Duluth City Council President, Tourist Attractions Prepare for Tough Times After Budget Shortfall

So far businesses are allowed to open early May, but there's weeks of preparation involved.

DULUTH, Minn.- After Mayor Emily Larson’s announcement of the City’s tremendous 2020 budget shortfall due to COVID-19, tourist attractions navigate uncertain times through the most important dollar-making months Duluth sees all year.

While Governor Walz’s stay-at-home order right now says businesses can start opening up the first week of May, owners of attractions told us they can’t just throw open the doors when the green light is given. Planning, restructuring, and re-hiring have to take place, pushing many businesses to open at the end of May.

This, according to Duluth City Council President Gary Anderson, is just the start of drastic changes the economy is bound to go through.

“$25 million from of a $90 million general fund is a huge chunk of money,” he said.

Anderson said it’s difficult to see the huge shortfall in the city’s budget for 2020 that will can many important projects.

“We look at our streets plan and the community was really excited that we’re going to get 19 miles of streets done in 2020,” said the Council President. “To know that that number is going to get cut, that’s really tough. And we’ve been waiting for years.”

Just one of the many things on the Administration’s plate–like having to make personnel cuts–which Anderson hopes is handled delicately. “That Administration work as diligently as we can with our bargaining units.”

“A vast majority of our city employers are represented by labor unions,” he said. “We need to make sure that we’re doing our best to honor the contracts that we have in place.”

According to Mayor Larson’s Administration, tourism taxes are projected to take a hit of $6 to $9 million.

“It goes to show you, not only the benefit of what the tourism tax gives back to the community, but also how it generates the additional sales tax revenue that gives back to the city,” said Justin Steinbach owner of the Vista Fleet.

The Vista Star sits lonely in the Minnesota Slip. “I’ve never seen anything like this. It’s eerie, it’s like a ghost town,” he said.

Steinbach is used to it being busier with school trips and Mother’s Day Brunch. and crews maintaining the vessel.

“This is the time of year where we’ve got weather like this, you start seeing people come out in droves. We’d be gearing up for our retail, we’d be doing man-overboard drills, training deck hands, line-handling,” he said.

He’s preparing to steer his company through some rough waters.

“We typically produce revenue six months out of the year, and so any one of those months is a major loss right now,” said Steinbach.

While he plans to hire back his staff to work tours and events with social distancing in mind, he said only a quarter to a third of his 50 to 75 employees will get their jobs back.

“It’s always a horrendous decision. It’s not easy for anyone,” said the Fleet owner. “It’s not easy for the employers, it’s not easy for the employees, no one’s happy right now.”

Hiring for these summer attractions is extra tough, as normally these businesses would be all hired up and preparing for tourists by now. “It also takes a long time to get these attractions up and running,” Josh Miller, President of the Attractions Council, said.

“And that’s been the time in the past couple months where most of us have been home in quarantine, and we’re not able to do things like summer hiring,” he said.

For right now, Steinbach said things should be operating as close to normal as they can, for people to get out on the water this summer.

“This community provides so much beauty and so much natural experiences that they will come back. It will happen. It just might be different than it was before,” he said.

But, not all of these businesses will make it out the same after COVID-19.

“Where it makes sense, certain attractions may be slower to open or not even open at all,” said Miller.

“Our economy is just shifting under our feet,” Anderson said.

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