SAM Magazine-Duluth, Minn., Feb. 5, 2009-A move by Duluth to obtain $6 million as part of the economic stimulus package being debated in Congress to improve the city's water supply is drawing fire from privately-held resorts in the region, as the money would pay for a new source of water for city-owned Spirit Mountain's snowmaking system. The new snowmaking system would also more than double Spirit's pumping capacity. Private resorts are citing unfair competition by a government-owned entity.

The funding requested by the city of Duluth, part of a larger stimulus package the city is seeking, would eliminate the use of city-treated water for snowmaking and increase the water supply to the city's west side. To switch the resort's snowmaking to non-treated water, the resort proposes a direct-intake water line from the St. Louis River, with a new pumping package and pump house, and to increase pumping capacity from 2,700 gpm to 6,000 gpm.

"The overriding concern at the moment is infrastructure, getting water from another source," says Spirit executive director Renee Mattson. "It helps solve the city's water supply issues. We're taxing a water system that's very old. The new snowmaking system would allow more expansion on Duluth's west side." As a shovel-ready project-the snowmaking plant is part of the resort's master plan, which was approved by the Duluth city council last August-it fits the requirements of the federal stimulus bill.

However, the request for federal funding for Spirit's snowmaking expansion has provoked ire from private resorts in the region. "We all like to see improvements around the industry, but those improvements should be made as a successful area has the means to pay for them," says Afton Alp's Amy Reents. Reents points out that Spirit Mountain already receives tax dollars. The city-owned resort was the beneficiary of a $1.647 million bond issue in 2003 by the City of Duluth to refinance the resort's debt, and the ski area receives $225,000 per year from tourism taxes which are earmarked for resort improvements.

The recent approval of Spirit's 20-year master plan, which outlines a potential for $40 million in improvements over two decades, further raises the private resorts' ire. Additional enhancements could include building a new tubing operation and tubing chalet, replacing all of the ski area's lifts, installing a scannable lift-ticket system, remodeling the main chalet, improvements to the resort's food and beverage operations, reconstructing parking lots and expanding summer operations.

Mattson understands the concerns of the private areas, but points out that the majority of any improvements at the area will, in fact, be funded from operations. As for the annual $225,000 the resort receives from tourism taxes, Mattison says, "I make no apologies for it. It was a tax that was established for the facility, and to generate tourism generally." And she downplays the impact the master plan might have on the private resorts. "As a master plan, it includes every possible improvement. It's a wish list, and includes many things that probably won't come to pass," Mattson says.

Ironically, criticism of Spirit is the result of its success. The city of Duluth founded the area at a time when the economy of northern Minnesota was struggling. "We were designed to have an economic impact on northern Minnesota," says Mattson. "We pump in $37 million to this region. The funding we received initially was for a purpose, and we've far exceeded that spending in terms of benefits delivered to the city and the surrounding area."

That explanation, though, does not satisfy nearby privately-held areas. "Improvements to Spirit Mountain would only divert business from other Minnesota, Wisconsin, and Michigan areas," says Reents. "During these economic times we all have struggles, but now are expected to give more of our tax dollars to the competition."

Afton Alps and other private resorts in the region-ranging from Lutsen Minn., and Granite Peak, Wis., to Indianhead, Mich., and Ski Snowstar, Ill.-have retained legal counsel to protest the infusion of federal stimulus dollars into Spirit Mountain. \