September 29, 2020

Duluth bails out Spirit Mountain — again — allowing ski hill to open for winter

Duluth bails out Spirit Mountain — again — allowing ski hill to open for winter


DULUTH – Spirit Mountain will open as normal this winter after the city once again bailed out the publicly owned ski hill with a $300,000 cash infusion on Monday night.

“Sometimes you have to spend a little money to make a little money,” Duluth City Council member Janet Kennedy said.

Not that council members had much of a choice.

“If the council chooses to not approve this item, the alternative would be to close down Spirit Mountain,” the city’s Chief Administrative Officer, Noah Schuchman, told the council last week. “And the unfunded obligations there are well past this cost.”

Were the mountain to close, the city would be on the hook for $2.6 million in payments like season pass refunds and outstanding debt.

The $300,000 will come from tourism taxes specifically meant to benefit western Duluth attractions. It was needed after the pandemic forced Spirit Mountain to end its season early and close for the summer, costing an anticipated $1.4 million in revenue.

“(It’s) not because we always say yes to the hill; doing anything but that would do more damage to Duluth,” council member Roz Randorf said.

The decision shifts money from the Spirit Landing project that would provide new river access just across the road from Spirit Mountain’s Grand Avenue chalet. It also comes as other tourism tax-funded attractions — like the Lake Superior Zoo — did not receive their full allotment from the city this year.

The zoo, not far from Spirit Mountain on the west side of town, was facing a potential $180,000 loss this year and stepped up fundraising efforts to stay out of the red.

Last winter the mountain received $235,000 in emergency funding after a major snowstorm caused the cancellation of a Snocross event. The request revealed the cash-flow cliff the ski hill has been operating on for several years.

Spirit Mountain is able to pay its bills through operations and the existing $1.1 million annual city subsidy, but it has not been able to keep up with deferred maintenance and capital projects.

The mountain’s financial future is getting a closer look after the city formed a task force this summer. That group is expected to deliver a recommendation this winter on how to get the mountain on a sustainable financial path.

All options are on the table, including selling or leasing the ski hill that was created as a public entity by the state Legislature in 1974. Selling would be difficult due to laws governing the transfer of public lands.

 

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