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Innovative Duluth

A special report on how the North Shore city is reinventing itself.

Innovative Duluth
Photo by David Barthel

There’s a slogan Duluth’s Lincoln Park neighborhood uses to brand its revitalized commercial district: “Crafting Something Great.” And in a sense, it’s a phrase that could describe ambitious efforts happening throughout the city. Located just west of downtown, Lincoln Park was a solid working-class neighborhood during Duluth’s industrial heyday, but as heavy industry began to disappear in the 1970s, the neighborhood fell into economic decline.

Attracted by the neighborhood’s location, solid buildings and low rents, a new generation of entrepreneurs are working to revitalize Lincoln Park. A few years ago, these newcomers, in alliance with existing businesses in the neighborhood and several nonprofits, developed what they’ve named the Craft Business District. This homegrown economic-development idea has brought new life to a long-distressed area.

“What I love about who we are is that we don’t wait around for other people to give us solutions,” says Emily Larson, Duluth’s mayor since January 2016. “We see our challenges, we identify opportunities and then we establish the partnerships to get it done.”

Duluth’s renaissance began during the administration of Don Ness, Larson’s predecessor. While Ness helped get the ball rolling, the city now has its own momentum. Through its utilities and health care providers, educational institutions, private enterprises, arts and entertainment community, and busy transportation hubs (air, rail and water) Duluth is renewing itself; it’s becoming a vibrant city where, for the first time in decades, people are deciding to move there because of its location, rather than despite it.

City leaders acknowledge that plenty of challenges remain as Duluth transitions from a century-old view of the world to one that encompasses more industries, a rapidly changing economy, technology advancements and 21st-century lifestyles. The city needs to invest more in its roads and infrastructure, retain more college graduates to work and live there, and attract and retain ethnically diverse talent. Affordable housing and ensuring opportunities for the city’s low-income residents also are key issues.

Still, Duluth is well-positioned to tackle these challenges. It has a diversified economy and a low unemployment rate that has been in sync with the state’s. With demand for workers rising, the city’s employers and economic development entities have been making headway in attracting and retaining talent, as well as further improving its education and workforce development. The city’s vibrant arts and entertainment scene, along with a growing list of outdoor activities and venues have helped place Duluth on many national top-10 lists for best places to enjoy the outdoors. Those amenities are not only luring record numbers of tourists, they’re helping attract new residents and families.

A diverse economy

Duluth was founded to take advantage of the region’s two greatest resources: iron and timber. While both are still important to its economy, Duluth is less reliant on extractive industries and heavy industry than it was 30 or 40 years ago.

Duluth is the gateway to the North Shore. It’s home to numerous attractions and small manufacturers that have carved out distinctive industrial niches, such as GPM Inc., a manufacturer of slurry pumps sold to mines worldwide. Another is Alabama-based Altec Inc., which manufactures aerial lift trucks that can reach up to 150 feet. Altec employs 229 people and says it could hire an additional 100; the city is seeking a state grant to help the company expand even more.

As in most successful cities, the “eds and meds” sectors have a significant presence in Duluth. In addition to the University of Minnesota-Duluth (UMD), the city is home to the College of St. Scholastica (whose schools include liberal arts, education, business and health care) and Lake Superior College, a member of the Minnesota State community college system. Health care providers Essentia and St. Luke’s have large campuses in the city’s downtown, as well as satellite clinics throughout the region.

Duluth International Airport

Total flight numbers for Duluth International in 2016:
8,977 Commercial flights
26,876 General Aviation
3,148 Military flights
DEED, Duluth Airport Authority

According to the Minnesota Department of Employment and Economic Development (DEED), there are 317 business establishments operating in health care and social assistance in the city of Duluth, which provided more than $720 million in payroll through the first three quarters of 2016. These organizations were responsible for 18,403 jobs, accounting for 31.4 percent of total employment in the city.

Tourism also is a major part of the city’s economy, accounting for nearly 10 percent of total employment, according to DEED.

