Duluth's Billion-Dollar Hospitals & the Neighborhoods Left Behind

 >> The essay below was written by Howie Hanson, and is reprinted from his blog www.howiehanson.com

Let’s not sugarcoat it.

Duluth didn’t just get two shiny new ho
spitals. We got a full-blown health care skyline. Essentia’s $900 million Vision Northland and St. Luke’s $130 million expansion have forever reshaped the East Hillside and Central Hillside neighborhoods — and not just visually. These are towering, fortress-like monuments to modern medicine, carved straight into the guts of working-class neighborhoods that never asked for any of it.

And here’s the kicker: while the hospitals keep getting bigger, the neighborhoods around them keep getting smaller. Smaller homes, smaller parking spaces, smaller voices at the table.

The Neighborhoods That Got Steamrolled

Essentia’s project devoured blocks — entire stretches of East Third Street vanished beneath steel and concrete. Some residents woke up one morning to find their street gone and a construction fence where their neighbor used to live. The same goes for St. Luke’s, which quietly stretched its footprint like ivy along East Second Street, brushing up against homes that were already holding on by a thread.

The result? Two mega-complexes that now tower over modest, older homes — homes with cracked porches, rental signs in the windows, and nowhere near the insulation to muffle 24/7 ambulance traffic. This isn’t “revitalization.” It’s domination.

And don’t talk to us about neighborhood engagement. Public meetings were held, sure. PowerPoint slides were shown. But the decisions were made long before the public had a say. This was manifest destiny in scrubs.

The Tax Dodge No One Talks About

Here’s where it stings even more: Both hospitals are nonprofits, meaning they’re largely exempt from property taxes — the very taxes that fund our city’s most basic services.

That’s right. While homeowners in the Hillside fork over rising property taxes year after year, these health care giants — with their billion-dollar balance sheets and executive salaries that’d make a hedge fund blush — skate right past the bill.

Still, they enjoy the full buffet of city services:

• Police handling behavioral health calls and ER disturbances.
• Fire and EMS rolling up in minutes for emergencies.
• Snowplows clearing access routes around the clock.
• Streets crews maintaining the public roads their patients and employees rely on.

Who pays for all that? You do. I do. The small business down the block does. But not the hospitals.

Sure, there’s something called “community benefit” reporting — where hospitals list things like charity care and health screenings as justification for their tax-free status. But let’s be honest: if you need help with your bill or want to see a doctor without insurance, good luck. The red tape is thicker than the concrete in their new parking ramps.

What Exactly Did We Get?

Yes, we got sparkling towers. Surgical robots. ICU suites that look like boutique hotel rooms. We even got a little economic jolt during construction, when cranes and dump trucks rolled through the city like a second parade route.

But did we get better care? Did our insurance premiums go down? Did access expand for the poorest among us?

Ask the people in the Hillside, who now live in the shadow of these glass palaces — who battle for parking, dodge sirens, and watch as the culture and scale of their neighborhood gets swallowed up by medical sprawl.

Ask city officials how long the math holds when the two largest employers in town sit tax-exempt on some of the most valuable real estate in the region.

Ask the next generation why their schools, parks, and roads feel shortchanged while nonprofit Goliaths get sweetheart TIF deals, utility upgrades, and downtown land handed over like birthday gifts.

Time for a Reckoning

Duluth’s health care transformation didn’t come free. It was paid for with public subsidies, neighborhood sacrifice, and long-term tax invisibility. And yet, the systems at the center of it all will proudly proclaim their commitment to the community — even as the community quietly disappears around them.

It’s time we start calling this what it is: corporate expansion cloaked in nonprofit branding, with the city footing the bill.

Because in Duluth, even charity has a parking garage.