Interview with Don Ness, Mayor of Duluth

Don Ness was elected Mayor of Duluth in 2008, just as the American economy was imploding. The city had a debt of $1.35 million, was being sued by the federal government, had massive sanitary sewer overflows into Lake Superior, and lacked a strong plan for building the infrastructure and retaining young professionals. Ness took a no-nonsense approach to solving these issues, and in 2011, due largely to his strong-willed methodologies, he was the first mayor to run unopposed since Duluth was incorporated in 1887. He has also earned a 90% approval rating and has increased the General Fund Reserve by over $8 million.

In an interview that seems to serve, at times, as a how-to guide on successful economic and infrastructural development, Mayor Ness spells out several strategies that have benefitted his city. Still, he points out that certain problems, such as expanding housing in the downtown area, continue to prove highly problematic no matter what policies community leaders and businesses attempt to broker. We also discussed how some of Mayor Ness’s plans could be adapted to fit Colorado Springs’ needs.

————————-

Yordy: You mentioned the Duluth Economic Development Authority [DEDA]. I’ve read that it plays a vastly important role in fostering the growth of many businesses. Why did you choose to restructure these agencies, and what were some of the difficulties in attaining that goal?

Ness: Our DEDA, the economic development authority, is an independent group. It’s not necessarily the umbrella group. We have different economic development agencies that all play a particular role. Prior to my becoming mayor, they were all operating independently. So what we did was bring together an economic development coalition, called the “Mayor’s Economic Development Coalition,” and we meet at least once a month, and everybody kind of brings their projects to the table.

The expectation is that there’s an open dialogue and everyone shares information freely. We’re going to respect the confidentially of the agreement, or of the news that’s shared there, but it gives us an opportunity to pitch in and to contribute our resources to help another agency move a project forward, instead of what would happen in the past when people would hold projects really close and say, “Well this is my project, and I don’t want anybody else taking credit if this turns out well.” But really, leaving a lot of tools and a lot of resources on the table, projects weren’t as successful as they could have been.

Yordy: Right. And that makes sense, when everybody works together as opposed to fighting against each other.

Ness: Yep.

Yordy: Mayor Bach [of Colorado Springs] proposed moving our local baseball stadium from the east end of town to the more centrally located downtown area to try to generate more business [Since this interview, the proposal to move the Colorado Springs Sky Sox’s stadium to downtown Colorado Springs has been altered to a plan that would “accommodate more Olympic sports and not be as focused on baseball”]. Have you had any big ventures that your organization has benefited from, such as something almost as big as moving a baseball stadium?

Ness: Well, yeah. I guess it’s probably now about six years ago. There was a debate on where the new hockey arena would be built, and the chancellor of the university wanted it to be an on-campus facility. The old arena was in the downtown area and on our waterfront, and people wanted that to remain, so that was an interesting debate. In the end, the community rallied around keeping the stadium in the core city and passed a referendum to build the arena that got big support.

We’ve always felt like strengthening the core city is really important to support those local businesses rather than spreading those amenities further out to the edges of the community, where you’re picking winners and losers a little bit more at that point because whatever neighborhood you’re going into, they’re going to have that benefit as well as greater logistical problems in terms of handling traffic and creating parking for events that may happen 20-30 times a year. Whereas in a core city, because you have the parking lots, the roads are built to accommodate larger numbers of cars, you put those amenities where the infrastructure can handle that volume.

Yordy: Right. Denver is very well organized, but the way Colorado Springs grew with the military bases being put on the outskirts of the city, we would get these massive growths from those sections of the military base, and the urban planning wasn’t very efficient. So of course you get these huge pockets of restaurants and entertainment venues in random parts of the city that aren’t centrally located in the downtown area.

Ness: The bases, are they about 15 minutes outside of the core city?