But the sector that has the city flying particularly high is aviation. Duluth might seem too far off the beaten path to sustain much of an aviation business, but it has been home to the 148th Fighter Wing of the Minnesota Air National Guard since 1948. What really put Duluth on the aviation map was Cirrus Aircraft, which has built its piston-powered general-aviation planes in Duluth since 1994. Cirrus’s Vision Jet, which began deliveries in late 2016, is the world's first single-engine jet for private pilots. With its lightweight design and low cost (under $2 million), the Vision Jet is positioning the company as an innovative global industry leader in personal aviation.

Another pillar of Duluth’s aviation sector is Illinois-based commercial aircraft maintenance company AAR Corp., which has occupied the former Northwest Airlines service facility in Duluth since 2013. A long-time service provider for Air Canada, AAR Duluth recently announced that a new customer would soon be using its services.

Both Cirrus and AAR are looking to hire more employees. AAR is looking to add about 15 to its head count of 385; Cirrus, which employs about 1,000, wants to fill more than 200 new positions. Finding skilled aviation craftspeople is challenging because demand outstrips supply. In addition to reaching out to colleges with aviation programs, including Duluth’s Lake Superior College, these companies are spreading the word in other ways. Cirrus, for instance, has billboards and bus ads simply saying, “Join Us.” Even if locals don’t apply, they might have friends elsewhere to whom they can spread the word.

In total, Duluth’s aviation cluster comprises 30 suppliers and related businesses. They include American Precision Avionics (a producer of wiring harnesses and cables), GreyStar Electronics Inc. (electronic components manufacturer), Vishay HiRel Systems LLC (magnetic components supplier) and Hydrosolutions of Duluth Inc. (high-precision metal forming and cutting). Many of these companies also make products for other industries, including defense and medical equipment. A particularly distinctive member of the Duluth aviation cluster is Monaco Air Duluth LLC, a supplier of general aviation services to noncommercial aircraft. In 2016, Monaco Air opened a new $4 million terminal at the Duluth airport that tripled its previous space.

Duluth International Airport is the foundation for economic activity for the city’s aviation companies and their remarkable job growth, says airport executive director Tom Werner. “You can’t have any of that without the right conditions for business activity. And it all starts with our infrastructure.”

That infrastructure has undergone more than $120 million in improvements in the past decade. A $78 million terminal, completed five years ago, updated the passenger area to make it more welcoming. Reconstruction of two of the airport’s three runways is underway and expected to be completed in 2019. Werner says the updated 10,162-foot runway should have 30 to 40 years of life. “It’s necessary if we’re going to continue supporting the type of aviation growth that we’ve seen,” he says.

Epicurean has earned an international reputation for its cooking utensils made from recycled or repurposed materials.

Made in Duluth

Cirrus is just one of several Duluth-based manufacturers with innovative approaches to product development. Clearwater Composites is using advanced engineering and manufacturing techniques to build carbon fiber products for use in drones, robotics and industrial equipment. Another innovator is Ikonics Corp., which has evolved from a screen-printing equipment supplier to a developer of high-tech printing technologies used by aerospace and automotive clients to develop lightweight parts.

When it comes to homegrown inventive thinking, one of Duluth’s chief innovation engines is the Natural Resources Research Institute (NRRI), part of UMD. Founded in 1983, NRRI’s mission is to deliver research solutions to balance the economy, resources and environment for resilient communities. Its research staff focuses on developing new applications for the state’s timber and mineral resources. NRRI has “three general steps we look at in our approach to innovation,” says executive director Rolf Weberg: repurposing waste, adding higher value and embracing sustainability. NRRI’s overarching goal is to “utilize natural resources in an environmentally responsible manner,” Weberg says.

NRRI is currently working with industry to uncover higher-yield ways to mine and extract iron. It’s also looking into new ways to develop iron products that would deliver higher value to the modern industry than current taconite technology provides. Iron isn't the only mineral researchers are exploring. This past summer, for instance, an NRRI study showed that ilmenite, a mineral that’s abundant in northern Minnesota, could yield usable quantities of titanium dioxide. Used in applications including paints, plastics, electronics and energy storage, titanium dioxide has a market value of $3,200 per ton, compared with $70 per ton for taconite pellets.

