Duluth: Economy

Duluth: Economy

Major Industries and Commercial Activity

Principal manufacturing firms in Duluth include heavy and light manufacturing plants, food processing plants, woolen mills, lumber and paper mills, cold storage plants, fisheries, grain elevators, and oil refineries. The city is also a regional center for banking, retailing, and medical care for northern Minnesota, northern Wisconsin, northern Michigan, and northwestern Ontario, Canada. More than 8,000 jobs in Duluth are directly related to the hospital industry. Arts and entertainment offerings as well as year-round recreation in a natural environment have contributed to expansion of the tourist industry in Duluth. Some 3.5 million visitors each year contribute $400 million to the local economy.

Items and goods produced: steel, cement, metal and wood products, electrical equipment, textiles, prepared foods.

Incentive Programs—New and Existing Companies

Local programs

The Duluth Department of Planning and Development is responsible for overseeing Duluth's growth. Its Business Development Division is the focus of the city's efforts to attract new businesses to Duluth and retain existing firms. It promotes overall development in Duluth through agencies such as the Duluth Economic Development Authority, The 1200 Fund, Inc., the Duluth Airport Authority, The Seaway Port Authority of Duluth, Team Duluth, and others. It also coordinates economic development with the State of Minnesota and the U.S. Department of Commerce.

State programs

The Tax Increment Financing Program, a state authorized financing mechanism, is offered to assist basic businesses in financing their local expansion or location. Funds may be used to purchase land and make public improvements that support business development projects. Minnesota also offers programs to provide a mechanism for businesses to sell bonds at tax-exempt interest rates, allowing firms to receive long-term, low interest financing for fixed assets.

Job training programs

The Minnesota Department of Employment and Economic Development operates a network of workforce centers throughout the state. This WorkForce Center System, which has an office in Duluth, partners with local businesses to provide customized job training and other workforce development services. Additionally, the University of Minnesota–Duluth houses a College of Engineering and the Natural Resources Research Institute, while both the College of St. Scholastica and Lake Superior College provide customized training.

Development Projects

As the new century gets underway, expansion and retention of existing business continues to be Duluth's major focus. In recent years, more than $2 billion in private and public money has been invested in Duluth's projects. Among these over the past decade are a $20 million Duluth Entertainment Convention Center facility expansion, a $30 million University of Minnesota–Duluth library construction and Weber Music Center project, a $15 million United Health Care Claims processing center, a $26 million Air National Guard aircraft maintenance facility, a $34 million airport improvement program, a $11 million Airpark development project, a $10 million Port Terminal development plan, a $90 million St. Mary's/Duluth Clinic expansion, and a $10 million East First Street parking ramp.

Economic Development Information: Duluth Area Chamber of Commerce, 5 W. 1st St., Ste. 101, Duluth, MN 55802; telephone (218)722-5501; fax (218)722-3223; email commerce@chamber.duluth.mn.us. Duluth Office of Business Development, City Hall, Ste. 400, Duluth, MN 55802; telephone (218)723-3556

Commercial Shipping

A vital part of the Duluth economy is the Port of Duluth-Superior, which is designated a Foreign Trade Zone and ranks among the top ports in the country in total volume of international and domestic cargo shipped in a 10-month season. An average of 40 million tons of cargo is handled at Duluth-Superior each year. The impact on the local economy is $200 million annually, and some 2,000 jobs are dependent on the port. Duluth-Superior operates one of the largest grain-handling facilities in the world. Grain is the primary export product; domestic shipments consist mainly of iron ore and taconite, in addition to metal products, twine, machinery, coal, cement, salt, newsprint, lumber, and general cargo.

Connecting the port and the city of Duluth with inland markets are five railroads and 26 common motor freight carriers. Air cargo carriers serving Duluth International Airport with daily flights are Federal Express, United Parcel Service, and Northwest Airlines.

Labor Force and Employment Outlook

Duluth boasts an abundant, quality workforce, as well as a commitment to bringing new and expanded job opportunities into the community. Minnesota has the highest high school graduation rate in the nation; more than 70 percent of Duluth students go on to college or post-secondary education.

The following is a summary of data regarding the Duluth metropolitan area labor force, 2004 annual averages.

Size of nonagricultural labor force: 127,800

Number of workers employed in . . .

construction and mining: 8,300

trade, transportation, and utilities: 25,800

information: 2,500

financial activities: 5,800

professional and business services: 7,100

educational and health services: 24,400

leisure and hospitality: 13,300

other services: 5,900

government: 27,200

Average hourly earnings of production workers employed in manufacturing: $12.73

Unemployment rate: 6.1% (February 2005)

Largest employers	Number of employees
St. Mary's/Duluth Clinic	3,800
Duluth Public Schools-ISD #709	1,700
St. Louis County	1,640
University of Minnesota-Duluth	1,571
City of Duluth	1,060
St. Luke's Hospital	1,143

Cost of Living

The median sale price of a home in Duluth during the first quarter of 2004 was $125,000, up from $116,900 in the first quarter of 2003.

The following is a summary of data regarding several key cost of living factors in the Duluth area.

2004 ACCRA Cost of Living Index: Not reported

2004 ACCRA Average House Price: Not reported

State income tax rate: Ranges from 5.85% to 7.85%

State sales tax: 6.5%

Local income tax rate: None

Local sales tax rate: 1.0% (food, clothing, and prescription drugs exempt)

Property tax rate: Single family homestead property—1.0% times the first $72,000 of estimated market value (EMV) plus 2.0% times the excess over $72,000

Economic Information: Duluth Area Chamber of Commerce, 5 W. 1st St., Ste. 101, Duluth, MN 55802; telephone (218)722-5501; fax (218)722-3223; email commerce @chamber.duluth.mn.us. Minnesota Department of Employment and Economic Development, 332 Minnesota St., Ste. E200, St. Paul, MN 55101; telephone (612)297-1291; toll-free 800-657-3858