Interview with Don Ness, Mayor of Duluth, Page 4

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.