Duluth Mayor Don Ness returned to the office after Thanksgiving weekend to hear the City Council had voted him a 25 percent raise, to $97,500 a year—the first raise since his election in 2007, and the first raise for any Duluth mayor since 2000. He promptly and politely turned it down.
“Over the years, I’ve made a lot of tough and unpopular decisions that have asked for sacrifice from others to help solve our problems, and many in Duluth struggle with poverty or rising costs on a fixed income. I questioned if accepting a raise in this way would burden my ability to lead,” he wrote on his Facebook page before stating his reasoning more formally at a news conference. He added that he didn’t need the money (though he’s the sole breadwinner for a family of five) and that, while compensation for the city’s mayor should be adjusted upward, such a discussion should take place after the next election.
It was yet another remarkable scenario in the story of this mayor. For if one could argue that any politician deserves a raise, it would be Ness.
When he took office in 2008 at the age of 33, Duluth was staring down several barrels of financial calamity familiar to numerous cities: a huge structural deficit, an evaporated reserve fund and a federal lawsuit over Duluth’s aging infrastructure. The city was by no means on death’s door; it was, and remains, a regional health care and retail center, as well as a popular tourist destination. But given what Duluth was facing, it looked as if the city would continue to struggle, if not slip backward, held back by the chains of its Rust Belt history.
Despite his age and youthful appearance, Ness was no political neophyte when he became mayor. He had served on the City Council for eight years and also worked for 10 years as campaign manager for James Oberstar, who represented the U.S. congressional district that includes Duluth from 1975 to 2011. Now a senior adviser for the transportation and infrastructure practice at National Strategies LLC, a Washington, D.C.-based consultancy, Oberstar praises Ness’ dedication and ability to listen. “There are a lot of folks who say, ‘Well, what do you think about this?’ and meanwhile, in those days, working on their BlackBerry or looking out the window as you answer. Not Don Ness. He asked, he listened, he made notes. He was a very conscientious, very deeply concerned person who, by that character, won people’s trust.”
Oberstar says that Ness brought those qualities to his work in Duluth. “As mayor, he had the most difficult fiscal situation facing him,” he says. Though Ness was not the first mayor to face such circumstances, he was able to add a different dimension, Oberstar says. Ness formed advisory groups on different city issues—finance and wastewater, for instance—and worked with them, listening to their ideas. “So when he moved forward on policies, he had a ready core of support that said, ‘We bought into this.’ He was able to build community support for initiatives that would have been under other circumstances intractable.”
Under Ness’ leadership, Duluth has triumphed over dire challenges and come through the Great Recession and a devastating 2012 flood with prospects brighter than it’s seen in several decades. New employers have moved in, many older ones are adding workers, and Ness and the City Council think that enough money will come in because of business expansion that a raise in property taxes will be unnecessary for 2014. As he asserted in his March 2013 State of the City address (which he posted on YouTube), the years ahead represent a new chapter for the city.
Duluth-area employment at a glance
Job vacancy rate, northeastern Minnesota...
3.8 percent (5,206 jobs open) 
Job vacancy rate, state of Minnesota...
2.8 percent 
Project job increase by 2020, northeastern Minnesota...
Jobs added, Duluth, 1Q12-1Q13...
Unemployment rate, Duluth, October 2013...
4.7 percent 
Unemployment rate, Minnesota, October 2013...
 for the three-month period ending June 2013
 lowest rate since November 2007
Source: Minnesota Department of Employment and Economic Development
Now in his second term (he ran unopposed in 2011), Ness would never say that he’s turned the Zenith City around on his own. He freely acknowledges his predecessors. He also cites the many business leaders and economic development entities that have helped bring new companies and new jobs to Duluth. And he’s frank about the challenges that now sit in his in-box.
But Ness, by virtue of his job title and visibility, is the chief storyteller reversing what he calls a previously “ongoing negative narrative about Duluth.” In the past decade, he says, “there’s been a true shift, if not sea change, about how people see the community, both from within and from the outside. And that’s critical in terms of moving the community forward. That’s because investment requires confidence and optimism.” In the past year, all of Ness’ work seems to have come together, and people and businesses are taking notice.