Energy is another area where NRRI is conducting research. Its goal is to help Minnesota reduce its reliance on imported energy. At the institute’s renewable energy lab in Coleraine, NRRI researchers are working to develop a coal substitute for steel production. They’re working towards a goal of nearly six tons a day of wood-chip waste to create a biofuel product. The institute also is looking at producing syngas (synthesis gas) and other chemicals from treated wood materials that can’t be used for lumber or paper production.

NRRI also assists manufacturers statewide. An example close to home is the paper plant visitors see from I-35 near the ore docks. The plant produces coated papers for magazines and other printed materials. The plant’s owner, Tennessee-based Verso Corp., declared bankruptcy in 2016, but the plant has remained open, updating its processes and exploring new product possibilities. With NRRI’s help, Verso is investigating the use of low-value pulp as a component of higher-value composite products.

What’s more, NRRI recently spun off a new business called Carponentry, which plans to produce affordable, two-bedroom modular housing.

Though NRRI is one of the key innovation engines in Duluth, there are numerous other distinctive niche businesses. Take sister manufacturing companies Loll and Epicurean, which have earned international reputations for their casual furniture and cooking utensils, respectively. Both company’s products are made from recycled or repurposed materials. One of the more unusual, still under-the-radar companies in town is Tryon Media, which buys fashion and entertainment photography worldwide, then sells and packages it to magazines and merchandisers across the globe.

In 2016, the Duluth Seaway Port Authority added some innovative thinking of its own by launching Duluth Cargo Connect, with operating partner Lake Superior Warehousing. Last year, Duluth Cargo Connect partnered with Canadian National Railway to provide intermodal container services between trains and trucks, giving regional shippers access to the global containerized cargo shipping system. The service provides the Duluth-Superior port a source of revenue year-round, and speaks to Duluth’s importance as a freight rail center. Though tracks no longer dominate the city’s landscape as they did 40 years ago, four Class I lines still operate in the Duluth region.

Another example of entrepreneurial thinking is Bent Paddle Brewing Co., founded in 2012 by two young couples who emigrated from the Twin Cities. Bent Paddle has built a following in the Twin Cities and has beer fans eager to sample offerings of other Duluth-area craft brewers, including 1990s pioneers Fitger’s and Lake Superior.

In 2014, Bent Paddle joined a group of neighborhood business boosters called Advancing Lincoln Park. In creating the organization, the Lincoln Park businesses received technical assistance, funding and other help from several local nonprofits, including the Entrepreneur Fund and the Duluth office of the Local Initiatives Support Corp. (LISC), a housing and economic development nonprofit.

One of the newer businesses in Lincoln Park’s Craft Business District is Hemlocks Leatherworks, which makes totes and produces its own line of shoes. Also in the neighborhood is the Duluth Folk School, which offers classes on a variety of old-school crafts and skills, including snowshoe making, cider brewing and knife sharpening. Lincoln Park also is home to Aerostich, which sells its Duluth-made motorcyclist clothing worldwide.

Many locals say that people in Duluth take up artisanal hobbies to keep busy during the long, dark winters. Whether or not that’s true, it’s undeniable that there are many makers creating their own craftwork. Some even make a living that way. A little west of Lincoln Park is a new shop called Makers Mercantile, which features regionally made bags, prints, soaps, knives, pillows and other goods from nearly 30 artists and makers.

The “Made in Duluth” label is a point of pride with the city’s artisans and manufacturers. And it’s a key reason for the city’s healthy climate of innovation and creativity.

Fat-tire biking is a growing winter activity in Duluth.Photo by Hansi Johnson

Arts and the outdoors

Duluth has lovely summers and autumns, but locals also enjoy the city’s long winters. Whatever the season, there's plenty to do.

“We are certainly a national leader in connecting people to the outdoors,” Larson says. “Rather than seeing our 42 creeks and all of our parks and open space as a challenge because they aren’t taxable, we look at it as an opportunity.” In recent years, numerous partners inside and outside City Hall have been working to build on this extensive trail and park system to provide visitors with new recreational attractions and to connect the city’s neighborhoods.

