MinnPost
A THOUGHTFUL APPROACH TO NEWS
in
Print
Read more at
www.minnpost.com
Tuesday, Dec. 4, 2007
By DANIEL CORRIGAN
Brighton Development has pulled out of the Portland condo project proposed for this site between South Second Street and Washington Avenue.
A condo calamity in the making?
People who want to buy condos in downtown Minneapolis are finding it difficult to get a loan because
lenders have grown wary of buildings that house residential, retail and office units.
By MOLLY PRIESMEYER
A ride down Chicago Avenue
in Minneapolis feels like a tour of
an abandoned city. Foreclosures
have decimated a 10-block area
of homes, duplexes and condos.
A few blocks away, giant “Buy
here!” banners wave in the wind
and do dances of desperation on
downtown condo facades.
Minneapolis condo owners are
getting pummeled as the subprime
mortgage saga unfolds, prices continue to fall and the glut grows.
Average condo prices for the
Twin Cities area fell more than 5
percent to $199,845 for the year
ending in November, according
to the Minneapolis Area Asso-
ciation of Realtors, while singlefamily home prices dropped 1.6
percent to $273, 515.
But there’s an irony in the
decline in condo prices and the
rise in the number of units on the
market: People who want to buy
them are finding it increasingly
difficult to get a loan.
Lenders are much warier of
so-called mixed-use dwellings –
buildings that house residential,
retail and office units – and buildings that include both owneroccupied and rental units. Even
strictly residential buildings with
as little as 10 percent in rentals are
considered risky to lenders.
continued on page 5
INSIDE
Jazz meets poetry
Jazz drummer Matt
Wilson says Carl Sandburg’s “Jazz Fantasia”
led him to conclude that
the poet was a “serious
hipster” and definitely
deserving of more
recognition. This Friday, Wilson’s tribute
comes to Minneapolis. page 4
MINNPOST.WORLD
As 190 nations negotiate
replacing the Kyoto agreement, Australia isolates the
U.S. when its prime minister
signed papers ratifying the
pact. page 2
COMMUNITY VOICES
Minnesotan still waiting for
payoff from cuts-and-gimfederal court has doubled in
micks budget approach.
the past five years. page 6
page 8
RON WAY Iron Range
DAVID HAWLEY “Christenvironment good for the
mas Carol” – a cash cow
economy. page 6
through the ages. page 3
SHARON SCHMICKLE
JUDITH YATES BORGER Science and politics?
In Minnesota, cases filed in
page 7
MinnPost in Print, published weekdays at lunchtime, contains highlights of MinnPost.com –
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She voraciously read and argued the news every day of her life.
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MinnPost in Print
A THOUGHTFUL APPROACH TO NEWS
Tuesday, Dec. 4, 2007 • www.MinnPost.com
PAGE 2
MINNPOST.WORLD
And then there was one
U.S. stands alone at U.N. conference on greenhouse gases
By SUSAN ALBRIGHT
First there were two, and now
there is one – one outlier in the
world’s effort to curb global climate change. It just happens to be
the biggest emitter of greenhouse
gases in the world, and it happens
to be us. Australia, the only other
industrial naysayer of the Kyoto
Protocol, left the United States
isolated on Monday when its
new prime minister, Kevin Rudd,
signed papers ratifying the pact.
Rudd’s first official act elicited applause in Bali, where a
major United Nations conference
of nearly 190 nations began this
week in an effort to negotiate
a route to replacing the Kyoto
agreement. The pact will expire
in 2012, and delegates will try to
have a framework for a broader
effort in place by 2009. Momentum has seemed inevitable since
the blockbuster United Nations’
Intergovernmental Panel on Climate Change (IPPC) report came
out this fall to set the stage for the
Bali conference (and win a Nobel
Prize in the process). Yet even as
the scientists’ blunt conclusions
– that global warming not only
exists but that human activity is
very likely causing it – sank in,
few seemed to think the United
States will move beyond its support for voluntary, not mandatory, emission cuts. Nor do many
think fast-developing nations like
China will do much more than
press for stiffer cuts for the most
industrialized nations.
Still, it is human nature to
hope for a more unified approach
next time around. Malini Mehra,
a BBC commentator from India,
points out that we are imperiled
“as a species, not as nationalities,” and calls for the articulation of “a new global ethics and
a politics of the possible” to
drive change. Opening words at
the conference sounded similar
themes, and some have predicted
a somewhat more positive China,
By SUPRI SUPRI, REUTERS
The executive secretary of the United Nations Framework Convention on Climate Change, Yvo de Boer, delivers a
speech during the opening session of a major U.N. conference in Bali on Monday. About 190 nations are meeting
to sharpen the fight against climate change.
the world’s second-biggest carbon emitter, than has been seen
in the past.
