Lincoln Park redevelopment takes a turn toward housing

Seventy-five-unit apartment complex with parking on much of the ground level will completely replace the former Robert’s Home Furnishings.

 

Something old, something new. 

That simple phrase encapsulates the current housing boom developing in the Lincoln Park area of Duluth.  Taking something old and turning it into new housing is, well, nothing new for Duluth, as seen by the many closed public schools that have been converted into housing units over the decades, and, more recently the conversion of the Board of Trade building. But for Lincoln Park, this re-use mentality seems to fit the neighborhood’s layout and current economic development.

“Lincoln Park has a lot of older, relatively affordable buildings and redevelopment sites that are similar, and in a city where there isn’t a ton of available land for new development, it’s one of the more obvious opportunities,” said Karl Schuettler, research director and consultant, The Northspan Group, Inc. “Around the country, other urban areas have seen a lot of redevelopment in walkable, urban environments that provide easy access to amenities like boutiques and breweries and jobs at start-ups, and Lincoln Park’s recent commercial redevelopment checks at least two of those boxes. That demand may cool off somewhat nationally amid the pandemic, but since Duluth has nearly none of this housing product, I think there’s still a market here.”

Schuettler reiterated what is basically a given across the country generally, and in Duluth specifically - housing is important for any community’s economic development. Every year, governments and organizations like Northspan crank out reports that are replete with the argument that stable, steady housing is the most important factor in and creating better outcomes for adults in future income and children in education. Homeownership remains the single most powerful vehicle of wealth creation available to American households. Housing costs are also increasing much faster than wages and inflation, so Schuettler said it’s an area that requires creative policy solutions, especially for Duluth’s changing housing environment.

“One major reason Duluth has a need for more housing units is because household size is decreasing. Families are having fewer kids, and young people are delaying marriage and childbirth more than they used to,” said Schuettler. “According to census data, Duluth had 92,811 people in 34,784 households in 1980 and 86,004 people in 36,039 households in 2018. So, even though the population isn’t growing much if at all, we need more units to house all these one and two-person households. As a millennial who currently lives alone and just bought a three-bedroom house in Duluth, I’m the poster child for this trend!”

Northspan has been involved in a few other initiatives around housing with the City of Duluth, including a study on (primarily single-family) home construction costs and co-facilitating the Mayor’s Housing Task Force that was operating late last year/early this year. Unfortunately, the city released its study right before the pandemic threw a wrench into everyone’s plans. Jason Hale, city of Duluth senior housing developer, said no one is sure what the housing market will look like a year from now, and projects are moving forward with less certainty than normal, but the wheels have been sent into motion to address the long-simmering “pent up” demand for housing.

“There are a variety of factors that have influenced the recent interest in developing housing in Lincoln Park, including national trends, low mortgage rates and developers seeking smaller markets,” said Hale. “Locally, as Lincoln Park has experienced a renaissance over the past five years and new businesses have grown and thrived, the interest in and demand for housing has increased. There has been interest in such projects in Lincoln Park, and particularly in the Craft District, for the past two or three years.”

However, added Hale, there are three primary issues that have slowed progress: 

• The limited availability of sites, high costs and developer risk aversion. While there are properties available in Lincoln Park, most of those in appropriate zone districts are smaller and close to neighboring properties, rendering projects of scale difficult and expensive. 

• Construction costs have been high for years, but with various large projects under way including the healthcare expansions and the Superior Street reconstruction, as well as preparations for the Twin Ports interchange, skilled labor was in high demand and costs for labor and materials continued to climb. 

• Finally, developers have been interested in the neighborhood, but despite the recent growth in the small business sector, most prefer not to be first to the market. In a neighborhood that hasn’t had new larger multifamily housing in decades, being the first to jump in can be risky. 

“Fortunately, the continued business growth in Lincoln Park and the lease-up success of recent projects in Duluth, along with various external factors, have encouraged developers to work hard to make projects work,” said Hale. “It just so happens that three developers at three sites have reached this conclusion at around the same time.”

Currently, there are three projects at various stages of development (pre-planning to interior demolition). One is the redevelopment of an old structure, two are demolitions with new development. Hale said the advantages of redevelopment, when it is feasible, include: preserving historic structure and character of the neighborhood, reuse of materials (reduced environmental footprint), with typically less disturbance to the neighborhood during construction, and opportunity for unique spaces that would be difficult to build new.

Along with city officials and developers, Lincoln Park’s residents and business owners have been pushing a better quality of life for the area for decades. One of those is Stephanie LaFleur, president of the Lincoln Park Business Group. Like others in the organization, LaFleur owns property and businesses in Lincoln Park and said it seemed only natural to become more involved and to work together for the betterment of the neighborhood they live and work in.

“We are a group of businesses working as a team,” said LaFleur. “These (housing) projects are great opportunities for us, and, as we are an Opportunity Zone, those tax breaks are great incentives to building (in) Lincoln Park.”

LaFleur said that, with the three cited by Hale, there are a total of four projects slated for the neighborhood: 40 market-rate apartments on the top two floors of the former Furniture 4 Less building, with retail and commercial space on the ground level; 30 apartment units in the Esmond Building (formerly known as the Seaway Hotel); a four-story, 75-unit apartment complex with parking on much of the ground level will completely replace the former Robert’s Home Furnishings; and 100 units of multifamily housing that will replace the former Kemps/Franklin Foods dairy bottling plant that closed in 2013. LaFleur said that, regardless if the housing will be mostly affordable or mixed, it will be a welcome addition to Lincoln Park, which she likens to a village.

“We believe in the Village concept,” said LaFleur. “It takes a village, and you need to be active in your village, whether it’s old or new.”