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Details emerging about Duluth’s housing plan
Photo: Duluth has an ample supply of older row houses that tend to serve the college community and are abandoned each spring, but young professionals want something newer and nicer, housing advocates say. BusinessNorth photo
New housing will play an important role in Duluth real estate development during coming years, public sector officials hope. Some of those investments will be designed to accommodate mixed-income residents and may include small retail stores and other amenities as part of a package that helps attract and retain young professionals in the city, they say.
There are multiple challenges. One is to attract developers willing to bet there will be an adequate financial payback if they invest in Duluth neighborhoods. Another is to construct single- and multi-family structures that potential buyers can afford.
Currently, the supply of desirable housing lags demand, according to Chris Eng, the city’s director of business and economic development. In a May interview, he said local private developers haven’t stepped up in adequate numbers to fill the gap.
To ignite new housing development and rehabilitation, public money will be needed to leverage private investment, believes Rick Ball, executive director of Duluth’s Housing and Redevelopment Authority (HRA).
“Partnerships are very critical – lenders, builders, labor, employers, realtors and government. It takes all of them to respond,” he said during a May 13 speech addressing Duluth's housing dilemma. “We see ourselves as catalysts. When the private sector is not responding to some of the community’s needs, our role is to step in and jump-start things.”
Several specific developments and programs are on the table, Eng and Ball said last month, and a consultant’s plan will add depth to the mix in June.
Central High site
The Planning Commission will consider rezoning the 79-acre site formerly occupied by Central High School this month. Currently zoned institutional, a new designation will be sought that allows mixed use.
“I think the school board has been pretty clear they won't allow somebody to come in (with a school) and compete with them,” Eng said. Instead, “There might be housing and commercial. It will be similar to what Mark Lambert is doing with Bluestone Commons” near UMD, he explained. There also could be some high-density apartment buildings and medium-density townhomes. The school district's former technical center structure could be repurposed as a community center, and its commercial kitchen could serve a restaurant, Eng said.
“Our hope is that we generate some interest with a developer,” he said, noting that the school district is willing to sell the site parcel by parcel, and the project could be constructed in phases.
Its location atop the hill is a key selling point.
“It has excellent views and is close to downtown office space” and Miller Hill Mall, Eng said. Even though the site is set back from public view, “We want this area to feel like it's part of the city, not part of a gated or exclusive community, he said. “Anybody and everybody who wants to come here to shop or watch the fireworks can do so.”
If rezoning is recommended by the Planning Commission, the proposal could be reviewed by city councilors as early as July.
Another site is at the foot of Spirit Mountain near the Riverside neighborhood. Developer Brad Johnson and his partners have been acquiring lots for a future small area plan. Eng said it might include a lodging property at the base of Spirit Mountain and some recreation-based retail such as a bike store.
“If you love to mountain bike, snow board, canoe, ski, sail, kayak or paddle board, it's available right here,” he said. “By 5:15 on a Friday night, you can be on the water, on the slopes or on the trails. Brad has the right vision.”
Some multi-family residences could be part of the plan.
“It's a great vision, and with the mayor's vision for developing the St. Louis River corridor, this would be a great starting point,” Eng said. The goal is to launch some elements of the project by fall or spring.
Fifty acres near Haines and Arrowhead roads are set to be developed in a project that will offer 400 housing units. The site is considered ideal for employees of AAR and other hilltop workers.
-Thirty acres of land near Hartley Nature Center are available from the school district. If an adequate buffer is created, it could be accommodate housing and offer prime access to a natural intercity forest, Eng said.
-The Rockridge School site was rezoned for development May 12. It could be remodeled for senior citizen housing, putting the occupants' former single-family homes on the market for new residents.
-The 10-acre Morgan Park Middle School site, no longer needed by the school district, might also be suitable as a senior development.
-Ramsey Village near the West Duluth Menard's store will offer 40 new units for senior citizens.
-The Steve O'Neil Apartments on Fourth Street in Downtown Duluth will offer Section 8 and other units.
-Sites and buildings in Downtown Duluth can be rehabilitated to provide housing units, Eng said, although redevelopment costs tend to be high. Sherman Associates recently announced that type of plan for the second level of its Grizzlies building in Canal Park. It will contain 23 units.
-The Gateway Tower site in Downtown Duluth is being examined for a possible expansion that could offer 50 to 60 additional units.
Public incentives such as tax increment financing or municipal bonds may be needed by the private developers.
“I wish I could say no, but as a fully built-out city, we're looking at redevelopment sites. It's always more expensive to redevelop than to start shovel-ready at a greenfield,” Eng said.
Financing gap lingers
Newer professional jobs in Duluth are paying higher salaries than the city's traditional occupations, Ball said, but home buyers and builders may still lack sufficient income to enter the market. To assist them, HRA has launched the Build Up Duluth Program. It is designed to facilitate the construction of new homes and to help owners upgrade multi-family units.
One element of the program offers $25,000 of lot value through a 10-year forgivable loan. It features a sinking repayment obligation of 10 percent per year. The entire loan amount could be forgiven if the resident remains in the property.
Another provision offers a $25,000 forgivable loan, also with a sinking repayment obligation of 10 percent a year. It can be used as a down payment or to pay construction costs.
“We hope that’s an incentive to really bring in some new young families,” Ball said.
The program also offers incentives that encourage reinvestment by owners of multi-family units.
“We think that’s very significant, and hope it’s responsive to the needs we were talking about.” he said. “I think we are up to the challenge, and are meeting the needs we've identified.”
Program details can be found at www.buildoutduluth.com.
“There are development opportunities. Please talk to us,” Ball said.
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