One of those partners is Hansi Johnson, director of recreational lands for the St. Paul-based Minnesota Land Trust. The Land Trust’s primary work is to help landowners statewide protect and conserve properties that have ecological significance, such as wildlife habitat. In Duluth, Johnson is focused on “the engagement side of things—making sure people value restored and protected places ongoing.” He partners with various “user groups”—people who mountain bike, ski, climb and paddle, for example—to create what he calls destination-quality recreational amenities.

Johnson is focused particularly on a “national water trail” designation for the St. Louis River estuary, a scenic realm of water and green islands that visitors first see when they begin their descent into the city. Despite its beauty—and because it has suffered from decades of industrial pollution—the estuary has long been ignored as a recreational amenity.

The base idea behind the national water trail, Johnson says, “is that it’s almost like a hiking trail on water.” The trail’s signage will be primarily digital, accessed mostly through apps. “It tends to be more focused on canoeing, kayaking and stand-up paddleboarding, but it also includes powerboating and fishing.” The water trail has been “a great way to pull together all the different stakeholders,” says Johnson. “In the past, there really was no way to help people navigate or to determine who has the right of way on the river.” Stakeholders are now awaiting the signature of the U.S. interior secretary to make the water trail designation official.

Johnson also has been involved in the creation of the Duluth Traverse, a mountain bike system that runs about 50 miles from northeast to southwest. The International Mountain Bicycling Association has awarded Duluth a “gold-level ride center” designation—one of only six trail systems in the world to earn this recognition. The city, Cyclists of Gitchee Gumee Shores (COGGS) and the Minnesota Land Trust now are helping to build a series of loops connecting to the Duluth Traverse. When completed, those loops will bring the total system to about 100 miles. Reaching that goal is perhaps a couple of years away, but, Johnson says, “it’s amazing how many folks have already come to town to ride that system.”

He also worked with the Duluth Climbers Coalition and the city to purchase the former Casket Quarry in West Duluth. The central feature of Quarry Park, which opened in 2016, is an ice climbing wall. Johnson also is helping with the Grand Avenue Nordic Center, a cutting-edge cross-county ski center at the Spirit Mountain winter recreation area.

To Johnson, working with the local recreational clubs has been crucial to the development of these new recreational destinations. “If we are going to protect these spaces, whether for habitat or quality-of-life amenities, we need to have that open space and make sure there are constituents in the future that are willing to steward it,” Johnson says.

“We have discovered that we have a tremendous opportunity to lead the state and the nation in what is called ‘bridging the adventure gap,’ ” adds Mayor Larson, which means “making sure that every resident is about 1,000 feet from a trail or park. We want to make sure that it’s not a high-end, high-income luxury.” The city is investing in strategies to expose kids to the joys and benefits of outdoor activities. One example is a traveling “bike suite” that takes bicycles to community centers.

Besides her enthusiasm for Duluth’s great outdoors, Larson also is a passionate advocate for the arts. “We have a creative economy that generates $40 million worth of economic activity in Duluth,” she says. “We have professional-level offerings in a market where you wouldn’t necessarily think they’d be.”

Those offerings include a symphony orchestra, opera company, ballet and, soon, a long-anticipated new venue. With a $30.5 million renovation scheduled to be completed this spring, the landmark NorShor Theatre will be reborn as the crown jewel of East Superior Street’s HART (Historic Arts & Theatre) District. It will also become the permanent home of the Duluth Playhouse, a community theater company that’s more than a century old.

Duluth also is becoming an important center for Native American art. The Dr. Robert Powless Cultural Center showcases artwork by regional Native artists. It’s located downtown next to the Giimaaji Urban Indian Center, which is the headquarters of the American Indian Community Housing Organization (AICHO). The center is creating a combined gallery and coffeehouse in the Lincoln Park neighborhood.

The strength of Duluth’s arts and outdoors activities reflects the local consensus that what makes Duluth a viable community are amenities that appeal not only to tourists but to active residents. “We’re working in a city that is reinventing itself,” Johnson says.

Workforce development

Duluth, like most cities, faces two major challenges when it comes to its labor force: a significant increase in retirements as the baby boomer generation exits the workplace, and a shrinking supply of available talent. While the city has seen an influx of people in their 20s and 30s, the long-term trend points to an aging population. As a result, Duluth needs to tackle knowledge-transfer issues while improving how it trains local talent.

