Developers in Paradise
Or, Why we shouldn’t have to pay a penny for the DECC
By John Ramos
Last week, in a
column entitled, “The DECC is not the Aquarium,” Harry Welty explained
that he planned to vote for an increased tax on restaurant meals and bar
tabs in Duluth because the tax would go to finance a proven money-maker
like the Duluth Entertainment Convention Center rather than a “sideshow
attraction” like the Great Lakes Aquarium. “The Aquarium,” Welty notes,
“was sold to us with the promise ‘if you build it they will come.’ Only
they didn’t.” Such a situation, Welty believes, does not apply to the DECC.
People “are already flocking to the DECC,” and an expansion would only
help the situation.
I am not here to
duel with numbers. Nor do I deny the possibility that a larger DECC may
attract more people. I just don’t think we should have to pay an extra tax
every time the DECC wants to expand. The DECC expanded just eight years
ago, and financed the expansion with a half-percent lodging tax and a
half-percent food-and-beverage tax. In that instance, of course, the taxes
were simply imposed on the city by the state Legislature, without a
referendum. The current proposal is unique in that citizens have a voice
in the matter. I hope that voice is used to resoundingly reject the new
tax.
Welty’s
assertion notwithstanding, the DECC resembles the Aquarium in many ways.
For one thing, many of the same people are involved with both
organizations. Marti Buscaglia, publisher of the Duluth News Tribune,
sits on the board of the DECC; Buscaglia was also the head of the task
force responsible for finding a way to “save” the Aquarium in 2002. John
Bray, another DECC board member, served on the Aquarium task force as
well. Mark Emmel, an executive with Labovitz Enterprises, which owns the
Holiday Center complex downtown, serves on both boards. State Senator
Yvonne Prettner-Solon, who will be responsible for the taxing legislation
in St. Paul, sat on both boards until June of 2005.
When we
examine ads put out by ArenaYes!, the group lobbying for approval of the
new tax, the web of connections grows even denser. According to the ads,
several “diverse groups” support the new tax: the Chamber of Commerce, the
Canal Park Business Association, Visit Duluth (the city’s tourism bureau),
the Duluth Superior Symphony Orchestra and the Greater Downtown Council
all support it, as do Mayor Herb Bergson and every member of the City
Council. Many of the people in these organizations are associated with the
Aquarium. Mayor Bergson, City Councilor Russ Stewart and City Councilor
Laurie Johnson currently sit on the Aquarium board, as does Terry Mattson,
executive director of Visit Duluth. Jon Driscoll, an executive with the
ZMC Hotel Corporation, which is owned by the Goldfine family, serves on
the boards of Visit Duluth and the Aquarium. Also represented on the Visit
Duluth board are Yvonne Prettner-Solon (again), Mark Emmel (check), Chad
Netherland (manager of the Aquarium), Cindy Hayden (publisher of Lake
Superior Magazine and Aquarium board member) and Ken Hogg (former city
councilor and Aquarium board member). I could go on, but you get the
picture. The “diverse groups” supporting the DECC expansion are not
diverse at all, but a small group of individuals intent on furthering an
expansionist tourism agenda.
The
similarities between the Aquarium and the DECC run deeper than their
shared board members. They also share the same funding source. The
hospitality taxes approved by the Legislature in 1998 were supposed to be
applied only to the DECC expansion, but when the Aquarium failed in 2002,
our leaders enacted new legislation that diverted a portion of the
hospitality taxes to the Aquarium. Indeed, the reason we are now being
asked to approve an additional hospitality tax is because the Aquarium is
gobbling up so much of the original fund. Without the Aquarium, we would
not need a new tax for the DECC. For some reason, this crucial bit of
information has failed to reach the ArenaYes! ads.
I am not
against tourism, but I am against the city behaving like a developer and
endlessly expanding on credit. The proposed tax is only a part of the DECC
expansion plans. If the tax is approved and the plan goes forward, the
city will ultimately be responsible for more than $30 million of costs
associated with the project. Other sources, such as UMD and the DECC
itself, claim that they will provide this money, but if they should fail
to pay their share, the city will be held responsible. It is in this
crucial detail that the proposed DECC expansion most closely resembles the
Aquarium. Many people and organizations were supposed to help out with the
Aquarium if it failed. None did, and the city was left holding the bag.
The same thing could easily happen with the DECC.
I find it
bizarre that the city is rushing into this deal so heedlessly. We didn’t
know a thing about it two months ago, but suddenly it’s the hottest item
on the agenda. What, exactly, are we voting on? The city is being asked to
assume most of the risk for a project where private operators stand to
collect most of the benefit. No detailed projections have been provided
for the project; we are only treated to vague, rosy scenarios of what will
“probably” happen. No safeguards are in place to protect the city if these
scenarios do not come true. Finally, no one can guarantee that attendance
at the DECC will continue to rise. Have we learned nothing from the
Aquarium? When the city tries to act like a speculator, only trouble
ensues.
On a
personal note, I will say that hockey games, concerts and trade shows mean
very little to me. If the DECC is such a wonderful money-maker, why can’t
it pay for its own expansion? I would prefer to applaud them from a
distance, and keep my pennies for myself.
___________
Published in the
Reader Weekly, 2/23/2006. |