Yordy: It depends. We have Fort Carson on the south end, which is a large army base, and all the way on the north end you have the Air Force Academy, and then a few air bases out east, so the east side has grown, but that’s all it really is. It’s all expanding away from the central downtown area of Colorado Springs. It creates complications with businesses trying to expand in that central area because you only attract a certain amount of people. Not many people would come into the city from the east side when they have a stadium and all these other new amenities.

In reference to urban projects, I watched a hearing on one of our organizations, the Urban Renewal Project. They were attempting to assess a fee of $1.25 million from a $3.2 million project, and Mayor Bach had to go in, re-assess their fee, reduce it to $250,000, so I was curious if you’ve had examples of similar issues as Mayor of Duluth. Also, how do you deal with an organization’s possible self-serving motives or their inefficient allocation of funds?

Ness: So, this was some type of non-profit or development agency that had the ability to raise funds through assessment?

Yordy: It’s a development agency, and this was their fee for redesigning an older part of town, and this was what they assessed their fee to be over a span of 25 years.

Don Ness 1Ness: Got it. Well, there’s no question that governments in particular have to be very vigilant in understanding what those fee structures are, and you get these private companies who will come in and promise the world, and they will tap into these resources and say, “Here’s the big vision,” but in the meantime, they’re padding their pockets or hoping that there isn’t scrutiny by government officials who will just kind of go along with whatever the fee structure is.

We did have something similar, not on the city side, but with the school district. They brought in Johnson Controls, which is based out of Milwaukee. They’re an international organization, and they did a facilities assessment of the school district and essentially came up with this massive plan to invest in the school facilities and did so without going to the voters on referendum.

They were successful with pushing this through, but the damage to the school district’s reputation and how voters feel about the school was very difficult to overcome. In fact, just last Tuesday, we passed the first operating referendum for the schools in the past 5-7 years, and it passed with a 51% vote. So, there’s still a lot of hard feelings about the school district, in large part because this private consultant came in, sold this plan, pushed it through, very expensive, top of the line, and meanwhile they’re getting a percentage of everything that’s brought up, so I think that’s the real key.

It sounds like your mayor did a good job of saying, “Hey, wait a minute. You guys shouldn’t be going with this.” And you know, any developer is going to come in, pad the numbers, put in the development fee, and try to get that top cost number as high as they can, and unless you’re providing resistance, unless you’re questioning why they’re getting that much, they will continue to push that, and sometimes communities can even get a reputation. Say, well, you know, here’s a city that doesn’t push back. They just accept these higher fees, especially from national organizations that provide expertise, and then you can develop a reputation as an easy market.

Yordy: It seems like in the long run, this would raise costs overall for the consumer.

Ness: Yep. And there are good projects, and sometimes it is important to get the national organizations or that outside expertise. But you have to know what that market is and be willing to bring it to a head on how much these folks are going to get because there will still be a point where you can push back and reduce their top costs and the money that they’re going to get and yet they’ll still do the project. Creating that healthy tension as a government looking to contract for services, government has to be willing and able to step up and advocate for the taxpayers and negotiate to get the best deal possible.

Yordy: Right. So, moving to the issue of keeping college graduates in town, in Colorado Springs, our campuses churn out a lot of graduates that don’t necessarily stay in the city. I noticed that the FuseDuluth program seemed like a very efficient tool for networking upcoming professionals. I noted that it was organized through the Chamber of Commerce. How difficult was it to organize this, and was it a joint venture between multiple groups?

Ness: Fuse came out of an initiative that I started back in 2000. It was more of a grassroots, non-profit organization all run by young people in their 20s and 30s. We got together and worked on projects and had social events. Within a year, Fuse went from a membership of ten to a membership of over 500. This really tapped into a sense that young professionals in Duluth have a role to play and that we could help shape the future of Duluth.

ness walking

About five years in, we were an entirely volunteer-run organization, as happens when you’re dealing with folks in their 20s and early 30s. Then, folks were getting married, having kids, their job responsibilities became greater. It became difficult to sustain that going forward. The Chamber stepped in and said, “We’ll take this on. We’ll bring this into our organization.” It became more of a plug and play for young professionals who wanted to be involved.

