St. Louis County Heritage & Arts Center Investing in the

Location: 506 W. Michigan Street, Duluth, MN 55802 11/27/18 Depot Commitment

St. Louis County is demonstrating a recommitment to preserving and promoting the region’s history, arts and culture at the Depot.

Overview—  Depot Significance and History  Depot Subcommittee Formation & Work  Tenant Outreach  Proposed Model  Next Steps & Desired Outcomes

2 State-Wide & Regional Significance of Depot

 Represents a collaborative effort between the citizens of St. Louis County and county government to form a regional cultural and arts center out of an abandoned railroad depot  Is on the National Register of Historic Places  Has been identified as a potential (NLX) station  Houses one of the oldest historical societies in the state—known for its extensive Native American and manuscript collections  Has a notable collection of historic iron horses (trains/engines), including: o William Crooks—’s first steam locomotive (during Civil War era) o 1870 Minnetonka—worked the historic transcontinental line o Giant Missabe Road Mallet 227—one of the world’s largest and most powerful steam locomotives o Northern Pacific Rotary Snowplow No. 2—constructed in 1887, making it the oldest plow of its type in existence (a Historic Mechanical Engineering Landmark)  Viewed as a stimulant to area tourism—a hub of history, culture and arts

3 Depot History

1892: Duluth Union Depot 1977-1985: Served ’s built—serving 7 rail lines, (-Duluth) and accommodating 5,000 passengers North Star (-Duluth) lines 2017: St. Louis County and 50+ trains per day requests $5.75M for 1999: Veterans’ Memorial critical repairs 1971: Depot placed on the National Hall established Register of Historic Places

1900 1960 1970 1980 1990 2000 2010 2020

1973: Re-opened as the St. Louis County Heritage 2018: St. and Arts Center, housing the Duluth Art Institute, Louis County 1969: Last train; Depot slated for Lake Superior Railroad Museum, St. Louis County forms Depot demolition, but is saved by the Historical Society, & performing arts Subcommittee citizens of Duluth organizations

For more information, go to: http://duluthdepot.org/ 4 Depot Subcommittee Formation: At its 2018 organizational meeting, the St. Louis County Board established a Depot subcommittee, consisting of representation from the County Board, and staff of both St. Louis County and the City of Duluth, to review the operations of the St. Louis County Heritage and Arts Center (the Depot). The goal of the subcommittee was to identify a model that can be implemented to assist with the future operation and long term success of the facility.

Members of the Subcommittee: Commissioner Patrick Boyle (St. Louis County - Chair of subcommittee) Commissioner Frank Jewell (St. Louis County) Commissioner Mike Jugovich (St. Louis County) Brian Fritsinger, Deputy County Administrator (St. Louis County) Tony Mancuso, Property Management Director (St. Louis County) Pete Miller, Capital Planning Manager (St. Louis County) BreAnn Graber, Budget & Business Improvement Manager (St. Louis County) Erik Birkeland, Property & Facilities Manager (City of Duluth) Alternate: Commissioner Beth Olson (St. Louis County)

5 Current Depot Model

St. Louis County (SLC)— • Owns the St. Louis County Heritage & Arts Center (the Depot) • Contracts with Oneida Realty for management services, cleaning services, engineering services, and visitor services (front desk staff) o Oneida’s program director is partially supported financially by Oneida Realty and the other portion ($30k) is supported financially by Historic Union Depot Incorporated (HUDC) through its partial use of the City of Duluth Tourism Tax dollars City of Duluth (Tourism Tax)— • Has allocated approximately $220k in Tourism Tax dollars each year to the Historic Union Depot Incorporated (HUDC), led by Executive Director Ken Buehler o Ken Buehler is also the director of the Lake Superior Railroad Museum and Scenic Railroad; JoAnne Coombe of the SLC Historical Society serves as the Participating Member Organization representative on the HUDC Board Depot Foundation— • Is an independent 501c3 organization, which does not have space within the Depot • Mission is to preserve the Historic Union Depot as a vibrant and welcoming forum for the arts, culture and history; it raises funds and offers tenants grant opportunities (or supports activities within the building) Depot Tenants— • Current tenants of the Depot include: Arrowhead Chorale, Minnesota Ballet, The Duluth Playhouse (including The Underground), the Duluth Art Institute, the Lake Superior Railroad Museum, and the St. Louis County (SLC) Historical Society; each tenant of the building operates under its own Board of Directors • Tenants currently pay between $1.22 to $4.40 per square foot 6 Hub of History, Culture & Arts Current Tenants… The St. Louis County Historical Society maintains Veterans’ Memorial Hall, a tribute to those who served—dating back to the Civil War.

