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Duluth mayor proposes $24M investment at Spirit Mountain for improvements

Mayor says investments will help the struggling recreation area get back on track financially.

Duluth Mayor Emily Larson wants to invest $24 million at the Spirit Mountain Recreation Area, which has struggled financially in recent years but has stayed afloat thanks to bailouts from the city

At a news conference on Thursday, Larson announced the capital improvement plan, saying for years it "has felt like our entire financial strategy for this incredible regional asset has been based on Band-Aids of emergency cash infusion."

"Spirit Mountain is caught in a continual lose-lose loop of financial calamity, facility maintenance crisis and continual operational challenges," she added. 

Larson said is proposing to launch a $24 million capital reinvestment program that will be paid for by state bonding (50%/$12 million), as well as city dollars via local tourism taxes (25%/$6 million), and by Spirit Mountain (25%/$6 million)

“Now is the time to do this with Spirit Mountain,” Larson said. “No more Band-Aids. It's ready for a good fix. There is a saying, 'If you can’t get out of it, get into it.' So, let’s get into it.”  

Among the various capital investment projects for the recreation area Larson is proposing: updating alpine ski and snowboard infrastructure; completing the Nordic skiing and mountain biking trail system; renovating the Skyline Chalet and campground; connecting Spirit Mountain's recreation facilities to larger recreational facilities in the area (Lake Superior Zoo, area trails); and making improvements to the area's summer Adventure Park by adding a high ropes course, replacing the mini-golf course and updating the coaster.

These improvements are based on the Spirit Mountain Task Force report that was released earlier this year. It found doing this would increase Spirit Mountain's annual economic impact from $22 million to $39.9 million. 

The task force's report found these improvements would also increase the number of visitors by 50,000 per year, from 250,000 now to 300,000. And it would create 205 new jobs, bringing the total number of jobs at Spirit Mountain to 500.

Larson says not only will these projects improve Spirit Mountain's financial performance, but it will ensure the recreation area continues to be an asset in Duluth for another generation.

Spirit Mountain has made few infrastructure improvements since it was built in 1973 due to its financial arrangement that often only allows it to cover operational costs, the Star Tribune explains.

The investment Mayor Larson is proposing would be the largest at Spirit Mountain since it was built, the paper notes. In the years since, the City of Duluth has spent $19.8 million in tourism taxes and $19.3 million in bonds to support operations at the recreation area, including the city spending an average of $1.2 million a year over the past five years to subsidize Spirit Mountain.

But plans to upgrade Spirit Mountain rely heavily on whether the Minnesota Legislature approves funding for the project. If it does get funding from the state bonding bill in the next session, work could begin as soon as 2023 and is expected to take several years.

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Next steps

Larson and the City Council will work on including Spirit Mountain in the city's state bonding requests in 2023. 

To prepare for the bonding request, the Duluth City Council will consider a resolution at its May 10 meeting to approve an agreement with an engineering firm to create a predesign report that would be presented to the State of Minnesota later this year. 

This predesign would not cost more than $102,500 and would be paid for by the Spirit Mountain Recreation Authority, city documents show.

The Duluth City Council is also considering a resolution at next week's meeting to forgive $900,000 in debt related to the $1.2 million line of credit the city made available to Spirit Mountain. 

“Eliminating this debt will help Spirit plan for the future because it will allow the City to negotiate a debt repayment schedule while weaning Spirit from City operating subsidies,” Larson said. “… The most important reason to do this is that another recommendation from the Task Force includes the potential to enter into a long-term operational lease for facility management … no reasonable operator would demonstrate even passing interest to take on the financial debt for an asset they simply do not own.”  

Meanwhile, the City is going to ask the Spirit Mountain Board of Directors to take several steps to improve operations. Among them: increase revenue by modestly increasing prices, checking tickets and improving food and beverage services; increase the variety of users via strategic marketing and improving services for mountain bikers, Nordic skiers, snowshoes and ice skaters; reduce greenhouse gas emissions by replacing 1970s-era infrastructure; and lower barriers for participation by revitalizing partnerships with youth-serving organizations and schools, have lower-cost days, and solicit grants and donations to waive or reduce fees.

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