We spent a tremendous amount of energy trying to sustain the organization, and the Chamber did a nice job with it. It’s not as vibrant and vital of an organization as it was at first, but its difficult to sustain that sort of energy in the long term as well. There are some challenges because the Chamber is representing business interests, and before with the non-profit approach, we were able to bring in young people that may not have been comfortable going to a Chamber event but who wanted to be involved in an organization like this. But, it is a good group and it’s a good way for young people who are entering the work force to gain a sense of building connections. They can go to Fuse events and learn about the community and do some networking at a level that’s comfortable.

Yordy: Right. Now, does your TwinPortsConnex program supplement that as far as providing mentoring and career sites for young people?

Ness: Yeah, it’s different from FuseDuluth, but there are always connections between all these different organizations, and that’s the real key. We have many agencies doing similar things, and the key is to make sure nobody gets to the point where they feel that they have the corner on that particular market or start getting their elbows up and start bad mouthing another initiative because it may be coming close to what they’re doing.

So, TwinPortsConnex is an initiative that’s supported by our community foundation. The idea there is to really focus in on folks when they’re juniors and seniors in college through that transition to getting that first professional job, so 22-26 or sometimes further on, depending on how long it takes to get that first professional job. And they’re really about connecting those dots. You know, finding the employers who are willing to take on interns or finding employers who know that they’re going to have skill gaps in the future because of retirements or because of growth, and then to develop this network of young people who are interested in those fields and just making those connections.

And, as you sometimes see in Colorado Springs, campus can be its own little island. And students who go there, most of their activities are on campus. They might leave occasionally to go to a bar or whatever, but there’s no real connection with the community. And so TwinPortsConnex is trying to say, “Hey, you have an opportunity as a junior or senior in college. We have this great community, we have this great economy. You need to experience it, and we want to open your eyes to what the city of Duluth can offer in terms of a long-term career here, and getting an internship or encouraging these young people to volunteer or getting a mentor is a great way to ground them in this community.

Yordy: Right, and as I’ve seen here, our career fairs and career sites seem relatively dry and sometimes intimidating, and also, some of these career fairs could be for major organizations that could take you out of the city. So we don’t have anything like TwinPortsConnex that actually fosters retention in the city and is definitely something that’s advertised around campus very often. And that contributes to retention problems.

One of the issues with expanding Downtown Colorado Springs is that not only do we have a large number of major organizations and chain restaurants, Downtown housing is sparse and oftentimes unaffordable to many. So, I was curious about what some of your methods are for expanding Downtown Duluth as your housing grows and how you keep the costs at a reasonable rate.

Ness: Well, this is our biggest challenge as well, and I’m not sure that we have the right solution. As our economy is growing and we’re creating more professional jobs, our housing market hasn’t kept up. And we’re getting down to a very unhealthy vacancy rate. Owners of lesser or substandard housing [are] able to charge really high rent or charge too much for these homes, and it’s a bit of sticker shock when folks are coming from urban communities that have seen a lot of new housing growth and maybe overbuilt in their housing market, and they come up to Duluth, and they’re not finding much vacancy. The economics are making sub-standard housing too expensive.

So we’re trying to figure out what the public sector can do to bring new tools to the table to encourage private sector development, especially the multi-family housing, especially in our downtown. We need to get the private sector, the financing sector, to step up and say, if you guys are confident in Duluth, and if you want to see our community grow and be healthy, we have to meet this housing demand. Otherwise, in very short order, it’s going to discourage our efforts to bring in new jobs because those companies will say, “I can’t find a place for my employees to live, so I can’t afford to do business here.”