Geoffrey York, reporting for
the Toronto Globe and Mail
in Beijing, wrote that “China
is much more keenly aware of
how global warming is inflicting heavy damage on its own
economy. Recent studies have
warned, for example, that China’s rice harvest could plunge
by 37 percent by the second half
of this century if global warming continues. It would also face
increasing droughts and water
shortages if nothing is done.”
He added: “China’s real interest
in Bali, however, is to persuade
Western countries to transfer
their environmental technology
to China as cheaply as possible.
Beijing repeatedly makes the argument that the foreign technolo-
gy would allow China to achieve
its environmental goals much
faster. To ensure a cheap price,
the West should stop insisting on
protecting the intellectual property rights of this technology,
China says.”
Tough talks ahead
Of course each nation will
press its own perspective. For example, David Fogarty, writing for
Reuters, observed that governments’ opening remarks “hinted
at tough talks ahead. China insisted rich countries cut their greenhouse gas emissions by 25 to 40
percent by 2020, while Japan
said China’s active participation
in a new climate deal was ‘essential.’” Meanwhile, deforestation, technology transfers and the
relative responsibilities of poorer
developing nations will be major
topics of discussion, predicts a
Reuters backgrounder.
Perhaps the best hope for
success lies in the combination
of stark realities laid out in the
IPCC report and the publicity
generated both by the report and
the Nobel Prize bestowed on its
scientists and Al Gore. “The eyes
of the world are upon you. There
is a huge responsibility for Bali
to deliver,” conference leader
Yvo de Boer told delegates. “The
world now expects a quantum
leap forward.”
Susan Albright, a former editor of
the Star Tribune’s editorial pages,
writes about national and foreign
developments.
MinnPost in Print
A THOUGHTFUL APPROACH TO NEWS
Tuesday, Dec. 4, 2007 • www.MinnPost.com
PAGE 3
Even Dickens viewed ‘A Christmas Carol’ as a cash cow
DAVID HAWLEY
More than 30 years
ago, a young literary
manager at the Guthrie
Theater was handed an assignment to work up an adaptation
of the beloved Charles Dickens
novella, “A Christmas Carol,” for
a simple, money-making show.
In her research, Barbara Field
learned that Dickens also had written the fable as a money-maker and
that he later exploited its success by
touring with dramatic recitations of
the story. So she decided to frame
her adaptation with Dickens feverishly writing his book while his
family nags him on Christmas Eve.
Dickens then reads his first draft to
the audience, falling into the role
of narrator as the story unfolds on
stage. The tale ends in time to serve
Mrs. Dickens’ plum pudding.
Field had the same experience
as Dickens did with “A Christmas
Carol” – namely, astonishing
success. The Guthrie is currently
staging its 33rd annual production, and Field’s adaptation has
received annual productions at
theaters in Louisville, Kansas
City, Chicago and elsewhere.
It’s the God-bless-us-everyone equivalent of a cash cow.
Over the years, I’ve seen about
a third of the Guthrie’s productions, starting with the second one
in 1976. Theater is a collaborative art, so it’s not surprising that
every production had its share of
tweaks. But it had been at least
a decade since I’d seen the show
when I attended a matinee perfor-
mance during the recent Thanksgiving weekend – and discovered
that a lot more than tweaking has
been going on.
‘Kill the elves’
Seven years ago, when Gary
Gisselman began his reign as the
show’s director, he called Field
to talk about the script. “The
first thing I said was, ‘Kill the
elves,’ ” Field recalls, referring
to sprites that had apparently
migrated into the show, like escapees from a production of “A
Midsummer Night’s Dream.”
Field and Gisselman, both seasoned veterans of the local theater
scene, established a close rapport.
The result, they say, is a show that
somehow has evolved into a blend
of an annual work in progress and
a reunion of professionals – such
as music director Anita Ruth and
choreographer Myron Johnson –
who have a long history of working together.
Gisselman says he approaches
the production the same way
every year.
“In June I look at the archive
tape we made during the last
rehearsal of the previous year,” he
said. “I slap myself and say, ‘What
was I thinking?’ and then I call Barbara and we go over the script.”
What has changed? Well,
Dickens and his family are gone
and the narration is now handled
by members of the acting ensemble – something Gisselman
credits to seeing a production of
the daylong version of “Nicholas
Nickleby” several decades ago.
