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The Duluth City Council voted 8-1 Monday night to approve a controversial contract with an out of state firm to work as the city's tourism marketer for the next two years. 

Many council members said they would have preferred to award the 2-year, $3.6 million contract to one of the three local firms who emerged as finalists.

But most said they felt their hands were tied and that the city could face legal risk if they failed to back the selection made by a city working group in a competitive bidding process.

“I’m not personally happy with the outcome of the firm that was selected based on their geographic status,” said Duluth city council member Arik Forsman. “I can’t argue with their qualifications, though.”

This newest controversy comes about three years after former Mayor Emily Larson came under fire for moving the city’s tourism promotion contract to Minneapolis-based Bellmont Partners, rather than longstanding partner Visit Duluth, which had operated as the city’s tourism promoter for decades.

The city council later backed that recommendation.

 created a tourism marketing working group earlier this year to develop a request for proposals for the city’s next contract. 

At the time, Reinert said “it’s hard to tell an authentic Duluth story if you’re not a Duluthian.” He said he was hopeful that tourism tax dollars generated in Duluth would end up being directed to a firm with a local Duluth presence.

Twenty-six firms responded to the city’s request for proposals for the tourism marketing contract. Of those, five finalists were selected — three with ties to Duluth. Those companies received a five percent bonus as part of the process. 

Despite that advantage, a review committee made up of six community volunteers selected Madden Media as the clear winner in a blind scoring process.

“This process was apolitical and driven by both City of Duluth staff and community stakeholders with a broad spectrum of industry expertise,” said Tom Werner, executive director of the Duluth Airport Authority, who chaired the committee. 

“The blind scoring process further ensured impartiality and fairness of the process,” he said.

But the end result of that process frustrated many in Duluth’s business community. 

“I had sincerely hoped — and indeed anticipated — that this important work would be entrusted to one of the exceptionally talented marketing firms based here in Duluth,” wrote Matt Baumgartner, president of the Duluth Area Chamber of Commerce, in an email to the Duluth City Council. 

“It is also clear from the volume of messages I have received from our members that they too had hoped this work would be done in Duluth by one, or more, of our talented firms,” he added. 

In a presentation to the Duluth City Council last week, Madden CEO Dan Janes said his agency of around 200 employees takes a broad view of destination marketing, incorporating not only travel and tourism, but also workforce attraction and economic development.

He tried to diffuse criticism that Madden would have a conflict of interest marketing Duluth, as it also represents nearby communities who compete against Duluth for tourists, including Door County, Wis.

“If we thought there was a conflict of interest in this space, we wouldn’t have pursued the work,” Janes said, arguing that many people travel multiple times a year.

“So when I think about travel, it’s very abundant. It is not a scarce resource,” Janes said. 

Duluth City Councilor Arik Forsman acknowledged the elephant in the room, telling Janes “there’s a lot of angst about a company from Arizona taking this contract.” 

Forsman asked City Attorney Terri Lehr whether the city could face a potential lawsuit if it didn’t follow the recommendation made by the city’s tourism marketing working group. 

“I can tell you that under the case law in Minnesota, if the council does not follow the process that has been selected by the city, then that does open the city … to potential litigation,” Lehr told him. 

In a letter to the council, Marty Weintraub, founder of AimClear, a Duluth marketing firm that was a finalist for the contract, called that legal interpretation a “fear tactic,” and urged the council to table its decision. 

“The council can take its time and not make a second consecutive bad hire, becoming the municipal equivalent of the Chicago Bears hiring coaches,” Weintraub wrote. 

But in the end most council members felt compelled to follow the recommendation. Some said they were slightly appeased by wording in the contract requiring Madden to use local photographers and other talent. 

And a fresh perspective could be beneficial, acknowledged city council member Lynn Nephew. 

“I don’t think that outside perspective is always bad,” Nephew said. “And I think sometimes, as much as we want to keep the dollars here in Duluth, sometimes looking at it differently isn’t a bad thing.”

Many councilors expressed support for transitioning to a more traditional destination marketing approach in two years, headed by Visit Duluth.

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The Duluth City Council voted 8-1 Monday night to award a multimillion-dollar tourism marketing contract to a company based in Tucson, Ariz., over objections from some in the business community who wanted the city to hire a local firm.

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Duluth chooses Arizona agency over local firms to market the city to tourists

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