Yordy: Along with the housing issue, due to the massive military population in Colorado Springs, we have many chain restaurants located everywhere in the city. These large corporations make it more difficult for small businesses or restaurants to flourish, so how is the city of Duluth helping to foster the growth and sustainability of locally owned businesses and restaurants?

Ness: I do think that this is something that we’ve done very well. I think that there are two primary factors, and I’m not sure if you can replicate these or not. One is that we have done a good job of having a strong concentration in our Downtown and in our Waterfront. We have a business district called “Canal Park,” which is a major tourist destination adjacent to our convention center. Lots of hotels, and fortunately for us, a very high percentage of restaurants in the Downtown Waterfront are locally owned and have been established for a long time. While we do have some of the chains like Green Mill or Old Chicago in this area, those are almost secondary choices to the more well-established, local restaurants.

I think part of the other benefit is that our Downtown doesn’t have a lot of sprawl-type development. Once you get into the sprawl type development, that’s where the national chains are going to thrive. That’s when you get the folks driving by on the freeway that see the familiar Applebee’s, so they’re going to make that turnoff. We’ve resisted the sprawl type development on the freeway coming into town. We get 3.5 million visitors coming to Duluth, mainly from the Twin Cities, and there aren’t those easy turnoffs to Applebee’s on the way into town. They get into our Downtown, they park their car at their hotel or wherever they’re staying, and they walk to their restaurants.

And there are real practical ways that we’ve encouraged the private restaurants. Prior, we had a hard limit on liquor licenses. The value of this government issued liquor license was around $100,000. If you were a mom and pop and wanted to start a restaurant with a liquor license, you had to go and purchase somebody else’s liquor license for $100,000, and you were starting behind the eight ball. So, we eliminated that limit, and in doing so, we opened the door for the small mom and pop business because the only folks who could afford those at the time were the big restaurants like Olive Garden and what not. Of course, people at the time were complaining, “Oh, we’re going to have bars on every corner,” and that just doesn’t happen because the market takes care of that. So, you’re giving a local entrepreneur a fighting chance.

Yordy: Exactly. And it seems to be a fairly common consensus that people who reside in an area for a long period of time prefer the mom and pop businesses over the chains. Many people who live in Colorado Springs will actually drive west, almost into the mountains, into this small town called “Manitou” because they’re very conscious about locally owned businesses and restaurants.

Also, the diversity of entertainment venues is greatly lacking in downtown Colorado Springs. Mayor Bach has proposed ideas to attract entertainment anchors to the city’s core. What have you developed to supplement the growth and attraction of downtown Duluth?

Ness: We’re trying to create an arts and culture hub in our downtown. Probably like you guys with Denver, all the major acts go down to Minneapolis, so we kind of have to create our own thing. We’ve focused on not building a big concert venue that seats 15,000, but let’s encourage the local venues to have a music stage and encourage the local bars to hire local musicians and pay them $100 a night, and that helps facilitate more artists that want to live in Duluth and can at least supplement their income by playing music and encouraging folks to go out and watch a local play or support the local arts organization.

The one thing that the city is doing on a larger scale is taking our last remaining historical theater and doing a major renovation and having that 750-person theater in our core Downtown. It took a lot of criticism [to make this happen], but [people] weren’t trying to create this nitch for the city of Duluth. What are the values that we’re trying to project? Natural beauty, outdoor recreation, a strong arts and culture theme, and supporting the local arts is part of that ethos that we’re trying to create.

And from my understanding, in Colorado Springs, it’s tough because you have a sort of transient community. Folks are coming from all over the country and all over town, and developing an appreciation for local arts and local musicians takes time and commitment from the local businesses to really invest in these experiences. So, when you’re bringing folks from the outside, either students or military, they are going to gravitate to what is comfortable and familiar. They know Applebee’s. They know the major acts that are coming through, and they think, “Oh, I know that,” so that’s what they go with as opposed to “I’m going to take a chance and go to this club to see a local band. Or I’m going to take a chance and go see a local theater performance.”