“A Christmas Carol” by Charles Dickens, adapted by Barbara Field
• Guthrie Theater, directed by Gary Gisselman
• 7:30 p.m. Tuesdays-Sundays through Dec. 29. Matinees on
selected Wednesdays, Saturdays and Sundays.
• $64-$29. Call 612-377-2224 or 877-44-STAGE or order online.
www.guthrietheater.org/
“We’ve tried to make it a piece
of theater rather than literature
put into theater,” he said.
More material has been mined
from the book and from other
sources to offer further background on the life of Ebenezer
Scrooge. Some of it is from the
Dickens novella, but some isn’t.
For instance, a flogging scene
to show the misery of Scrooge’s
youth is out of “David Copperfield.” And scenes with a young
Jacob Marley, including the
downfall of their kindly master
Old Fezziwig, were inspired by
scenes in the 1951 British film
version of the story that starred
Alastair Sim.
The changes are not all addi-
tions. In this year’s version, the
second-act scenes in the Cratchit
hovel and at nephew Fred’s
Christmas-day party have been
merged into overlapping and contrasting tableaus. Nip and tucks
abound.
Some things aren’t so good.
The “new” set dates from the
last time I saw the show in the
1990s, when John Gielgud’s
recorded, disembodied voice
opened the narration in an effect
that was altogether unnecessary.
The set, equally unnecessary, is
an unremarkable paneled thing,
like the interior wall of a British
gentleman’s club.
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A THOUGHTFUL APPROACH TO NEWS
Tuesday, Dec. 4, 2007 • www.MinnPost.com
PAGE 4
Jazz meets poetry in Carl Sandburg Project
By PAMELA ESPELAND
Poetry and jazz are natural partners. Poets write poems
about jazz, poems shaped by the
sound and feel of jazz, and poems
meant to be read aloud to jazz accompaniment.
Lawrence Ferlinghetti collaborated with tenor saxophonist Stan Getz. Jazz artists write
music for poetry; pianist and
composer Fred Hersch set parts
of Walt Whitman’s “Leaves of
Grass” to elegant, beautiful music, and trombonist Craig Harris
has written a musical interpretation of James Weldon Johnson’s
poetry collection titled “God’s
Trombones.”
Poetry and jazz met in the
proto-rap recordings of Gil
Scott-Heron (“The revolution
will not be televised”), and they
meet every Monday at the Artists’ Quarter in St. Paul for Open
Poetry night. Some jazz singers (Jon Hendricks, Kurt Elling)
write poetic lyrics to instrumental jazz tunes.
Personal ties to poet
As a child, jazz drummer
Matt Wilson discovered he had
personal ties to Pulitzer Prizewinning poet Carl Sandburg.
Both have roots in west-central
Illinois. Wilson’s great aunt
was married to Sandburg’s first
cousin, Charlie Krans; Sandburg
stopped by the Krans farm in
Galesburg, his own hometown,
in 1953 and documented his visit
for Life magazine (“I Went Back
to Galesburg,” Feb. 23, 1953).
Studying to be a musician,
Wilson discovered a poem by
Sandburg called “Jazz Fantasia”
that reads in part:
Go to it, O jazzmen … bang
altogether drums, traps, banjoes,
horns, tin cans – make two people fight on top of a stairway and
scratch each other’s eyes in a
clinch tumbling down the stairs.
Those words could get a
young jazz artist’s blood going.
To Wilson, the poem “solidified
my notions that Carl was indeed
a serious hipster. I mean, he had
the best hair. I feel he has not
been given the recognition he so
deserves. Whitman was cool, but
Carl rocked! Plus he dug jazz.”
Liberated from limitations
Something else jazz artists
appreciate is freedom. Wilson
liked that Sandburg’s style was
“free of rhyme, free of meter, and
free from the governing rules of
verse.” It is also free of pompous or arcane verbiage. Sandburg
used the ordinary language he
heard every day, what he termed
the “American lingo.”
He often mixed poetry and
music in his public performances, and so does Wilson. The Carl
Sandburg Project, which comes
to the Minnesota Opera Center
on Friday, Dec. 7, is both homage and opportunity for Wilson
to stretch his own considerable
limits of performance, composition and improvisation.
Commissioned by Chamber
Music America, presented here
by Jazz is NOW! with the Minnesota Opera, the project has toured
on and off since 2002. Bill Ribas
described it as “eccentric, full of
laughs and good-spirited fun.”
I asked Wilson what that
meant, since most people don’t
equate jazz with laughs or po-
etry with fun, or the other way
around.
“It will make you laugh as
well as cry,” he explained. “It
rocks, it soothes. It is a multisensory production. Music should
be fun, right? We’ll have fun and
you’ll have fun.”
