Duluth Weighs Costs, Benefits As Future Cruise Ship Destination

DULUTH — City officials have stepped back to consider whether they should invest more money to better establish Duluth as a port of call for Great Lakes cruise ships in the face of dwindling traffic. To allow for that conversation, city councilors delayed action Monday on a resolution that would have authorized the expenditure of up to $500,000 in new baggage-handling operations for a cruise ship terminal it has operated out of the Duluth Entertainment Convention Center for the past several years.

That price tag actually is likely a low-ball estimate of what the true cost will be, according to Dan Hartman, executive director of the DECC. At a Thursday evening agenda session meeting, he told councilors the city may need to spend more like $800,000 on the proposed facility improvements. Before the city obligates that money, Hartman encouraged councilors to consider whether they risk going overboard in their efforts to promote Duluth as a cruise ship destination, especially given recent developments.

“A few years ago, we had 15 cruise ships coming through in one season, and the year before that we had 12. So, it looked like it was progressing. But now, it’s gone hard in the other direction,” he said, pointing out that Duluth is included in just six cruise ship trip itineraries this year.

The Twin Ports remain a popular destination, with voyages to the western tip of Lake Superior continuing to sell out quickly, according to Hartman.

While recent developments do not bode well for Duluth at present, Hartman noted that interest in Great Lakes cruising continues to grow, as evidenced by the 64 cruise ship stops scheduled in Milwaukee this season. To stay in the game, Hartman said Duluth has made commitments to U.S. Customs and Border Protection officials that it will invest in a passenger terminal properly equipped to process international travelers. Those accommodations include designated and secure baggage-handling operations — processes that currently occur in a makeshift curtained-off area of the DECC that formerly served as a locker room. “We are obligated to put this baggage facility in if we want to do cruising,” Hartman said, adding: “The contract will be voided if the city doesn’t.”

Yet, Hartman suggested councilors would be wise to pause and consider whether it would be wise to invest an additional $500,000 to $800,000 in a cruise terminal, on top of about $1.2 million or so the city already has spent on the facility and dredging to accommodate cruise ships. Hartman said the DECC does not profit from the cruise passenger terminal it hosts, with collected fees used to cover service expenses and repay capital improvement costs over time.

The city has relied on tourism tax proceeds — a 1% charge collected on sales of food, drink and lodging — to fund cruise ship infrastructure, to date. But Hartman noted the payback has been slow. “These are finite dollars, and we have to ask if this investment offers the best return for our community, overall,” he said.

At large Duluth City Councilor Terese Tomanek pointed out that the amount of money required for proposed passenger terminal upgrades would equate to more than a 1% increase in the city’s property tax levy, if that were the funding mechanism, versus a sales tax.

Duluth News Tribune