'CONSCIOUS UNCOUPLING.' Downtown Eau Claire Inc., a nonprofit meant to promote downtown and its businesses, has officially separated itself from the city of Eau Claire. (File photo by Andrea Paulseth)

Downtown Eau Claire Inc. – a nonprofit organization that promotes downtown businesses and activities – has officially parted ways with the City of Eau Claire.

Board members of the 22-year-old group, commonly known as DECI, have described the process as one of “conscious uncoupling” – a phase famously (or infamously) used by actress Gwyneth Paltrow to describe her divorce from musician Chris Martin. Rather than an abrupt separation, the DECI-city split has been the product of roughly a year of ongoing work that will ultimately result in a new contract between the two parties, which is expected to be in place by the end of the year.

In the meantime, Erin Klaus – DECI’s executive director – resigned from her job with the city on Friday, Nov. 8, and was hired directly by the organization’s board of directors on Wednesday, Nov. 13. At the same meeting, the board adopted a new set of bylaws to clarify the group’s independent status.

Ann Sessions, chairperson of the DECI board’s governance committee, said the group intends to maintain strong ties to the city. “We’ve always operated as a partner with the city, and that will continue,” she said at the Nov. 13 meeting.

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We’ve always operated as a partner with the city, and that will continue.

ANN SESSIONS

DECI BOARD MEMBER

Deputy City Manager Dave Solberg, who represents City Manager Stephanie Hirsch on the DECI board, is also optimistic about the redefined partnership. “I am extremely hopeful and very expectant that the city and DECI will have a positive relationship, will be partners,” he said in an interview.

DECI was incorporated in 2002, and its status has always straddled the public-private divide. It was created as – and remains – a nonprofit 501(c)(6) organization, similar to groups like the Eau Claire Area Chamber of Commerce. However, for most of its history, its executive director was a city employee who also worked as the city’s economic development director (first Mike Schatz, then his successor, Aaron White). Its employees worked out of city offices, but their positions were funded – fully or partly – by DECI. The organization in turn received funding from three sources: The city chipped in $85,000 annually; a similar amount came from downtown business owners via four special assessment districts, known as Business Improvement Districts, or BIDs; while the rest came from membership fees, event sponsorships, and event income.

(DECI’s board of directors includes representatives of a variety of downtown agencies and businesses, including Volume One: Brian Maki, Volume One’s media strategy director, is a current member, and Nick Meyer, founder and publisher, is a former member.) 

DECI’s relationship with the city was complicated, but it worked for two decades: As downtown Eau Claire gained new businesses, residents, and investments – including those that created the Pablo Center at the Confluence and revitalized two hotels – DECI was there as a catalyzing force, promoting the neighborhood and organizing events. 

Among DECI's duties is organizing and promoting downtown events, such as the annual Fall Festival, pictured.

PARKING PUZZLE

However, during the past two years, concerns over downtown parking highlighted a conflict of interest that insiders say was baked into the organization’s structure and ultimately led to its demise.

Klaus is a longtime local business owner, having founded downtown art collective Tangled Up in Hue with business partner Jamie Kyser in 2009. Not long after, Klaus joined DECI as well as the South Barstow BID, and has been involved with both organizations in various capacities since. She became a member of the DECI board right before the pandemic hit in 2020. Klaus was also the chairperson of the South Barstow BID in May 2023 when city representatives came to a BID meeting to discuss parking — specifically a plan to begin charging for on-street parking downtown. BID members asked many questions about the proposal, Klaus said, but felt answers weren’t forthcoming. They also believed their input wasn’t taken into account, she added. Ultimately, all four downtown BIDs, as well as the board of DECI itself, officially opposed the city’s parking proposal – steps that opened up a proverbial can of worms.

“It was the breaking point,” Klaus said of the parking issue. “There’s always been an underlying confusion about what role DECI was supposed to play.” While the group’s business members were largely against the paid parking plan, its executive director – at the time, Aaron White – was a city employee who was not in a position to critique city policy.

“The discussion in summer of 2023 of how to best move forward with regulating downtown parking emphasized some of the existing potential conflicts of interest.”