Embracing the poetry
The project features Jeff
Lederer on saxophone, Ben Allison on bass, Dawn Thomson on
voice and guitar, and Wilson on
drums. “We move through a wide
range of sonic landscapes and
embrace the poetry through song,
readings and as inspiration for
the pieces,” Wilson said. “I have
some new pieces that I am anxious to debut, including a groovy
song set to ‘We Must Be Polite,’
a poem instructing children on
how to behave when they meet
a gorilla or if an elephant knocks
on their door.”
Will we hear Carl Sandburg
read his poetry? “I do a piece with
Mr. Sandburg reading ‘Fog,’ ” he
replied. That’s the Sandburg poem
most of us learned in grade school
because it’s short. Will the music
be dense and humid, or lithe and
catlike? With Wilson, you never
know until it happens. Even he
isn’t sure. “It is improvised music,
so it is always changing. We never
play it the same way once.”
Wilson was smitten by the
drums in third grade, when he
saw Buddy Rich on an episode of
“Here’s Lucy.” Today Wilson is
“easily one of the best drummers
of his generation,” according to
a New York Times review. The
DownBeat critics’ poll named
him Rising Star Drummer four
years in a row. He’s been called
Matt Wilson’s
Carl Sandburg Project
• The Minnesota Opera
Center, 620 N. First St.,
Minneapolis
• 8 p.m. Friday, Dec. 7
• $15 advance/door. Call the
Minnesota Opera’s ticket
office at 612-333-6669 or
buy at www.mnopera.org
smart, wacky and weird. He
wears goofy hats and wigs.
A Matt Wilson performance is
always entertaining and musically enlightening. His most recent
Twin Cities gig was a two-night
stay at the Dakota in January of
this year, where he had us singing
along to “Feel the Sway.” It’s a
catchy tune from “Scenic Route,”
his latest CD with his Arts and
Crafts group and his seventh as
a leader; he has recorded dozens more as a sideman. There
are plans to record the Project’s
performance in Minneapolis and
perhaps release it later.
Because this is a joint presentation with the Minnesota
Opera, the Project will have an
opening act: singer Christopher
Job, a bass in residence during the Opera’s 2007–08 season
with upcoming roles in “Romeo
et Juliette” and “The Fortunes of
King Croesus.” When Job sang
in “L’Orfeo ed Euridice” with
the Glimmerglass Opera of New
York, he was praised for his “nifty comic work.” Sounds like he’ll
fit right in.
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A THOUGHTFUL APPROACH TO NEWS
Tuesday, Dec. 4, 2007 • www.MinnPost.com
PAGE 5
Another condo calamity in the making?
continued from page 1
All of this is hitting the downtown Minneapolis condo market
especially hard because 10 of the
14 major residential developments
with active, city-approved permits
are all mixed-use projects.
Minneapolis now has a fouryear stock of condos, or almost
five times the current inventory
of new and existing single-family homes, according to a recent
report by Metrostudy, a housing
market-research firm. The 13county Twin Cities area is suffering from serious condo overdose as well: There are 4,608
brand-new condos on the market
and more than 3,000 previously
owned units for sale, according
to Metrostudy. That adds up to a
30.8-month supply of condos for
the entire area.
The new loan gymnastics
Given the current slump, expensive condos will likely wind
up empty for a while. Even if you
could afford to snatch up one of
the thousands of vacant spaces
(just 49 of the 1,044 brand-new
condos on the market in November were under $150,000), according to the Minneapolis Association of Area Realtors Housing
Outlook report, the new requirements make it such that you’d
have to perform various acrobatic
acts just to get approved.
Take, for instance, my friend
31-year-old Sam Osterhout, who
has a credit score of 780 (in a
range of 330 to 830, that’s seriously excellent), a well-paying
full-time gig, and was willing
to put down around 37 percent
of his condo’s value. He simply
wanted to move into an ubermodern window-filled condo on
Washington Avenue that smells
like fresh paint and new shoes.
His loan process, which began
in mid-August, became such a
hassle that his first mortgage consultant quit, saying he couldn’t
find a single lender in town who
could guarantee a closing.
So why were banks turning
away such a stellar candidate as
Osterhout?
Because Osterhout was buy-
ing into a downtown Minneapolis condo building that is zoned
60 percent commercial and 40
percent residential. Even Osterhout’s wad of cash and payment
history couldn’t keep banks from
running from him like emus under attack.
Condo sellers aren’t faring
much better. Paul Stepnes spent
more than $500,000 restoring a
building overlooking Lake Calhoun. He turned the duplex into
two high-end condos, replete with
modern amenities like heated underground garages, hand-carved
fireplaces, crown moldings, and
granite countertops. The works.
