Spirit Mountain likely needs an extra cash boost from Duluth to open this winter

DULUTH – It will likely take an extra $350,000 in public support to get Spirit Mountain up and running this winter, which the Duluth City Council seemed willing to spend even as the city's budget is under extreme duress due to the pandemic.

On Tuesday night the Council approved the public ski hill's budget, which calls for the usual $420,000 in tourism tax support and the additional cash infusion, since the mountain will not be making any money from weddings, banquets, mountain biking or the adventure park as it remains closed this summer.

"We're not voting to give Spirit Mountain one penny right now," council member Joel Sipress said. "It does presume we're going to invest in Spirit Mountain in the future ... that's something I'm comfortable with."

Executive Director Brandy Ream told council members the loss of summer business is "significant" but that opening for the winter will still be less expensive than closing all season due to outstanding debts and obligations the mountain usually covers with its own revenue.

Asked if there is a Plan B should the City Council be unable or unwilling to spend the extra money later this year, Ream said, "We're still working through that with the city."

"I am hopeful with changes we have made we will be able to make that on $350,000, but I cannot guarantee that we won't be back here saying this has not worked out," she said.

Mayor Emily Larson is convening a task force this summer to look at how the mountain, a government-owned recreational authority that was formed by the Minnesota Legislature in 1974, should operate in the future.

Spirit Mountain is able to cover its operating costs in normal years but does not generate enough cash to keep up with capital investments. Including bond payments, Duluth spends about $1.1 million in tourism tax dollars on Spirit Mountain every year.

Options the task force will explore include a public/private partnership, converting to a nonprofit, bringing management onto the city's payroll or even a complete sale of the mountain — which may be extremely difficult due to legal requirements tied to government cash and property grants that created the ski hill.

"In order to unwind these restrictions, the city would be required in most cases to buy out or pay back the original grant in some fashion," Jim Filby Williams, the city's facilities director, wrote in an e-mail to council members this week. "The cumulative cost of those buyouts probably makes sale of all or major portions of Spirit infeasible."

Leasing the property would be more tenable; the task force is expected to undertake an economic impact study that could help justify continued investment in Spirit Mountain.

"We're going to have to make some hard decisions about which of our assets are we going to invest in, and what facilities are we going to have to let go of," Sipress said, referring to budget troubles that are expected to continue even after the pandemic subsides.

Spirit Mountain is scheduled to open in November.