JAKE WRASSE

DECI BOARD MEMBER 

“A nonprofit can’t have an executive director that doesn’t respond to its board,” Klaus said. On one hand, the executive director, a city employee, was beholden to city policy; on the other, nonprofit 501(c)(6) organizations – such as DECI – have the right to lobby on policies that impact their members. However, the DECI structure prevented the group from hiring, firing, or disciplining its executive director.

DECI Board Member Jake Wrasse agreed the parking issue catalyzed the split between the city and the nonprofit group. “The discussion in summer of 2023 of how best to move forward with regulating downtown parking emphasized some of the existing potential conflicts of interest, which may not have been as noticeable when city economic development work and downtown work were really hand in glove,” he said.

Ultimately, the city pumped the brakes on the paid parking plan and agreed to conduct a new study of downtown parking, which is expected to be presented to the City Council in January. And the situation led the city to decide to hire a new DECI director: Klaus applied for the job and was hired in October 2023. But even though – unlike her predecessors — Klaus didn’t wear multiple hats with the city, she was still prohibited from directly advocating for DECI members’ viewpoints when they conflicted with city policy.

Another DECI event is the Haymarket Holiday, shown here in 2021.

PULLING APART

Over the past year, DECI created a governance and nomination committee to explore separating from the city. The BIDs also asked DECI to reduce the size of its board and to create a new memorandum of understanding with the city.

“The process over the last year has been one of distilling and clarifying DECI’s mission and service to its stakeholders and also trying to understand the proper way to move forward,” said Wrasse, who represents UW-Eau Claire on the DECI board.

Wrasse noted that downtown Eau Claire was a very different place, with different needs, when DECI was born. At that time, it was in the best interests of everyone – the city, downtown businesses, the university, and others – to attract and retain businesses downtown and to create signature events that would draw residents to the neighborhood.

But as time passed, and there was more public and private investment downtown and fewer empty storefronts, priorities for those stakeholders shifted – a change that was only exacerbated by the pandemic, Wrasse said. “I think the gulf between where the city’s economic development team needed to spend its time and where DECI needed to serve its mission and serve the downtown grew further apart,” he said. In particular, the city began to focus on economic development in areas outside of downtown.

Solberg, the deputy city manager and DECI board member, acknowledged that DECI’s ties to the city limited its flexibility, and added that it was his understanding that DECI was created under the assumption that it would eventually become a fully independent organization – much like Visit Eau Claire or the Chamber of Commerce.

The discussion of downtown parking over the past couple of years has raised the issue of what role DECI should fill: Is it a group that works to better the downtown through organizing festivals and conducting outreach and public relations, or is it an advocacy organization on behalf of businesses? This conflict, Solberg said, “really put a lot of challenges on what the businesses were expecting versus what the city employee is allowed to do.”

“DECI’s a really great organization and they do such wonderful things. I think this will help them be even stronger.”

EMILY BERGE

CITY COUNCIL PRESIDENT

MAIN STREET PATH?

Unlike similar organizations in cities such as Menomonie and Chippewa Falls, DECI has never been a member of the state’s Main Street Program, which is overseen by the Wisconsin Economic Development Corp. In fact, the rules that govern that program explicitly state that a city’s Main Street director cannot be a city employee. Klaus said DECI is interested in becoming a Main Street organization – a path that could bring potential grant funding – but will not be able to apply until late in 2025.

Eau Claire City Council President Emily Berge, who also is a member of the DECI board, called the separation a “good step” and added that she looks forward to the organization potentially joining the Main Street Program. “DECI’s a really great organization and they do such wonderful things,” Berge said. “I think this will help them be even stronger.”

DECI board members say they are ready for the hard work ahead, including finalizing the new contract with the city and shoring up the organization’s finances. For the coming year at least, its funding from the City of Eau Claire will be relatively stable: While the city’s proposed 2025 operating budget would have cut the city’s contribution to DECI from $85,000 to $50,000 during the coming year, a successful amendment approved by the City Council on Nov. 12 boosted that total to $80,000.

Despite the separation, Wrasse said he hopes public and private entities in Eau Claire don’t retreat into separate silos.“Eau Claire has become excellent at collaboration, not because collaboration is easy, straightforward, or fun, but because collaboration is worthwhile,” Wrasse said.

Learn more about Downtown Eau Claire Inc. on its website, downtowneauclaire.org.