DEDA President's View: Meeting workforce, housing needs can maintain Duluth's momentum

Embrace the rapidly building momentum in our beloved city of Duluth -- embrace it and look for opportunities to contribute to the success and vitality of our community's economy.

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Denfeld’s 1947 boys basketball team is the only Denfeld basketball team to win a state title. The team’s head coach was Lloyd Holm. Team members were Rudy Monson, Larry Tessier, Paul Nace, Kenneth Sunnarborg, Eugene Norlander, Howard Tucker, Tony Skull, Jerry Walczak, Bruce Budge, Keith Stolen and student manager Bob Scott.

Embrace the rapidly building momentum in our beloved city of Duluth - embrace it and look for opportunities to contribute to the success and vitality of our community's economy.

Along with Duluth's economic foundation of timber, mining, and transportation, other industries continue to bring diversity to our local economy. These include engineering, hospitality and tourism, higher education, health care, craft beverages, aviation, outdoor recreation, energy, and retail.

Our broadening economic base softens the peaks and valleys of a traditional economic cycle. Growth and diversification should continue in our community as long as we are able to recruit and generate the workforce needed to allow growing companies to scale appropriately.

A key component to attracting workforce is housing. We've asked for housing, and we are getting it. Bluestone, Endi, Kenwood Village, and District Flats bolstered our housing stock. 2019's rental housing development continues to be positive as construction is underway for new housing in the Central Hillside, Lincoln Park, and elsewhere. Developers also are eyeing other locations across our city, and work is expected to begin on the recently announced 15-story housing and commercial development downtown on Superior Street.

While rental-housing developments are booming, opportunities to build single-family homes remain. As our community wrestles to find suitable areas to develop, we should look hard at opportunities on and around underutilized areas in Lester Park and Central Hillside.


On the waterfront, opportunities to invest continue. The port generates more than $1 billion in economic activity for our region and is a tremendous asset. The prospect of developing Lot D as well as the collaboration by the Duluth Economic Development Authority, the city, Visit Duluth, the Port Authority, and the Duluth Entertainment Convention Center to bring inland cruise ships here continue to bring excitement to the waterfront.

The planned medical district developments will have tremendous impact on the vitality of Duluth. Essentia's proposed development and its commitment to this community should be celebrated. St. Luke's expansion plans will further strengthen the district. With this development will come opportunities for additional housing, retail, and hospitality.

Another area of focus is Opportunity Zones. This federal program brings me confidence for our city as both local and outside investors look to capture tax incentives related to redevelopment efforts in our downtown, medical district, Canal Park, and Lincoln Park neighborhoods.

Entrepreneurship is also on the rise across the city. One example is Lincoln Park, where revitalization is building a popular destination for locals and tourists alike.

What do we need to keep an eye on?

As mentioned, employers are still struggling to fill job openings. We need to focus significant energy and resources on this issue in 2019. This includes investment in housing, training, recruitment, trailing-spouse opportunities, and more.

Our city sales tax continues to increase and is currently over 8 percent. This puts us on the high end of the spectrum for our state, which isn't helpful in attracting commerce. Growing our economy to add to our tax base will better position us to reduce rates to a more competitive number.

At a national level, the Federal Reserve is raising interest rates as unemployment remains at record lows and inflation begins to creep up from prior years. As a banker, I've noticed consumers and business owners paying more attention to rates and financing costs as they think about investing in growth. The inevitable rate increases could cool our positive trajectory but shouldn't have a dramatic impact on us for a couple of years, barring any significant policy or economic factors that would increase the speed at which rates continue their ascent.


While dusty and inconvenient at times, we managed through the first phase of Superior Street's reconstruction, and the final product is great. This work will continue with two more phases in coming years, temporarily impacting many businesses. We must support these businesses throughout the construction.

Overall, 2018 was a good year for Duluth. With strong local leadership, I'm hopeful 2019 will be even better. Our way forward as a community will be to continue to work together and support each other while capitalizing on our current momentum. This collaborative spirit and effort will help to ensure our city's and region's future success.


Tim McShane is president of the Duluth Economic Development Authority. He wrote this at the request of the News Tribune Opinion page.

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