Before she was elected mayor, Larson worked in workforce development, so she is well aware of the challenges facing Duluth. “[We have] significant opportunities for growth, but we don’t have the existing skilled workforce to meet that need.” As Larson sees it, the challenge is twofold:

  • How do we scale up training programs for the existing workforce? “In some cases, we have the people. But we need to ensure that we have skills,” Larson says.
  • “How do we ensure as a community that we are welcoming new residents who want to be a part of our prosperity?” The mayor expects Duluth will see more change in the city’s demographic diversity that is more reflective of new immigrants in the state. “That will be an interesting time of growth and challenge for us,” says Larson, who believes that local employers are ready to take on this challenge.

Like most Minnesota State schools, Lake Superior College is developing programs to meet employer needs. The college’s Center for Advanced Aviation offers students several certification programs in aviation maintenance. Those include the school’s A&P (airframe and powerplant mechanic) program, graduates of which are in particular demand in the city’s aviation sector.

A transformational $320 million investment in schools over the past six years has provided all 13 of the district’s schools with best-in-class tools and facilities. And while schools are working to educate 21st-century employees, many local companies also have been getting involved. Allete, for instance, has several initiatives to address the need to not only transfer knowledge to the next generation, but also attract new talent. In addition to mentoring programs, it has developed “Allete University” for new hires and is helping area community colleges develop relevant coursework. In some instances, Allete employees are helping teach classes.

Essentia Health, which has more than 7,000 employees in the Duluth-Superior area, “is continuously attracting and retaining millennials to the region,” says Maureen Talarico, Essentia’s media relations specialist. Essentia has brought in numerous physicians and nurses from outside the region, but knows it needs to tap local sources for new employees as it continues to grow.

One innovative workforce program Essentia Health has been involved in is Connect Forward, which helps people advance their career and finances. Connect Forward is run by Community Action Duluth, which provides financial services, employment, transportation and lifestyle coaching to about 3,000 area residents. Essentia is also supporting local initiatives to help children from diverse backgrounds gain exposure to health care education, including sponsoring and providing staff volunteers for Native Americans in Scrubs Camp.

The workforce challenge is ongoing and requires many approaches. Internships, job shadowing and direct workforce connections are all growing, but more is needed. Something that will help, Larson says, is “making sure we continue to be a city that recognizes and sees our student population as being really valuable.” That includes “making sure our college population has professional opportunities here and can stay here, because we often hear how much people want to stay, but it can be hard to find a job here.”

Energizing the Future

The American Lung Association’s State of the Air 2016 report ranked Duluth “among the cleanest cities for both year-round and short-term levels of particle pollution.” Not surprisingly, Duluth has been aggressive in pursuing cleaner energy to help keep its air fresh.

“We believe that energy efficiency is great for us financially and it’s also really good for our community,” Mayor Emily Larson says. Her goal is to reduce the city’s carbon emissions by 80 percent by 2050, in alignment with the 2016 Paris climate agreement.

Duluth is redesigning its downtown steam plant, which provides energy to more than 200 customers downtown, to shift from coal to natural gas. The first phase of the project has received $15 million in state funding.

“We’ve already decreased our greenhouse gases this year by close to 15 percent,” Larson says.

Minnesota Power, a unit of Duluth-based energy company Allete, is the city’s long-time electrical utility. Its Energy Forward strategy, which seeks to strengthen its electrical grid, reduce carbon emissions and shift more energy generation to renewables, “very much aligns with how the city of Duluth thinks about its energy future,” says Brad Oachs, president of regulated operations. Minnesota Power assists the city with its energy conservation programs by offering renewable options. As Oachs notes, Minnesota Power began in 1906 as “all renewables”—namely, hydroelectric power; it remains the largest hydro operator in the state. Its Thomson Dam, southwest of Duluth near Jay Cooke State Park, is Minnesota’s largest hydroelectric dam.