The pristine condos, reduced
since they first went on the market by as much as $200,000, have
been sitting vacant for more than
a year. “We’re going to have to
sell them at a loss; we do realize
that,” says Stepnes, whose rehab
work has appeared in magazines
like Midwest Home. “What else
can you do? They’re at a great
price. It doesn’t make sense.”
As for Osterhout, he eventually snagged a loan through
Wells Fargo in early October, but
only after he delivered 10-grand
in earnest money and endured
three different closings that were
all met with more questions and
lender reluctance.
“Did Wells Fargo open last
week?” Osterhout jokes. “If the
mortgage companies continue
with this caution, buyers like
me will opt out of the market – I
was two hours from doing so –
and we’ll find ourselves with an
insurmountable glut of empty
properties and no one willing to
finance them.”
The ‘warrantability’ factor
The steep decline in the condo
market has to do with a whole
mess of factors including appraisal rules, condo saturation,
developer saturation and something called “warrantability,” the
criteria lenders use to determine
a condo’s loan-risk factor.
According to Vince Hunt, a senior mortgage consultant at Lakeland Mortgage in St. Paul, it’s especially difficult to secure a condo
loan in mixed-use developments.
For lenders, these condo buildings must pass “warrantability.”
Ronny Loew, a mortgage banker
and equity strategist at First Horizon Home Loans in Edina, says if
a condo building is warrantable,
it has passed certain thresholds
that lower the loan risk, like having more owner-occupied units
than renter-occupied.
Buildings with even as little
as 10 percent in rentals are considered risky. Yet in an effort to
not eat dirt, many developers are
turning those could-be condos
into rentals. The result? Further
exacerbation of the condo glut.
It’s worse for condo owners
trying to sell: “A building that
has more than 15 to 20 percent
commercial-use is also higherrisk because of the number of
businesses that fail,” Loew says.
Put another way, you’re considered more of a loan risk if you
have what “could” amount to
lousy neighbors.
Investors and other problem
neighbors
Yet another neighbor issue is
compounding the condo problem. Unlike with single-family
homes, which have a wider reach
when it comes to appraisals,
condo owners are at the mercy of
their next-door neighbors’ home
value. If a neighbor is forced into
foreclosure or has to sell quickly,
it affects the price of every condo
in the building. And foreclosures
show no sign of abating any time
soon. In the third quarter, there
were 2,363 foreclosures in Hennepin and Ramsey counties, according to RealtyTrac. That’s a
102 percent increase from the
same time last year.
Add investor concentration —
where investors still own a large
share of the units — to the volatile mix of cut-and-run neighbors,
appraisal rules and increasing
rentals, and the problem swells.
“Investors still have control of
so many buildings,” Hunt says.
“That makes it much harder for
owners to sell.”
So, how many condos “sold”
in the Twin Cities currently are
investor-owned? That’s the million-dollar question. “There’s
no way we can know that,” says
Ryan Jones, the Twin Cities
director of Metrostudy. “That’s
a national question. Everyone
wants to know that.”
Developers pulling out
In 1998, the Minneapolis
riverfront’s affinity for condos
spilled into all downtown neighborhoods. It started with renovations in the Historic Milling District, led by the North Star Lofts
on Portland Avenue and Second
Street and expanding to the Stone
Arch Lofts and Washburn Lofts,
all projects from Brighton Development.
Fast-forward to nearly a decade later, and Brighton Development has pulled out of two
major downtown condo projects:
Washington Live-Work and the
Portland. The condos at the highly touted mixed-use Two Twenty
Two, which will house the downtown Minneapolis Whole Foods
at the former Jaguar dealership
on Washington, are all but dead.
The Bridges in St. Paul is still a
dream on paper. Mozaic, the major Uptown mixed-use building
with condos starting at $250,000,
has yet to break ground in Minneapolis. And the Nicollet on the
Mall, another mixed-use project,
which was supposed to become
the city’s largest residential trophy, is dying on the vine.
According to Matt Mullins
at Maxfield Research, a Twin
Cities real-estate research company, Mozaic has sold only 71
units, less than 50 percent of
the proposed spaces. Unlike the
condo heyday of two years ago,
when developers were granted
construction loans with only 35
percent of the units in purchase
agreements, lenders today require at as much as 65 percent
pre-sold.
Read the complete story
online at www.minnpost.com.
Molly Priesmeyer writes about
real estate, veterans and arts for
MinnPost. She can be reached at
[email protected].
