A small group from each organization’s board of directors will examine how and if the DECC and Visit Duluth can work together to improve efficiencies through “alignment,” which includes a possible merger.
The conversations will “explore whether or not we have common goals and objectives that we could achieve more efficiently through some type of alignments,” Visit Duluth President and CEO Anna Tanski said.
What an “alignment” looks like isn’t clear, she said, as conversations are just in an exploratory phase. But there was a brief conversation about a potential merger at a recent Visit Duluth board meeting, she said.
The DECC’s Interim Executive Director Roger Reinert said their board also had a discussion during an August meeting about a potential merger.
“I’m glad to see that our organizations can come together … with the city and really explore those avenues and see if there are any opportunities that will help both of us in recovery,” Tanski said.
COVID-19 has hit the tourism industry hard. Visit Duluth receives funding from the city’s tourism tax. As of July, its tourism tax allotment had decreased by 33%. It has laid off seven employees, leaving only three full-time employees on staff, she said.
With its current finances, Visit Duluth said it can last until the end of the year.
Visit Duluth is pursuing funding from the county’s Coronavirus Aid, Relief and Economic Security Act distribution and is advocating for Paycheck Protection Program reform at the federal level. Currently, PPP loans can’t be used for organizations structured similar to Visit Duluth.
The DECC has also reduced staffing, with 52 of the 474 staff on the March payroll still employed. The organization burns around $200,000 monthly, and had around $1 million in reserves in August, DECC officials told the News Tribune at the time.
“Our organizations have been devastated — as has our entire industry — by COVID,” Tanski said.
Both organizations have worked together closely for decades, Tanski said. Visit Duluth often handles promotion for events at the DECC or Bayfront Festival Park, and the two organizations sometimes partner on conventions at the DECC.
Their relationship could be an advantage if the two organizations decide to merge, Reinert said.
“Both organizations are about promoting this community in this region and bringing visitors to this region,” he said. “Both the DECC and Visit Duluth have a front-door responsibility to the city of Duluth and Northeastern Minnesota.”
Although the two organizations complement each other well, the boards of the organizations could identify roadblocks to a potential merger, Reinert said.
Any changes, like a merger, involving the DECC would need state-level approval per state statute, Reinert said.
Duluth Chief Administrative Officer Noah Schuchman will facilitate the conversations, but no timeline for the discussions has been set, a city spokesperson confirmed.