Bridges to better days
Speaking from an old but spacious City Hall office in early November, Ness is dressed in a suit and a plaid shirt (not Northland flannel, by the way). His mood is thoughtful, as befits the cool, gray afternoon outside. “We’re seeing job growth—good paying jobs that can support families,” Ness says. “There is a growing sense of pride in Duluth’s role in the Upper Midwest and how our people see our community.”
Such sentiment is in stark contrast to how people were feeling in 2008, when the city was looking into the abyss of a $6 million deficit, with nothing in its general fund reserves. The city even discussed the possibility of bankruptcy.
To balance its budget, the city, under Ness’ leadership, cut some services that he describes as “good services, but not core,” including a neighborhood pool, a dining service for seniors, the Chester Bowl ski jump and the Lake Superior Zoo. These operations “all had constituencies, but they were inefficient for the city to deliver.” Nonprofit organizations have picked up most of the services.
In addition, the city reduced by more than half a projected $405 million retiree health care liability, primarily by moving employees and retirees to a health plan with higher co-pays and deductibles. Local unions—and in Duluth unions are powerful—fought this move to the state Supreme Court. Ness and the city won the battle.
Since then, the city’s reserves have gone from negative $1.3 million to $7.7 million in the black, allowing the City Council to approve a $76 million general fund budget for 2014 without raising property taxes.
In addition to its budget challenges, Duluth was being threatened with a multimillion-dollar federal lawsuit over sanitary sewage overflows into Lake Superior. Ness and the city got to work, and have since eliminated the problem “for the first time in our city’s history, two years ahead of schedule.”
By tackling financial and infrastructure challenges, Ness argues, Duluth has earned a sense that “we can solve problems.” At the same time, he says, numerous projects and initiatives have sprung to life; businesses have been moving in or expanding. “We’re seeing how success becomes the foundation for the next success,” he says.
Entrepreneurs are building on that foundation. There’s Locally Laid, a pasture-raised egg company that was one of four finalists for Silicon Valley company Intuit’s small-business competition for a free Super Bowl commercial. Locally Laid, which started selling eggs in 2012, operates in nearby Wrenshall, but its owners reside in Duluth, and city residents and businesses rallied behind plucky “LoLa,” the company’s spokeschicken.
Duluth also is participating in the craft beer boom, with Lake Superior, Fitger’s and newcomer Bent Paddle the best-known braumeisters outside of the city.
Then there’s Chaperone Records, which released its first record in August 2012. Chaperone has put out nearly an album a month since its founding, “which is a little ridiculous,” founder and lifelong Duluthian Bob Monahan admits. But it does point to the demand among local musicians for production and distribution. Chaperone sells not only CDs and downloadable versions—for some artists, it also produces vinyl versions.
“There wasn’t any active record label in Duluth,” Monahan says. Chaperone works with artists who are “growing and who are actively pursuing that higher level of their career,” he adds. Monahan says that the label has exceeded his expectations, evidence of the local music scene’s vibrancy.
Among the city’s more established companies is women’s clothier Maurices, which now employs 400 in its collection of downtown offices. (The company will move into a new office building on Superior Street that’s expected to be ready for occupancy by the end of 2015.) President George Goldfarb says that Maurices recruits many of its staff from Twin Cities-area retailers. Getting them to come to Duluth has grown easier in the past few years.
“I look at what the city has done with the lakefront; I think people are really interested in recreation, the bike trails,” he says. “I think of the progress we’re making downtown,” he says, citing the new downtown Sheraton and a theater district anchored by the Zeitgeist art-house cinema. “I think it’s a much better face,” Goldfarb says. “That’s why we’re investing over $50 million in downtown. We believe in this city.”
Goldfarb says that his company plans to hire 100 more people in the next year. That will help support the 60 more stores Maurices plans to add in the coming year, atop the 950 it has now.
New jobs also have been coming via the city’s growing aviation sector. In January, Duluth became home to a new commercial aircraft maintenance business, operated by Illinois-based AAR Corporation in a long-empty facility once owned by Northwest Airlines. AAR, which has added 276 jobs to the local economy, joined Cirrus Aircraft and Monaco Air as a keystone of a growing aviation cluster in the Duluth area.