MinnPost in Print
A THOUGHTFUL APPROACH TO NEWS
Tuesday, Dec. 4, 2007 • www.MinnPost.com
PAGE 6
State’s federal courts loaded with cases
JUDITH YATES BORGER
We live in a litigious state. And
it’s getting more so.
In the past five years the
number of cases filed in federal court here
has just about doubled to 5,320. The Minnesota federal court is No. 2 of 94 districts in
weighted caseload per federal judge, according to federal government reports.
Why is that?
Chief District Judge James Rosenbaum
says the high concentration of highly technical companies such as Medtronic, St. Jude
Medical and 3M in Minnesota begets many
patent lawsuits. The government statistics
give more weight to intellectual property
cases because they are complex and often
take longer to try.
“Cases are aggressively sought and
defended,” he said. “It’s a very sophisticated
case load.”
And, we don’t have as many judgeships
as other comparable states. With a population of about 5 million people, Minnesota
has seven judgeships. Louisiana, with 4.5
million people has 23 judgeships.
There are 94 U.S. district courts. Some
states, such as Alaska and Minnesota, have
of a single judicial district. Others are composed of multiple judicial districts. Louisiana has three judicial districts. New York
and California each have four.
Minnesota could have had more judges.
In the early 1990s the state was scheduled to
get a new judgeship but turned it down. “It
didn’t look like we needed one,” Rosenbaum
said. But that was before the surge in cases.
Rosenbaum couldn’t say why there are so
many more cases. “I don’t control my own
case load,” he said. “People come in and they
file.”
Slow to hear cases
District court judges are nominated by the
president and confirmed by the Senate. The
names of potential nominees often are generally recommended by senators. According to
the federal courts website www.uscourts.gov,
the number of weighted filings per judgeship
is the key factor in determining when an additional judgeship will be requested.
Minnesota’s statistics argue for more
judges, but Rosenbaum was loath to predict
when Minnesota might get another judgeship.
Meanwhile, our fair district is 93rd
slowest of 94 when it comes to getting cases
heard, the study says.
Rosenbaum argues that number is not
representative of what’s really going on
because Minnesota is the home for one case
which has been in the courts for four years
and had 14,000 filings from claims across
the country. That number is down to 6,000
now, but still shows up as many cases more
than three years old.
But the report is accurate when it says
Minnesota federal judges have the second
heaviest load in the nation, he said.
On Iron Range, good environment good for economy
RON WAY
Ever since the mid
1800s when gold
prospectors saw their
compasses spin as they stood
atop broad ore bodies that would
became Minnesota’s famous Iron
Range, mining has been seen as
the region’s economic backbone.
To this day, mining for iron
and perhaps soon for copper
and nickel is described by many
as the economic salvation of
everyone north of Cotton, Minn.
Environmental advocates are often viewed as a lurking Grinch,
forever working to deny locals a
place in the economic sunshine.
But a new study shows that
northeast Minnesota’s economy
is humming despite the loss of
thousands of mining jobs since the
1980s. The Arrowhead is buoyed
by the in-migration of retirees
who like the beauty of the place
and by year-around tourism.
The new residents and visitors
spend impressively on pursuits
like canoeing, boating, fishing,
golf, skiing, hiking and snowmobiling. In addition, they create jobs
by outfitters, resorters, and even
health services for the elderly.
In fact, the 20-year jobs
decline in mining has been more
than offset by jobs and overall
economic growth in the service industry, says a report by
Thomas Michael Power of the
University of Montana.
“Natural environment –
scenic beauty, wildlife, outdoor
recreation, clean air and water
– attract people and economic
activity,” said Power in his report. “Such amenity-supported
economic vitality is a powerful
force in many areas of the nation
including Minnesota’s St. Louis,
Itasca, and Lake Counties.”
The boom-bust cycle went
dramatically bust in the 1980s;
St. Louis County alone lost 9,000
jobs, a staggering 76 percent of
the mining work force along with
their wages of $503 million.
Other sectors added 25,000
jobs and $940 million, said Power
in a report for the Minnesota Center for Environmental Advocacy
and the Sierra Club.
For years, a healthy economy
and a quality environment have
been regarded as mutually exclusive, and the cleavage has been
especially pronounced on the Iron
Range. The early 1900s saw fights
between those wanting to protect
what is now the Boundary Waters
Canoe Area (BWCA) from a plan
to use vast areas for hydropower
to run paper and timbering operations. They also turned back a plan
to carve roads into what is now
wilderness for resorts and cabins
that would pack the shorelines.