With the city’s support, Minnesota Power recently installed an electric vehicle charging station in Canal Park and operates a biomass energy-generating station that serves one of the city’s paper mills. Duluth also is an anchor tenant of the company's first community solar garden.

Minnesota Power sister company Allete Clean Energy (ACE) develops, acquires and operates wind farms and other “clean-energy assets” across the country. It has seven projects in four states, with about 535 megawatts worth of wind energy capacity. Two more projects are in development in North Dakota, which will sell its energy to other utilities. Founded six years ago, ACE “is now the second-largest company in Allete,” ACE president Al Rudeck says.

 

Talent attraction and retention

The “first, obvious step” to attracting college graduates and young professionals “is to provide more jobs,” says David Ross, president and CEO of the Duluth Area Chamber of Commerce. But Ross and other Duluth leaders know that a city needs to offer even more to appeal to a new generation of employees.

In 2005, the chamber helped launch Fuse Duluth, a networking group that connects young professionals and employers. Ross believes it has contributed to the fact that the fastest-growing age group in Duluth, according to the most recent U.S. census data, is the 25-to-35 cohort. “That’s a wonderful contrast to what Duluth was prior [to 2005],” says Ross.

The arts, dining and craft beer scenes and the city’s numerous all-season outdoor activities are crucial to getting young people to consider Duluth as a place to work and live. The city’s 2014 recognition by Outside magazine as “the Best Town Ever” for the abundance of its outdoor activities has helped younger people “consider the merits of moving to and working in Duluth,” says Ross, who believes that “people are tiring of the congestion you see in larger cities and the lack of options for outdoor recreation.” The numerous initiatives by the city, nonprofits and businesses to create an abundance of recreational and cultural activities “give Duluth a national profile as a very hip, very exciting place for a young family to live,” he adds.

One younger, professional couple who found their way to Duluth is Kate and Scott Van Daele. She’s a Minneapolis native; he grew up in Colorado. Both had good jobs in Denver’s nonprofit sector, yet both felt as though something was missing. Though Denver is an exciting city, it is also very big, making it hard to professionally “make a big impact,” Kate says. Regular vacations to Duluth made them realize that the Minnesota city had a lot of what they were looking for—a slower pace, numerous outdoor activities, a strong sense of community and opportunities to grow and contribute professionally.

In April 2016, the couple made the move. Kate is a now a city planner; her work focuses on the city’s Imagine Duluth 2035 plan. Scott is director of distributive services for Churches United in Ministry (CHUM), a nonprofit that provides safety-net services for low-income residents. In March, the couple bought a house and is now planning to start a family.

“It’s been a natural fit for us,” says Kate, who often walks to work. For one thing, “I’ve never had the work experience that I do here. Working with the people I do is kind of a family atmosphere.” For younger professionals generally, she believes the city’s amenities and opportunities are particularly appealing. She also touts the city’s entrepreneurial mindset. “Duluth is open to people that are creative,” and to younger people who are interested in “making a difference creatively and professionally.”

To help those who are interested in moving to Duluth connect with local employers, a group of local partners, including city government, colleges, Allete and regional economic development agency Apex, launched Northforce.org in 2014. The portal connects residents with career, mentorship and internship opportunities. It also includes information on specific jobs and uses social media to interact with people. As of October, 3,000 people are registered on Northforce, including 700 from outside the region.

“Northforce started as a tool to connect businesses in the Apex region with the right talent—both folks living here already and those interested in relocating here,” Apex president and CEO Brian Hanson says. “It has grown to include mentoring, establishing partnerships between business and education, and so much more. It has even become a vital business recruitment tool, since we have accurate data on active job seekers. It’s a key competitive advantage for Duluth and this region.”

Duluth also is looking to weave its newer, younger residents into the local community. For instance, grants provided by the Duluth Superior Area Community Foundation’s Young Leaders Fund support leadership opportunities for young adults in the region.

“We’re seeing a transition in leadership in various layers—business, government, nonprofits,” Larson says. It’s a generational shift many cities are seeing. The challenge for Duluth, she says, is “ensuring that pipeline of ready leaders is supported, mentored and challenged to be successful in new roles.”

