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Business North - The Daily Briefing - Business Newspaper Online
Street upgrades could be costly for business property owners
Owners of Duluth business property might have to pay a new monthly fee to upgrade city streets, Chief Administrative Officer Dave Montgomery said at a Tuesday forum.
“We’re targeting a $8 or $9 per month fee for residents and then a tiered business rate. Those rates would range anywhere from $40 a month up to $300 to $400 a month for the very largest businesses,” he said at the event, sponsored by the Duluth Area Chamber of Commerce and Duluth News Tribune.
A task force composed of City Councilors Linda Krug, Emily Larson and Jennifer Julsrud was seeking input on methods to annually bridge a $6 million street improvement funding gap. Some of the alternatives that were cited include imposing road tolls, a gas tax or downsizing the city’s street network. A fee remains on the table in the event that a more viable alternative does not emerge.
It’s a preferred method because it would apply to all property owners, not just private firms, Julsrud said. She compared it to the city’s street lighting fee, which Julsrud deemed “extremely popular.” (Some in the audience felt she made the remark in jest).
“The benefit of the fee is that you can capture some of the non-profits in town,” she said. “It does make it feel to businesses that it’s more equitable because (non-profits) pay their fair share.”
If Duluth raises the $6 million through a traditional property tax increase, Montgomery said, the city’s share of the tax levy would increase 30 percent during a two-year period.
Duluth businessman Jim Booth questioned whether the city has over-extended its reach. He suggested city officials cut back on “nice, feel-good projects,” specifically mentioning the NorShor Theater restoration.
“Our job as a city is police and fire, infrastructure. Everything else is secondary. If we keep raising fees and taxes, we’re going to have exactly what the school system has, which is nice, shiny roads and nobody using them,” Booth said. “We’ll have people living in Esko, Proctor, Hermantown, Two Harbors and not in Duluth. If we can put together the NorShor Theater, which we really don’t need … we’re smart enough to figure out how to do the roads without raising a tax.”
Montgomery said the city needs balance, arguing that a strong business and community investment strategy could broaden the economy so it can support a wide variety of public investments.
“We do not want Duluth to turn into Detroit. That cannot happen and will not happen. If all you want is police, fire and roads, there are other cities in this country that look like that. I don’t think we want a city with no amenities – with nothing for people to do and nothing for people to enjoy,” he said.
City councilors will review its options as the committee of the whole.
“What we’re talking about is not a done decision but part of a process,” Larson said.
So far, Krug said, news about the potential fee have upset some taxpayers and stimulated others to seek more conversation about possible solutions.
“We really are turning over every stone,” she said.
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