Past battles
In the 1970s there were three
divisive fights:
When a surging metals market
gave promise to cooper-nickel
mining across the north country’s
greenstone formations, public
meetings in Ely and elsewhere
nearly came to blows as environmental advocates pointed to
the lunar landscapes of Sudbury,
Ontario, caused by the caustic
plumes of copper smelters.
Then came the controversy
over Reserve Mining Company’s
discharge of taconite tailings
directly into Lake Superior. Anyone siding against Reserve in the
company town of Silver Bay had
a short half-life.
Later came bitter knock-downs
over federal legislation to designate the BWCA as wilderness, and
the wounds haven’t yet healed.
One politician, Don Fraser, was
denied the governorship when
Iron Range DFLers balked over
his support for the BWCA and
expanded gun control.
However, a fickle metals market
kept copper-nickel mining from
happening and eventually shut
down Reserve, Congress approved
the wilderness bill, and in the
1980s another market bust saw tens
of thousands of taconite jobs lost.
Despite jobs losses in the
extraction industry, Power’s
report says northeast Minnesota’s
diversified economy has enjoyed
impressive growth, and between
1990 and 2005 the rate of jobs
growth in Itasca and Lake counties outpaced the state as a whole.
“The reality of amenitysupported economic development
underlines the economic importance
of protecting quality of the social
and natural environment,” the report
says. “Environmental quality is not
just a matter of ‘prettiness’ or aesthetic preferences; it is a central part
of any region’s economic base and
its potential for economic vitality.”
MinnPost in Print
A THOUGHTFUL APPROACH TO NEWS
Tuesday, Dec. 4, 2007 • www.MinnPost.com
PAGE 7
What would a Nobel scientist ask the Senate candidates?
SHARON SCHMICKLE
Minnesotans could have taken a
potent dose of science along with
their politics had Nobel Laureate
Peter Agre run for a U.S. Senate seat in the
state this year. Agre, who shared the Nobel
Prize for Chemistry in 2003, considered running then decided against it.
In a bid to salvage that element of the political discourse, I asked Agre to list sciencerelated issues voters should keep in mind as
they evaluate candidates in 2008.
Education is one prominent issue worrying Agre and a host of other scientists. Many
of them were inspired and trained during
the Cold War when the so-called space race
engaged Americans from the White House to
the living room. In a recent headline observing the 50th anniversary of the launching of
the satellite Sputnik, The New York Times
noted that “science suddenly mattered in
space and in class.”
Now, though, the nation seems willing to
accept mediocrity in science education. As a
result, a new generation of Americans may
lack the skills to compete in the global marketplace, said the nonpartisan organization
Scientists and Engineers for America, where
Agre is on the board of directors.
“In the 2005 National Assessment of
Educational Progress, almost half of all
12th graders scored below the basic level of
proficiency in science,” the organization said
in a call for more scientists to run for public
office. “In international standardized tests,
high school students fall below international
averages in mathematics literacy and problem solving.”
No candidate would take a stand against
education. Still, many have managed to malign the public schools in their campaigns,
said Agre, who graduated from Roosevelt
High School and Augsburg College in Minneapolis. And public schools remain the
most ready vehicle for delivering science
and math education to the broadest range of
students.
Voters should not let candidates get by
with “weakly or superficially” supporting
public education in general and failing to
address urgent needs for stepped up science
education, said Agre, who works as vice
chancellor for science and technology at
Duke University in North Carolina.
Science and politics
Another issue on Agre’s list – availability
of health care – is prominent in one form or
another on almost every candidate’s slate.
Agre adds a scientist’s twist. Ask the candidates, he suggests, what role the Institute
of Medicine at the National Academy of
Sciences should play in shaping health care
policy. Because most elected officials have
negligible backgrounds in medicine and science, they often rely on the expertise of selfserving lobbyists, he said. And important
decisions often are based on ideology and
political rhetoric rather than science-based
advice from leading national experts at the
non-partisan institute.
When it comes to environmental issues, Agre urges voters to think in personal
terms and grill candidates on the stakes
for Minnesota’s beloved parks, lakes and
wilderness areas. He’s paddled and portaged
more than his share of terrain in the Boundary Waters Canoe Area Wilderness. Global
climate change and other environmental
problems are diminishing Minnesota’s
natural resources, he said, and voters should
expect candidates to address specifics of
the problems in close-to-home terms. What
do they say, for example, about prospects
for a decline in lake trout because of rising
temperatures in northern lakes?
Energy will be part of the debate, Agre
said, and voters shouldn’t settle for bromides
and easy answers to the complex problems.
The nation is overdue for a scientific assessment of the true costs of energy to the
environment.
