Spirit Mountain strapped for cash
The City Council will consider tapping the tourism tax fund to provide financial help to Spirit Mountain. Despite having its best season ever last year, the ski area needs cash, and the City Council will consider a one-time appropriation of $250,000.
The City Council will consider tapping the tourism tax fund to provide financial help to Spirit Mountain.
Despite having its best season ever last year, the ski area needs cash, and the City Council will consider a one-time appropriation of $250,000.
The issue will be discussed at Thursday's agenda session for a likely vote at next week's council meeting.
Monday night, the council's Finance Committee looked at the overall tourism tax picture.
"It's a facility that is almost 27 years old and in critical need of repair and maintenance," said Huck Andresen, chair of the Spirit Mountain Recreation Authority. "We need an infusion of dollars."
He said the authority will again seek bonding money from the state for repairs and maintenance.
Renovating the ski area will cost about $3.5 million. Spirit Mountain hopes to get most of that from the state, although a similar request was denied in 1999.
The $250,000 is to help Spirit Mountain avoid going into the upcoming season with a deficit due to increases in operating costs.
The operation took in just over $3.2 million last fiscal year. It paid about $460,000 on debt and carries a million dollar payroll.
"The facility has been cash strapped for as long as I've known," said executive director Rick Certano. "We can either make the debt payment or rebuild the facility, but we can't do both."
The requested money would come from the undesignated balance of the tourism tax fund.
The city's layer of tourism taxes are expected to generate about $4.4 million this year. More than half of that revenue is restricted to certain uses, with the remainder parceled out to tourism-related activities.
The Spirit Mountain share has been declining annually. For 2001, it is $39,800, compared to a high of $437,000 in the past.
Andresen said it is basically a wash, since the city charges the authority for administrative costs.
"We're not looking to take those funds from any other tourist entity," he said. "We don't have a proposal -- the whole tourist industry is a team, and we're here to support every one of them."
The council also heard from organizations that get tourism tax money on how they spend it.
It was a presentation likely to be repeated during fall budget season, especially if there is political pressure to use some of the discretionary money for other city needs.
The lion's share now goes to the Duluth Convention and Visitors Bureau, which will get about $1.7 million this year.
Bureau board member Brian Daugherty said it was an investment that drives the entire tourism community.
"Overall, there is a $400 million dollar economic impact -- direct, indirect and induced," he said. "I claim we are very successful."
Smaller shares of the tax money go to the St. Louis County Heritage and Arts Center, the DECC, Public Arts Commission, Sister Cities, Spirit Mountain, Lake Superior Center and the Lake Superior Zoo.
Administrator Mark Winson said the money is also used for donations to various events such as the John Beargrease Sled Dog Race and to pay tourism-related expenses.