USA Today voted the Lake Superior Railroad Museum the “BEST Transportation Museum in America.” Three galleries celebrate the work of local artists by the Duluth Art Institute. Dance is art and beauty, as created by the Minnesota Ballet in the Depot. Also home to:

The Duluth Playhouse is the oldest, continuous

community theatre in the country. 7 Tenant Outreach

Since January 2018, the Depot subcommittee has been gathering information and facts related to the history of the facility’s operations, including meeting with the executive director and at least one Board member from each tenant of the facility. The agenda for these meetings was outlined as follows:

Purpose: To gather information from tenants and Board representatives regarding facility needs and strategic direction of the Depot.  Introductions  Depot Subcommittee provides brief history of the Depot’s function and management  Tenants and Board members have an opportunity to: • Discuss what is working well and what could be improved—voicing any concerns they have about the operation, maintenance and configuration of the facility • Explain how they feel their organization serves the broader purpose of the St. Louis County Heritage and Arts Center • Provide input in regards to what their organization believes the future vision (and/or strategic direction) should be for the Depot

Note: These sessions with tenants and representatives from their Board of Directors served as an opportunity for the Depot Subcommittee to hear directly from each organization within the St. Louis County Heritage and Arts Center regarding their operational and space needs. It also gave the subcommittee an opportunity to share the history of the Depot to provide some context on how the ownership and operation came to be what it is in 2018.

8 Tenant Observations

There seemed to be consensus among the current tenants of the Depot about the following: . The current operating model is not working well; there’s a lack of structure . Lease agreements should be made between St. Louis County and each tenant . There needs to be more transparency in finances and decision making . Strategic direction needs to be established and communicated . Tenants want to ensure they will continue to qualify for grants through the Depot Foundation . The St. Louis County Heritage and Arts Center (Depot) is a special historic building that needs to be properly maintained . Tenants would appreciate lower rental rates . There is a need for better wayfinding . Tenants think there could be a more welcoming reception area . Tenants are confused as to who has authority to do what—particularly whether the HUDC marketing person or the Oneida marketing person has final decision authority . There should be an assessment done of the current use of space

9 Research

Studies & Statutes: The subcommittee reviewed various studies and visioning sessions regarding the Depot, and researched a number of legal and statutory references made by tenants of the facility. Minnesota Statute makes several references to the broad authorizations that counties have to work with certain legal organizations, several of which are tenants of the Depot.

No Legal Obligations: The County Board has taken a number of actions over the years in support of its tenants. However, there is no specific legal language found that either obligated or required the County to provide certain services to these tenants indefinitely or at all. The County has broad flexibility to address the tenant make up, tenant space allocations, rents, financial allocations and other items as it deems appropriate.

Space Utilization: During this process, the subcommittee also engaged the architectural firm DSGW to assist with design questions related to existing space utilization within the Depot. The specific breakdown of square footage is being reviewed by St. Louis County and will be shared with tenants to ensure rental charges align with space usage. 10 Proposals

The Subcommittee took into consideration the following proposals:

 Request from the Lake Superior Railroad Museum to find space for a large model train set that is to be donated to the Museum Status—  The Depot Subcommittee supports the continued investigation into methods for accommodating the model train set  St. Louis County asked DSGW to develop cost estimates to potentially place the model train within the facility. However, due to financial constraints, alternative options which would most likely require the reallocation of space are being reviewed.

 Request from the Historic Union Depot Incorporated (HUDC) to manage the St. Louis County Heritage & Arts Center Status—  HUDC representatives Ken Buehler, JoAnne Coombe, and Jeff Tucker met with members of the Depot subcommittee to discuss the proposal  The Depot Subcommittee, in the interest of transparency and exploring options, issued a formal Request for Proposals (RFP), allowing HUDC and any other interested parties, to respond

11 Request for Proposals

The Subcommittee issued a Request for Proposal (RFP) to seek an individual or organization (and/or partner organizations) to guide the Depot in a strategic restructuring through a new model for management, operation, and marketing services that will streamline the Depot operations, increase earned and contributed revenues, optimize use of space, and enhance its role as a regional heritage, arts and cultural center through its prime location. The County intended to enter into a three-year contract.

