Duluth Entertainment Convention Center on firmer financial footing

DULUTH — After a rocky 2023, the Duluth Entertainment Convention Center currently appears to be in much better financial shape.

The cash-strapped venue sought and received

a $1 million line of credit

from the city last year but did not seek an extension of that financial support when it sunset in October.

In a recent update for stakeholders, DECC Board President Peter Singler wrote: “I’m happy to say the DECC did not use any of the credit.”

Rather, the line of credit served as a comforting but unneeded safety net after the organization’s reserves dipped to $891,000 in September 2023. At the time, Dan Hartman, the DECC’s executive director, described the balance as “a scary place to be,” given the scale of the nine-venue operation with its large ongoing payroll and overhead expenses.

Hartman said the DECC is now in a much more secure position, having rebuilt its reserves to more than $2 million.

“I’d be lying if I said it has been easy,” Hartman said. He referred to staffing cuts and reduced hours as “the hardest part of the journey.”

But City Council President Roz Randorf praised Hartman and his team for making the hard decisions needed to correct course.

“They had to right-size their operations,” she said.

Hartman said the DECC will need to accept the reality of greater costs going forward on a number of fronts, including wages and higher utility rates.

Randorf said she was “thrilled” to learn of the DECC’s progress, noting that the facility benefits not only Duluth but the whole region.

Hartman said the DECC has boosted its net income by 19% compared to the previous year, and its convention revenues are up by 15%. He pointed to the booking of popular entertainment events at the DECC as an area of particular improvement.

Clint Austin / File / Duluth Media Group

A mild winter helped the DECC’s bottom line, too. Hartman estimates the organization spent $100,000 less on moving snow than the previous year.

Singler said the DECC has hosted 602,385 guests, pumping more than $53 million into the local economy in the past year.

Randorf acknowledged the DECC’s initial request for a line of credit stirred anxiety on the City Council.

“We’re cash-strapped, too. We’re always trying to do more with less ourselves,” she said. “So when another organization leans on us for support, our hackles rise pretty quickly.”

Yet Randorf said she believes the council was wise to offer the DECC support during a period of financial uncertainty.

“We need them to thrive,” she said, noting the significant role the DECC plays in the local tourism economy.

Duluth City Administrator David Montgomery also expressed gratitude for the strides DECC management has made.

“The city is pleased to see the significant progress in the DECC’s overall financial condition. We understood the DECC’s need for a line of credit to provide a safety net while they worked to put things in better order,” he said. “Congratulations to the entire DECC team.”

But Hartman said the DECC faces continued challenges as it seeks to address at least $15 million in deferred maintenance.

One of the DECC’s most pressing needs is to address leaky hot-water lines that heat the facility. Hartman said there is no shut-off valve for the system at present, leading to wasted energy in the summer months and damage when aging pipes spring leaks. Those improvements alone could cost around $2.5 million.

He said that seating in the DECC auditorium also needs replacement. The 2,300 seats date back to 1966, and while they were reupholstered in the late 1990s, Hartman said they are narrow by today’s standards and the auditorium lacks sufficient accommodations for people with disabilities, as well.

The true scale of the improvements needed at the sprawling DECC campus remains somewhat of a mystery, according to Hartman, who said he would like to conduct a thorough needs assessment of the full operation. The cost for that analysis alone is steep, at an estimated $400,000. But Hartman said it could provide a valuable road map for the future.

Singler wrote: “Given our complex campus of nine venues, there will surely be more interesting times ahead. However, we want to take a pause and celebrate. Big shout out to our staff who have done more with less, while simultaneously hosting new business. The DECC also owes a debt of gratitude to my fellow board members for the directional leadership that has steered us well, and to the city of Duluth and its past and current leadership and councilors for providing the safety net.”

Peter Passi covers city and county government for the Duluth News Tribune. He joined the paper in April 2000, initially as a business reporter but has worked a number of beats through the years.