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Real estate rebounding strongly
Photo: The commercial element of the Bluestone mixed-use development near UMD is nearing completion. BusinessNorth photo
As the summer begins, several real estate plays that were sealed a year or more ago have finally entered the construction phase. Two of the largest are in downtown Duluth:
• Property previously owned by The AtWater Group at 425 W. Superior St. has transferred to maurices, which has begun demolition of the former KDLHTV building to make way for an 11-story, $50 million headquarters office building. In turn, maurices will donate its current building to the University of Minnesota Duluth, which will develop it as a downtown campus.
• An office and printing plant structure formerly occupied by Advanster Inc. and Davidson Printing is being remodeled to serve 50 Below Sales and Marketing Inc. and Lake Superior College. 50 Below will occupy 25,000 square feet. LSC will acquire space to accommodate its CNC and welding programs.
“We did not think downtown would be a place that would work for us,” LSC President Patrick Johns said in a March speech to the Greater Downtown Council. But the structure offers LSC 32,000 square feet for its programs and also provides excellent access to bus transportation plus off-street parking, he said.
Following a lengthy effort to secure financing, the $29 million plan called “The Silos of Pier B – A Resort Hotel,” seems poised to move forward later this year. It will include a resort-style hotel adjacent to Bayfront Festival Park and a marina to accommodate restaurant guests and transient boaters in the Duluth harbor. Meeting space is also part of the plan, development partners Sandy Hoff and Alex Giuliani have said.
As the Bluestone mixed-use development advances near the University of Minnesota Duluth, new commercial amenities are joining the housing element. Announced recently was the Tavern on the Hill Restaurant, which is being constructed by New London Development, owner of area Black Woods eateries.
While those developments are among the largest, there are a wide variety of others planned for this year as commercial property increasingly regains a solid post-recession footing. They include the development of lodging properties in Hibbing, Hermantown and Duluth’s Miller Hill neighborhood.
The Hermantown property, a Holiday Inn Express to be developed by Lion Hotel Group in Duluth, is part of a larger long-term real estate development, according to Adam Fulton, Hermantown’s community development director.
Under review by Hermantown’s planning commission and city council is a proposal that would establish a longterm vision for a broad area bounded by Miller Trunk Highway on the north, Maple Grove Road on the south, Haines Road on the east and Loberg Road on the west.
“This area is facing development and redevelopment pressure,” Fulton told a May public meeting. “This could be our 50-year vision.”
Hermantown hopes to establish a new zoning district that would allow a mixture of developments including retail shops, offices and residential.
“It sends a signal to the market about the kind of development the city wants,” said Josh Bergstad, city planner.
Some of the property already accommodates established businesses, most notably Sam’s Club. Other parts are ripe for redevelopment, including the former Cinema 10 theater property and the former site of Luther Chevrolet.
Proponents believe the plan – particularly the corner of Haines Road and U.S. 53 – will create a new “gateway” for the Duluth suburb, which has never had a downtown district that defines the growing city. They also want to roll out a welcome mat to potential developers.
“We’re trying to tell developers they can be comfortable in Hermantown because we know what we’re going to do. They know what will surround them,” Fulton said.
Planners hope the design, which includes landscaping requirements, will set it apart from those surrounding Miller Hill Mall, where recent and upcoming commercial developments include Panera Bread and Chipotle Mexican Grill.
In the near term, Hermantown will see two parcels developed for Kwik Trip gas and convenience stores. One will be constructed near Menard’s and the other by Sugar Maple Drive near the Super Maple Crossing development owned by Platinum Properties.
New Kwik Trip stores are being developed throughout the Twin Ports metro this summer as the La Crosse-based chain pushes its presence north. At least three, and possibly four, will be in Superior. One will be at a former BP site on U.S. 2 and 53 near the Nemadji River, another at Tower Avenue and North 28th Street, former site of KFC and Godfather’s Pizza, and a third on Belknap Street on the site formerly occupied by C’s restaurant.
Superior also will see the development of two auto parts stores, with an Auto Zone replacing a dollar-type store at 32nd and Tower Avenue and another store being constructed at the former site of Niko’s Pizza, 2002 Tower Ave.
While no plans have emerged for AtWater’s Grand Central site on Belknap Street, a low- and moderate-income housing, senior housing and market-rate housing development is planned near that site.
One of the largest potential developments in Superior’s future may be a direct-reduced iron manufacturing facility. International Metallic Corp. of Reston, Va., is looking at the Parkland industrial site as a possible location.
Two projects that are unlikely to move forward this year are a Kestrel manufacturing plant in Superior’s North End and a Kestrel assembly plant near the city’s municipal airport. Financing for those developments is yet to be secured.
Looking forward, city officials and consultant Matthew Godfrey are preparing plans to develop commercial property in Superior’s old downtown district on North Tower Avenue. It’s expected they might unveil an anchor development later this year.Previous BusinessNorth Exclusives Articles:
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