The following areas were outlined:  Marketing & Visitor Services  Finance, Grant & Fundraising Services  Operational Services

Note: St. Louis County reserves the right to reject any or all proposals submitted when deemed to be in the County’s best interest.

12 RFP - Marketing & Visitor Services

St. Louis County wants to find an individual or entity who can…

 bring different ideas and events together to create and implement a collaborative marketing plan that highlights the variety of arts and cultural opportunities at the Depot.

 leverage the visitor attraction of the Lake Superior Railroad Museum and North Shore Scenic Railroad, build upon the success of The Duluth Playhouse, and spread the word about what the Minnesota Ballet, Duluth Art Institute and St. Louis County Historical Society (including the Veterans Memorial Hall) have to offer.

 not only promote the tenants within the Depot as a whole, but also seek out opportunities to bring in outside exhibits or host events (within the Great Hall or beyond) that attract visitors from the region and beyond.

13 RFP - Finance, Grant & Fundraising Services

The individual or entity would be responsible for…

 managing the operational/marketing budget (including gate receipts) of the Depot as a whole—not the budgets of the individual tenants.

 exploring grant and fundraising opportunities to leverage funds to stretch the impact of any allocation given to the Depot. Note: These additional monies could enhance the current offerings of the Depot and/or bring in new audiences to the Depot so they discover all it has to offer.

14 RFP – Operational Services

The individual or entity would be expected to…

 assess the best usage of space within the Depot. Note: Specific lease agreements would be between the tenant and St. Louis County. However, space allocation and use of common areas would be the responsibility of the individual or entity (who is acting as liaison between tenants and St. Louis County).

 ensure community vibrancy and revenue generation to promote sustainability of the facility.

15 RFP Status

RFP Status:  Interviews of the two Respondents were held Nov. 14  Respondents were notified Nov. 26 whether or not they were selected  Oneida Realty was selected to negotiate a contract. It is St. Louis County’s intent to award a contract for a 6-month term (with an option to renew 3 to 6 months) for a transitional period, while the County looks to hire an Executive Director

16 Proposed Model

 Hire an Executive Director for the St. Louis Heritage and Arts Center (Depot). . In evaluating these proposals and factoring in all of the information gathered over the past year, the Depot Subcommittee has determined that in the long term an employee of the County would be best suited to address the concerns of the Depot’s tenants and move forward the goals of the tenants and County. . This employee will oversee the building’s operations to provide greater transparency, eliminate conflicts of interest and ensure the County’s vision of a sustainable and vibrant Depot is achieved.  Have Oneida Realty and its program director serve as manager and operator of the facility until an Executive Director is hired.  Provide support to Oneida through the transition to the Executive Director model.

17 Next Steps

 Draft leases and tenant expectations for current tenants of the St. Louis County Heritage and Arts Center  Review space assessment and needs identified by tenants  Continue to explore space options for model train  Seek Board authorization for creation of Executive Director position  Continue to meet regularly as a Depot Subcommittee

18 Desired Outcomes

The Depot Subcommittee would like to thank the Depot tenants and Board members for their time and energy. Our ultimate goals are to:  Promote the vibrancy and sustainability of the Depot  Be transparent and eliminate conflicts of interest  Create a collaborative culture among tenants  Set clear expectations for St. Louis County, its operators, and its tenants  Make the best use of space available  Position St. Louis County to make another request for a State appropriation to preserve the integrity of the historic building’s structure

19 County’s Commitment The County is prepared to:

 ensure the vitality of the St. Louis County Heritage and Arts Center;

 partner with the Depot Foundation to further it mission to support the Depot as a whole; and

 request a State appropriation (for 2020 cycle) to restore and renew the facility. Previous project State request of $5.75M (plus a County match) to:  address critical life safety issues, such as fire alarm system upgrades and metal canopy roof replacement;  establish a sound basis of design and equipment replacement costs for heating, ventilation, air conditioning (HVAC) and mechanical, electrical, plumbing (MEP) improvements;  provide energy efficient design and materials for long life cycle systems renewal (wall, roof and windows); and  preserve the exterior shell integrity of the structure and prevent the need for demolition.

The Depot Subcommittee Chair will request that the County Board continues its support of the committee’s efforts to implement the plan and assist with the transition to the new model.

20 Thank You Questions? Contact: Brian Fritsinger, Deputy County Administrator (218) 733-2955 or [email protected]