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How Duluth bounced back from economic oblivion

Former Duluth Mayor Don Ness: “Duluth is 26 miles long, built on a hillside. On that hill are 40 streams. What we tell folks is that you can live in this city, and have world-class mountain biking, skiing, kayaking, and sailing right out your back door, right in the city.”

Second of three articles

The McKnight Foundation commissioned writer Jay Walljasper to do a series of reports looking at the prospects and challenges in Minnesota’s 80 counties outside the metro area. This is the second of three MinnPost articles drawn from his latest report, "Northeast Minnesota: New Possibilities in the North Country."  The first, on the Iron Range, can be read here

Things looked so bleak for Duluth during the 1980s that some wag put up a billboard along the southbound lane of I-35 asking, “Will the last one leaving Duluth please turn out the light?”

Who could have imagined that 30 years later the city would be reaping laurels like Outside magazine’s influential Best Town honor (beating out usual suspects Boulder, Colorado; Asheville, North Carolina; and Burlington, Vermont), and earning credit for nationally renowned bands like Low and Trampled by Turtles?

Duluth, whose population shrank by 15,000 between 1970 and 1990, has bounced back economically thanks to tourism, education, health care, aviation and advanced manufacturing. The city’s unemployment rate was under 3 percent late last year, and it is winning national recognition as a lively, livable place with unmatched opportunities for outdoor recreation along with thriving local arts, beer and food.

'A premium on making life interesting'

So how did Duluth go from poster child for Rust Belt decline to one of America’s coolest towns, literally and figuratively? Former Mayor Don Ness summed it up in an interview with Bicycling magazine: “Most cities put a premium on making life easy. Cities like Duluth put a premium on making life interesting.”

“Duluth is 26 miles long, built on a hillside. On that hill are 40 streams,” Ness told the magazine. “What we tell folks is that you can live in this city, and have world-class mountain biking, skiing, kayaking, and sailing right out your back door, right in the city.”

Indeed, vacationers can find waterfalls, rushing streams and woodland hiking trails that rival the North Shore in inner-city oases like Lincoln Park and Lester Park. And these are mere patches of green compared with the wild stretches of Hartley Park, Hawk Ridge, Brewer Park, Magney-Snively, Frederic Rodney Paine Forest Preserve, and Spirit Mountain that give Duluth reason to brag. Within the city limits are 16 designated trout streams, 22 downhill ski runs, 40 miles of cross-country ski trails, and 60 miles (soon to be 100) of mountain biking trails. The Superior Hiking Trail winds through the city’s west side, as does the Willard Munger State Trail, where bikers and snowmobilers can glide or roar. An old gravel quarry is being eyed as a climbing facility, especially for use in winter when its walls are coated with ice. Even Jay Cooke State Park lies partly within Duluth’s boundaries.

There are 16 designated trout streams within Duluth city limits.

Duluth’s natural bounty and sweeping views of Lake Superior enrich the city far beyond tourist dollars. Lincoln Park, where Miller Creek dramatically tumbles in a series of waterfalls through a sylvan gorge, is the centerpiece of revitalization on the long-beleaguered west side. A few blocks away is the popular Bent Paddle Brewing Company, a branch of the Duluth Art Institute, and Frost River Trading Company (a store selling bags of every possible variety in a stylish, rustic design made on-site) a stone’s throw from the SRO Esmond Building, thrift stores, and dive bars.

On the east side, Chester Creek, Tischer Creek, and Lester Park border hillside neighborhoods with tree-lined blocks of old homes in Tudor, Georgian, Dutch Colonial, Prairie and Foursquare styles. Duluth may be the last city left with intact historical character where a moderately successful designer, artisan, or entrepreneur might be able to afford a house built for a lower-rung robber baron.

One of the most distinctive neighborhoods in America is Park Point, the modest Miami Beach of the North, a literal sandbar poking into Lake Superior lined by funky old (and some not-so-funky new) houses with a beach out back. Residents have established a community garden at the Lafayette Square Community Center and vigilantly monitor development proposals for the area.

Along the St. Louis River, the focus of new ecological restoration projects, the Riverside and Morgan Park neighborhoods are true urban villages featuring clusters of vintage homes served by parks, a bike path (Riverside), and local shops (Morgan Park).

The Canal Park and Lakewalk areas are well known to vacationers, who come to see huge freighters steaming into port and enjoy treasures like homemade sausage at the Northern Waters Smokehaus and cocktails at the Vikre Distillery. Yet too many travelers bypass downtown Duluth — the not-to-miss home of the Zeitgeist Center for Arts and Community, which includes a gallery, performance space, café, and cinema; the Electric Fetus, a gloriously old-school record store; the Duluth Depot, home to a top-notch train museum and the Duluth Art Institute; and Bob Dylan’s early boyhood home (519 North Third Avenue East).

Sorely needed for both tourists and locals is better pedestrian access between Canal Park and Duluth’s main drag, Superior Street. Right now there are a couple of unpleasant bridges with sidewalks placed inches away from heavy traffic, and one pedestrian walkway that is nearly impossible to find from the Lakewalk.

With an accent on authenticity, a one-of-a-kind natural setting, and a youthful spirit buoyed by numerous college students, Duluth seems poised to thrive in a coming economy fueled by creativity more than by raw materials. Yet there are still challenges ahead, including a drop in enrollment since 2010 and sharp state budget cuts at the University of Minnesota Duluth, and the fact that Duluth’s admirable progress to date has brought only stability, not growth, to its population. Another question is what happens now that Don Ness has left office, succeeded by political ally Emily Larson.