“While carbon tax often is mentioned
by candidates, where will they begin?” he
asked. “How can they reduce the gridlock
and over use of highways without the specter
of ‘big brother is watching’?”
Of course, there is a bottom line question too. Funding is critical for K-12 science
education and for research, Agre said.
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MinnPost in Print
A THOUGHTFUL APPROACH TO NEWS
Tuesday, Dec. 4, 2007 • www.MinnPost.com
PAGE 8
COMMUNITY VOICES
Minnesotan waiting for payoff from cuts-and-gimmicks budget approach
By DANE SMITH
For a decade now, Minnesota has pursued
a risky fiscal experiment.
It began in 1999 with large and permanent
tax cuts mostly for top-tier households, and
continued with deep budget cuts and disinvestment in our once highly regarded education, transportation and health-care systems.
The latest forecast of a $373 million revenue shortfall – on top of mounting evidence
that the state’s economy is underperforming the national average for the first time in
decades – strongly suggests that this fiscal
gamble was unwise.
Let’s review some fiscal history.
A Republican governor in the early 1980s
and another Republican governor in the early
1990s addressed large budget shortfalls with
some trimming but also reasonable tax increases. They understood that Minnesota’s
tradition of strong investment in education
and other essentials that enhance the common good actually helped create broader
prosperity. (Every living former governor, by
the way, and their finance commissioners, has
expressed public disapproval of our current
fiscal course.)
And in each of those previous decades,
Minnesota went on to enjoy robust economic
growth, personal income growth above the
national average and long consecutive streaks
of annual budget surpluses.
This decade was ushered in by historically
large, permanent income-tax cuts (at both the
state and federal level), benefiting primarily
high-income families, and a cuts-and-gimmicks approach to budget-balancing when
the inevitable periodic recession hit in 2001.
We have been told repeatedly by anti-government ideologues that this strategy would
create more jobs, better economic conditions
for all, and even a supply-side gusher of state
revenue.
We’re still waiting.
Where’d all the surpluses go?
Compared to at least seven successive
November surpluses in the 1990s, Minnesota
got exactly two years of projected surpluses
in this decade, and an economic “recovery”
that provided little gain for middle-income
and low-income households, before the ink
turned red again. And even the surpluses were
tainted by the fact that the state, also early in
The Interstate 35W bridge collapse has focused attention on
an already-established consensus that Minnesota is 20 years
behind in transportation and transit investment.
the decade, stopped accounting for inflation
in its spending estimates.
On one set of statistics, the tax-cutters and
government-squeezers got what they wanted.
We did get out of perennial Top Ten rankings that were presumed, falsely it turns out,
to be bad for business. Over the last decade,
Minnesota plummeted from around 10th in
state-and-local taxes and spending as a percentage of income, to a very un-Minnesotan
23rd in taxes and 31st in spending. And the
current total size of our public sector, according to the official Price of Government
measure of total spending as a percentage of
income, is about 6 percent smaller in 2007
than in 1997.
And certainly there was at least a temporary benefit from these policies for some
Minnesotans over the last decade. As a result
of the income tax cuts, Minnesotans with
disproportionately high-income households
have paid about $7 billion less in income taxes since 1999. Statistics provided by the nonpartisan Senate Counsel, Research and Fiscal
Analysis office show that in 2007 almost 60
percent of those tax savings went to about 15
percent of households whose income exceeds
$100,000.
Tax burden increasingly shifting
to middle- and low-income families
But here’s the underside of that “benefit”:
The Interstate 35W bridge collapse has
focused attention on an already-established
consensus that Minnesota is 20 years behind
in transportation and transit investment. Tens
of thousands of children in the last five years
have lost health-care coverage under the MinnesotaCare plan for working families. Cuts to
state colleges and soaring tuition have raised
barriers to higher-education attainment, a key
ingredient of economic growth. The hard
line on state taxes has forced dramatic increases in property taxes and fees, which are
disproportionately burdensome for middleand low-income families.
Few would argue that high levels of public
Courtesy of GROWTH & JUSTICE
Dane Smith is president of Growth & Justice.
spending and taxation, by themselves, will
guarantee a competitive economic advantage.
Government spending must be constantly examined and re-examined to ensure that it is
spent wisely and with an investment mindset,
focusing on what really works toward improving lives and economic conditions.
And the numbers suggest that a vigorous
return to public investment mode is in order,
in education, transportation, public health and
environmental protection. At the very least,
the current shortfall must not be addressed
with further erosion of the public investment
tradition that has made Minnesota among the
healthiest, wealthiest and wisest of states.
Dane Smith is the president of Growth &
Justice, a think tank that focuses on state
economic issues.
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