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Duluth Council resolution could release state aid to Essentia Health

Measure would provide $5.3 million for public infrastructure improvements

(EwingCole rendering) Essentia Health proposes to build an 18-story outpatient/inpatient facility faced with patterned glass designed to minimize the risk of bird strikes. The curved lines are intended to preserve lake views and avoid wind disruption.
(EwingCole rendering) Essentia Health proposes to build an 18-story outpatient/inpatient facility faced with patterned glass designed to minimize the risk of bird strikes. The curved lines are intended to preserve lake views and avoid wind disruption.

A resolution headed to the Duluth City Council on Monday could loosen some purse strings for Essentia Health, allowing it to begin drawing upon nearly $5.3 million in state funds for road improvements and utilities that will serve its evolving downtown medical campus.

All told, Essentia expects to invest about $800 million of its own funds — $675 million for new facilities and another $125 million to renovate and upgrade existing structures.

Several blocks away, St. Luke’s is preparing to invest about another $249 million in its own downtown medical campus.

Together, the city’s two largest medical care providers are expected to sink more than $1 billion into their downtown facilities in the next several years.

To assist with their growth by supporting needed public infrastructure, the state of Minnesota has agreed to provide a $98 million infusion of aid, with the city of Duluth agreeing to kick in another $10 million over the next decade .

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The first dose of state funds — about $5.3 million — could be delivered to Essentia shortly, if the City Council passes a resolution headed its way on Monday.

Those state dollars would be earmarked to cover the costs of “road construction and water, gas, sanitary and storm sewer improvements, as well as steam and hot water improvements related to the district energy system in the district.”

At Large City Councilor Arik Forsman asked Noah Schuchman, Duluth’s chief administrative officer, how the state funds would be disbursed at a Thursday night agenda session meeting.

Schuchman responded: “We met last week with DEED (the Department of Employment and Economic Development) to talk through the mechanics of that. Some of that is still being sorted out. There are a variety of applications and documentation that the city will need to provide. … But there are seven specific projects that are called out in the legislation, and so we’ll be working with DEED to sort out the timing of when that funding is available.”

Councilor Joel Sipress asked Schuchman if the initial $5.3 million to be provided would be fully funded by the state monies set aside for the project or if a local match would be part of the mix, should the resolution pass Monday.

Schuchman said that to the best of his knowledge the first slug of money would involve strictly state funds.

“This is the first of what will likely be at least seven or eight of these agreements. It will allow for, in this case Essentia, to do work within the right-of-way and keep the city from having to do work that connects to the work that the hospital is doing. It will allow for the work to be consistent and not be a jigsaw puzzle that we’re piecing together. It also will be more efficient,” he said.

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.

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