Proctor beats the odds

Proctor, a town of 3,000 just across Boundary Avenue from Duluth, ought to be a sleepy bedroom community with no real identity of its own. The attractions of Duluth next door, plus the convenience of strip malls and big box retailers on the interstate, should have ravaged Main Street and sucked out all the life. The closing of the PDM steel fabrication plant downtown in 2013 should have been the last nail in the coffin for this old railroad town.

Yet a look around tells a different story. The First National Bank of Proctor, the Proctor Pharmacy, Proctor True Value Building Supply, the Proctor Pizza & Sub Shop, the Keyboard Lounge and Moose Lodge #1302 anchor downtown. Nearby are the Proctor Journal newspaper, Bay View Elementary School, and Proctor High School. What explains the town’s relative vitality?

Courtesy of the City of Proctor
A community parade in Proctor.

The answer can be found a few steps away at the Proctor Area Community Center and the Proctor Area Historical Society. The reason Proctor endures is social capital, a sociologist’s phrase describing people’s active engagement in their community. The Community Center is a combination city hall, public library, food shelf, utilities office, public access TV studio, community ed classrooms, and local gathering space.

The Proctor Area Historical Society showcases local history in the old offices of the Duluth, Missabe and Northern Railway. It has 118 members, 20 of whom volunteer at the museum regularly, explains President Jan Resberg. Some don’t even live in Proctor, including Resberg himself. “I came over here from Superior, Wisconsin for a look,” he recalls, “and next thing I knew I had joined the organization.”

What Duluth and Proctor show us

Standing side-by-side overlooking Lake Superior, these two towns both defied conventional wisdom about which communities have a future and which don’t.

Lights are still burning bright in Duluth, and Proctor stubbornly refuses the role of a nondescript suburb with no there there. Their continuing vitality shows that successful cities are not just the preordained outcome of economic conditions; they are the creation of dedicated citizens who care deeply about the place they call home. 

Saturday: The North Shore.

Jay Walljasper  author of "The Great Neighborhood Book" and Urban Writer-in-Residence at Augsburg College — writes extensively on community-building, economic development and social issues. His website is JayWalljasper.com

Walljasper's earlier McKnight report on Southeast Minnesota is available here.

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Comments (6)

Shallow analysis

Duluth has a great quality of life. But if you’re going to make the claim that it’s “bounced back from economic oblivion,” you have to actually look at the economics of the city government that provides so many of the services you highlighted. It’s here that the claim falls apart. Local Government Aid makes up 37 percent of the city budget – more than property taxes and sales tax revenue combined:

http://www.duluthmn.gov/media/395564/Proposed-2016-Levy-and-General-Fund...

I can’t find Proctor’s current budget online, but an analysis I did comparing its 2014 levy to its 2014 LGA found that the state puts in about 86 cents for every dollar people pay in property taxes:

https://www.google.com/fusiontables/embedviz?q=select+col31+from+1Vs6D-g...

These cities are fundamentally unsustainable financially as they stand right now. Reasonable people can disagree about the wisdom of our LGA program. But I don’t see how anyone can conclude that a city is economically sound when such a large part of the city government's budget depends on the state.

City budget

Mirroring James' thoughts, I'd be curious about the actual city budget, employment trends, and poverty issues in Duluth. A new brewery is nice but the broader economic issues are the heart of a city.

This is what oblivion looks like

In 1982, unemployment hit 19.5% in Duluth, second only to Youngstown, Ohio.

http://www.nytimes.com/1982/11/17/us/youngstown-remains-at-top-in-unempl...

34 years later, unemployment in Duluth hit 2.9% - the lowest unemployment rate in decades. And that was after months of mining layoffs on the Range. Remember, the collapse of the steel industry was what put Duluth on its back 34 years earlier. It's a remarkable transformation.

LGA is not evidence that a city is "unsustainable," it's a recognition that regional centers like Duluth serve Minnesotans who visit or do business there impose costs while not paying property taxes. If Duluth was allowed to recoup these costs through local option sales taxes, they have the sales tax base to do it. Minneapolis, St. Paul and pretty much 80% of all cities in Minnesota are not "economically sound" using your argument.

Duluth's economy is by no means perfect, but when compared to other cities nationwide, it's an example to be emulated. Mayor Ness deserves a chunk of the credit, but it was the people of Duluth who did the hard work.

Ok, but how?

How Duluth moved from 19.5 to 2.9% is what I expected the article to tell. That Duluth is a vibrant city is evidence of a turnaround, but the 'how' promised in the title is missing.

Eat Streets

What Duluth had in spades into the 1970s, was leading local retailers downtown, and delicious ethnic foods of every variety. Emphasizing the culinary traditions can help make it more of a destination. Perhaps the new generations will rediscover the energy immigrants had in building businesses, with unique products and unique marketing systems that made Duluth thrive.
It does indeed have much great housing stock, and some great architecture. It will only help to have passenger train service from Chicago restored, and I believe the best way to do that is to use the Northern Pacific route along Highway 61, entirely separate from freight traffic. Connecting bus service along the North and South Shores, as well as west to Grand Rapids, north to the BWAC will only add to the ridership.

Well...

Business sections tend to populated by boosterism journalism in any event but Duluth is a nice town and there is incredible potential there. I think it's relative geographical isolation may be it's biggest problem. It's just far enough from larger population centers to make it an impractical commute for most people and Twin Cities tourists.

I'm hoping the high speed rail will create some opportunities for Twin Cities-Hinckley-Duluth adventures for international and national tourists visiting the MOA.