They may not have the confidence that it’s going to be professional quality, but it’s part of that building community, and I don’t think that there’s a magic formula to say here’s what it takes to build this DIY sort of arts theme other than realizing that you have the local talent and the pieces are there. You just need to foster it slowly and build it up. But the nice thing is, if you throw a few bucks at a grassroots arts theme, it can go a long way. You don’t need to spend a million dollars. $10,000 spread across a number of small arts organizations can create a lot of positive energy.

Yordy: You also mentioned the high popularity of areas that are closest to the seaports. Colorado Springs is planning to build a farmers market in the Downtown area, something which is already popular in this community. Does downtown Duluth have something similar, and if so, how successful is it?

Ness: There are some long standing farmers markets in the neighborhood. The university does one during the summer months that’s very successful. We haven’t figured out a location and approach that has been able to scale it up to a larger event, so there’s a fair number of farmers markets in Duluth. Probably different neighborhoods, probably six or seven during the summer months. A pretty good network of food shares and farm shares in the region, but we don’t have a destination farmers market that a lot of communities have. It’d be nice if we did.

Yordy: Something that I noticed was similarly popular between our two cities is the breweries. It’s a big thing out here, and it’s a great thing to be able to go into a local restaurant and get a local draft from one of the local breweries. As the Craft Beer Capital of Minnesota, Duluth seems to convey a similar passion about local brews. How have you helped to incorporate your breweries into the local culture and infrastructure?

 

Ness: It was actually a couple of young guys that went out to Colorado 15-18 years ago and saw that this brew pub thing was really hitting a chord and was something that people cared about, so they started that in Duluth, and now they’re the largest brew pub in the Upper Midwest. This was a starting point for the craft beer in Duluth, and I’ve gone out of my way to promote craft beer in Duluth as another one of those features of the ethos or values of the type of community that we’re creating.

It also helps promote what Duluth is known for. We’re on the shores of the largest body of fresh water in the world and the cleanest, freshest water, and that makes for great beer. So when we’re promoting our local bottlers or brewhouses, we’re not only promoting those local businesses, we’re also promoting outdoor recreation, arts and culture, and craft beer.

We’re also saying how this reflects on the quality of our water and clean air and our focus on the environment and the appreciation of local people putting their hearts and souls into something. Then, the local consumers go out of their way to support those folks. The local restaurants make sure they have local beer on tap. Instead of picking up the six pack of Bell’s or Sierra Nevada, local consumers go out and pick up Bent Paddle or the Lake Superior Brewing Company because those are creating jobs here, and it creates that stronger connection to the community.

Yordy: And some of these brews can become famous throughout the rest of the country. You mentioned the outdoor scene a little bit. In a more general sense, how is Duluth fostering the growth of that and incorporating it into the urban section of the city?

Ness: Well, we’re a city built on a hill overlooking Lake Superior, and we also have the St. Louis River that kind of flows into the lake, and we have a tremendous amount of green space and kind of a green network throughout our city with spectacular overlooks from the ridge onto the lake and onto the river. So one of the things we’ve seen as an opportunity is to say, well, we have these attributes, and people in Duluth love to get out and appreciate the outdoors, so what’s the investment that we can make to enhance that and it’s our trail system?

So, we built a 40-mile hiking system from east to west in our city. We’re currently building a 100-mile single-track mountain bike system called “The Duluth Traverse” that, when it’s completed, is going to be the largest world-class mountain biking system. And people say, “Well, you know, only a small percentage of the people in Duluth mountain bike,” which is true. It’s not a huge thing, but once that’s complete, we can say with all confidence that this is the premier urban mountain biking system in North America. That becomes a calling card for what Duluth is about.