Challenges and opportunities

In addition to workforce development and talent attraction and retention, one of Duluth’s biggest challenges is that it’s both a tourist and commuter destination. On Larson’s mind: “How do we serve the 86,000 residents, 40,000 daily commuters and 6.7 million annual visitors on the city of Duluth’s limited operating budget?” What’s more, the city’s population hasn’t grown much since 1990. To build its tax base, Duluth will need to attract more residents.

The city also needs to make additional investments in its steam-based energy facility, fix its aging sewer and water infrastructure, and add public parking in high-demand destinations. In November, 77 percent of voters approved a half-cent sales tax increase, which Larson proposed to repair some of Duluth’s most roughed-up streets.

Next year, Superior Street, the city’s main artery, will begin to undergo a $50 million-plus renovation. The work will not only repair the street itself, but also put in place a closed-loop hot-water system that will help make the city less reliant on coal-based energy. “That’s a trifecta—streets, infrastructure and green energy,” Larson says.

The city also is updating its comprehensive plan, which it calls Imagine Duluth 2035. The plan will guide “how we make decisions about every element of the city,” Larson says. “We have had such tremendous growth in the past 10 years that we decided we needed to dust off our previous plan in five critical areas”—economic development, housing, transportation, open space and energy. In developing Imagine Duluth 2035, the city has taken what Larson says is an innovative approach. Rather than contracting with an outside planner, Larson and her City Hall colleagues have invested in hundreds of hours’ worth of public listening sessions. This gives the community the opportunity to be partners in the plan, and lets City Hall “hear all of the voices, conventional and unconventional,” Larson says.

The plan should help the city face another of its major challenges. As the mayor notes, with so much change and unpredictability on both the federal and state levels, “cities aren’t getting as much support.” At the state level, she says, “we actually have great relationships with people in both parties and across leadership levels.” But the policy differences between the two parties “can make it hard for cities to get the resources and the reliability they need.” Duluth’s budget has long relied on the state’s Local Government Aid funding, for instance, and that aid has not kept pace with inflation.

“So it comes down to local government to provide the steady solutions that a community needs,” Larson says. What’s more, “there is additional pressure on mayors and local governments to deliver services and innovation that we typically have sought in partnership with state and federal government. And now we really have to do it more alone.”

But in Duluth, there is no such thing as alone. It’s truly a large group effort.

“Every third person you run into from Allete is on a board, a member of COGGS or volunteering somewhere. Our people are plugged in everywhere,” says Amy Rutledge, manager of corporate communications at Allete.

Most organizations can easily point to a high percentage of their employees participating in efforts to improve Duluth.

“It’s a small community and an open community," says Fernando Delgado, UMD's executive vice chancellor for academic affairs. "One can get lost in the crowds in the Twin Cities, but not up here.” 

Big Development

Perhaps the highest-profile local developer is Duluth native Alex Giuliani. His development group won local renown several years ago for turning the former Clyde Iron factory in West Duluth into a stylish event center and restaurant. In mid-2016, Giuliani and his partners completed Pier B Resort Hotel, a $30 million hotel and restaurant complex near Canal Park, reclaiming brownfield property on the waterfront. Giuliani and his partners are now looking at a nearby site for a new multi-million-dollar mixed-use project.

Minneapolis developer George Sherman, CEO and owner of Sherman Associates, has been so involved in the city that he’s almost considered a Duluthian. Sherman’s work in Duluth includes Greysolon Plaza on Superior Street, which was home to the former Hotel Duluth that opened in 1924. The space was repurposed for events and affordable housing. The focus of his recent work is the renovation of the NorShor Theatre.

“Duluth boasts many unique qualities that developers find appealing, including its strong economic and employment base, several new corporate headquarters, the universities, a vibrant arts community and, of course, the tourism industry,” says Sherman, who also owns the Sheraton Hotel in downtown Duluth. He adds that the city has been a great partner.

Another Twin Cities-area developer that has seen opportunity in Duluth is Minneapolis-based United Properties. In early 2017, it completed Kenwood Village, a $20 million mixed-use development with 83 market-rate apartments and 14,500 square feet of leased retail space.

Gene Rebeck is TCB’s northern Minnesota correspondent.

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