Saving the Seaway: Duluth City Council Notes, 3/10/14

The Duluth City Council had a fairly tame agenda on Monday night, and between hockey-caused exhaustion and a busy workday, I settled for following Monday night’s City Council meeting from home.

The opening comments were straightforward, and brushed on a handful of open Council issues. Councilor Julsrud plugged two upcoming meetings, one at 6:30 on March 20 at Good Shepard Lutheran Church in Lakeside to discuss soil testing and plans for a dog park in the neighborhood, and the other at 6:00 on March 27 at Hartley Nature Center over future plans for trails in Hartley Park. Councilor Gardner also gave a brief update on the move toward a charter amendment to resolve issues with council vacancy appointments, saying the committee charged with drafting the changes had some research to work with and would be meeting soon.

After some procedural wrangling and the pulling of several finance resolutions so as to allow more time for public notification, the Council moved into its only big agenda item of the evening, a $230,000 loan to the Housing Redevelopment Authority (HRA) to rescue the blighted Seaway Hotel in Lincoln Park. The Seaway has been condemned by the city in the past and faces serious structural issues, but continues to operate over 60 low-income housing units, and needs a new owner to realistically continue to operate. Three citizen speakers came forward to support the loan, saying the need was pressing, and that a revitalization could be a catalyst to help improve one of Duluth’s more depressed areas. They also stressed the inclusion of tenants in the meetings to decide the Seaway’s future.

Councilor Larson was the first Councilor to declare her support, noting the efficiency of the investment—about $3,000 per unit—and the potential costs of failure to act. Councilor Russ agreed and noted the diversity of groups involved in the effort, while Councilor Filipovich added an environmental angle to the discussion, saying refurbishment was better than demolition. Councilor Fosle, conceding he was likely the lone ‘no’ vote, expressed his doubts: the HRA has a budget of over $10 million, yet taxpayers are being left with the bill; the loan was “forgivable;” and other businesses in the region might not see any incentive to do anything, leaving then neighborhood unchanged. He was especially concerned about projections that had the project in the red for at least three years, perhaps forever, and insisted that it is “not the government’s job to buy dilapidated buildings. This is why people get mad at government.”

Councilor Hanson followed up on Councilor Fosle’s words, and asked CAO Montgomery if the loan really was “forgivable.” Montgomery did not quite answer the question, though he did point out that there was revenue to be made both from the building’s operations and in its eventual sale. He also conceded that there was a real chance the Seaway would operate in the red, but both he and Councilor Sipress insisted that the benefits of an improved Seaway would outweigh the costs. The whole plan was contingent on state grants, they explained, and the HRA is a catalyst for the process that makes an eventual payoff “more probable.”

Councilor Larson offered to talk to Councilor Hanson about the details later, but this didn’t quite quell his concerns, and he proposed an amendment to the resolution that would insist that the eventual liquidation of the building be done at a “fair market rate.” President Krug (via Atty. Johnson) and CAO Montgomery were quick to shoot this idea down, explaining that an amendment would force the plan back to the Development Authority. The Seaway “would have been sold long ago” if it were an “easy deal,” Montgomery explained, and the building would forever be problematic unless it got a “government kickstart.” He also wondered how they would define a “fair market rate,” and President Krug closed the comments by saying that the Seaway was a problem that needed a solution before anything else could be done to rehabilitate Lincoln Park.

Councilor Hanson voted for the resolution, and it passed 8-1, with Councilor Fosle as the lone dissenter. During the closing comments he explained himself further, and appeared to disagree with the narrative presented by some Councilors in which a refurbished Seaway would lift up the entire neighborhood. The “deep cancer” at play here, he said while citing his experience as a resident of and worker in Lincoln Park, is the presence of many “liquor establishments” along the block that blight the entire area. He demanded better management and responsiveness to crime in the neighborhood, and said it “will take more public investment” to turn things around; hence his frustration that the HRA was not picking up more of the tab, though this was a good “first surgical step.”

The only other discussion involved three ordinances amending the city code. Councilor Fosle made some cryptic comments at the start, saying someone had been “pushing an agenda” to make all of these changes, making a 1.5 inch-thick book’s worth of changes before abruptly leaving. He said one of the changes was not merely the “housekeeping” change it had been made out to be, and worried about unintended consequences. Agreeing that there was a lot of information to absorb in a short time, Councilors Gardner and Julsrud sought to explain the changes found in the most complex of the ordinances. The new language created more public meetings, and insisted that developers hold one for all residents within 350 feet, note the number of attendees, and respond to any concerns they might raise. It also allowed for more flexibility and freedom to issue special and interim use permits. This particular ordinance drew a ‘no’ vote from Councilor Fosle and passed 8-1; the other two passed unanimously. Its work complete, the Council wrapped up a relatively short meeting.


The most interesting theme to emerge in this meeting was the chicken-or-egg question relating to the Seaway and its place in Lincoln Park. Is the area around the Seaway in need of a facelift because of the effects of the Seaway, or is the Seaway an issue because its environs are the issue? Presumably the two are interrelated to some degree, but where is the best starting point for people trying to attack the problem? With the caveat that I don’t spend much time in Lincoln Park, I’ll say this: going after the blighted building at the heart of the neighborhood is probably more cost-effective than trying to make everything look pretty or cracking down on crime or shutting down bars. (Where there’s a demand, the supply will follow, in one way or another, and some of those other solutions can seem paternalistic, depending on how they’re implemented.) For the same reasons, though, it’s hard to see the changes to one building turning around an entire neighborhood.  This is, of course, why poverty is so entrenched; there are no simple causal arrows, and things cycle into one another through culture and politics and economics and the agency of individuals. The Seaway rescue is an attempt to throw a wrench in some of those cycles. We’ll soon learn if it is enough of one to create newer, healthier cycles for a neighborhood that could use some help.


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