the new arena are strong. Most importantly from our view, it will allow the DECC to bring in more and larger conventions. DECC Executive Director Dan Russell says that the DECC has to turn away conventions regularly because the existing arena is in use half the year by UMD's teams. Don't misunderstand, UMD is the DECC's primary tenant, and a good one, but if the existing arena could be opened up for other uses, Duluth's convention business could continue its strong growth. That in turn will generate more revenue for both the city and the state through already existing tourism-related taxes.
The more popular argument for the new arena, at least among hockey fans, is that it would allow UMD to move out of what is now the oldest and smallest rink in the Western Collegiate Hockey Association. The new arena would allow UMD to better compete in Division I collegiate hockey.
Regardless, if the governor wants a vote, let's give it to him sooner rather than later so that the state funding can be included in next year's state bonding bill. Hold a special election and prove that this community supports the new arena.
