Duluth’s economic development arm sees rash of resignations

DULUTH – The city department most critical to economic growth is without several top leaders following recent resignations.

Duluth’s planning and economic development department has lost about 15% of its employees since January, when Mayor Roger Reinert took office. That includes its director, Chad Ronchetti, who begins working in the same role for the city of Hermantown next week. The department manager also resigned in August to work for a nearby economic development entity, and long-time deputy director Adam Fulton’s position was eliminated in the spring. Two city planners and an attorney who worked closely with the department have also resigned.

That much turnover over a short period could be disruptive to the city’s economic development efforts, said Joel Sipress, a former Duluth city councilor.

The department is “extraordinarily important and highly complex,” he said.

The city is now without a dedicated liaison for developers, bankers, builders and the state at a time when hundreds of millions of dollars in construction is underway across Duluth. Last year, building permit data showed nearly $380 million in project costs.

Reinert said Thursday his administration has moved swiftly to put another department director with development experience into an interim role, and also elevated temporarily a long-time city planner. Reinert, too, along with the interim chief administrative officer, David Montgomery, have become more hands-on with developers in recent days, he said.

“We’re in the same hypercompetitive market that everybody else is,” Reinert said about the departures. “We have to do a much better job of thinking about talent acquisition across the organization.”

He said he will rely on the city’s Chamber of Commerce and other business development groups for candidate help as a search gets underway to replace Ronchetti.

Duluth Area Chamber of Commerce President Matt Baumgartner said the loss of Ronchetti, who brought valuable private sector experience to his role, is sizable.

The chamber is concerned with the turnover, worried about execution of tax base, housing and other growth goals, he said, and has fielded calls from developers asking about the changes.

“You run the risk of having people concerned that there aren’t staff members at City Hall who can execute the priorities of the city,” Baumgartner said.

Ronchetti was hired to replace Chris Fleege when Fleege died unexpectedly last year. Ronchetti said Thursday that the job’s demands were taking away from his young family, and the Hermantown position, where he lives and his kids attend school, is a better fit.

The wide range of responsibilities in the Duluth role, from construction services to leading the Duluth Economic Development Authority, “takes everything you’ve got,” he said. “My family just wasn’t in a position to give to that level.”

Sipress said the department’s leader must build relationships with businesses contemplating a move to Duluth and existing businesses looking for city support, and know how to advocate for the public’s interest within those relationships. Development agreements overseen by the department are complicated and require extensive oversight.

Cities feel pressure to promote economic vitality, retain jobs and expand their economy, said Andrew Karch, chair of the Department of Political Science at the University of Minnesota.

With a leadership void, “they may find themselves to be at something of a competitive disadvantage with other cities pursuing the same objectives,” he said.

Montgomery, who is also helping to cover interim economic development director Ben VanTassel’s main role as leader of administrative services, said he was confident the city wasn’t “adrift.”

“You never want to have voids in your top leadership,” he said. “It’s not ideal, but it’s not ideal for the short term.”