So, when that idea gets out there and gets into those publications where people are passionate about mountain biking, they’ll start thinking, “Well, maybe that’s a city I want to live in.” Or maybe if a city is investing in mountain biking, it’s probably also a city that’s progressive and supports the arts and natural beauty in this area. We’re seeing that as the difference maker. We compete with Minneapolis and St. Paul for talent, companies, residents, and we want to say the difference maker in Duluth is our natural beauty, our outdoor recreation, and being a sizeable city that you can plug into and make a difference versus being lost in the major metropolitan.

Yordy: The outdoor scene is a similar plus about Colorado in general. It’s a different group of people, but if you can boast that you have the biggest urban mountain biking track, people will come from all over the country to use it. And with supplemental attractions, people will be more prone to stick around as opposed to just visit.

Touching on the academic scene, we have one centrally located college that’s Downtown, but one of our major universities is expanding in a strange direction. It’s up on a hill and isn’t very student friendly. They built a campus village area at the bottom of the hill, but they put in a Costco and a Kohl’s and things that are better suited for different residents, not the students, with it all being fairly expensive. So, how is Duluth fostering the academic scene and the sustainability and attraction of your universities?

Ness: Duluth has three major campuses with about 20,000 students, and our overall population is 86,000. We aren’t a college town, but we have a very strong college and university presence. Now, the unfortunate part for us is that all three of the schools are up on top of the hill, so they’re separated from our Downtown, and it becomes more difficult to get students Downtown to see that local scene. Fortunately, our new leadership at all three schools are getting a little more aggressive at looking for opportunities to have some of their programs in the Downtown area, with better incorporation with local arts groups and things like that. It’s one of my great frustrations that we have 20,000 students, but because of where the campuses are, our Downtown doesn’t benefit from them being here.

Yordy: That’s one of our similar issues. The big campus that’s still expanding is on the north end while our Downtown is further south, and I wouldn’t be surprised if many of our students never ventured down there because it is rather an inconvenience.

So, with all these changes you’ve made over the past few years, I image that you’ve probably aggravated a lot of people because, of course, when you come in strong willed, you might possibly make some enemies in different circles. How do you feel about that?

Ness: Well, I took office in 2008, just as the world was imploding and had massive, massive problems. Financial problems. We were being sued by the federal government, sanitary sewer overflows, our retiree healthcare benefits were threatening to bankrupt the city, and I made a lot of really difficult and politically unpopular decisions. But at the same time, I tried to be honest and straightforward with the voters. Here’s the problem that we have, and it’s not going to solve itself, so we’re going to have to make these tough decisions so that our city can get better while, at the same time, having this vision of wanting to invest in our parks and in our trails and having a new set of values that will attract this next generation of homeowners and talent that our local employers need.

In the end, it’s been a very effective political strategy, and it’s worked for me. My first re-election campaign in 2011 was the first time in the history of our city that the mayor ran unopposed, and the last annual approval rating was 90%. That only happens because people are now seeing the progress, the job creation. People are seeing that the problems that were burdening our city for a long time are now being solved, and we’re not dealing with those same issues over and over again. You know, part of politics is having folks that disagree or have a different opinion, and I always try to be respectful of those opinions and learn from them and listen to what others have to say, but in the end, it’s worked out at least in Duluth.

————————-

Obviously, Don Ness’s strategy is working, and I image it would prove effective in many other cities because when you work more with the citizenry and less with the bureaucracy, good things happen. Ness’s approval rating and the fact that he was the first mayor to run unopposed since 1887 are some of the main reasons why I looked to him for some pointers on how to deal with some of Colorado Springs’ political, economic, and social challenges. Instead of pointing fingers and operating in a state of secrecy, Mayor Ness tends to take responsibility for his actions and fix things in as transparent a manner as possible. He understands what is needed to foster a well-rounded, attractive, successful community. Regardless of his well-deserved reputation as a successful mayor, he’s also a modest resident of Duluth. He’s personable and conveys a great sense of humility. In all, Don Ness is a leader from whom others can and should learn.

Ness 2