Developer assembles land for downtown Duluth project

A&L Development is acquiring land on the lower side of East Superior Street between Lake and Second Avenue East for a potentially major downtown Duluth development.

Several tenants with relocation plans or 30-day leases in the “Corner of the Lake” building, 30-38 E. Superior St., which the developer acquired in December, have been served with a 60-day notice to vacate, said Mike Kratt, A&L’s property manager.

He confirmed on May 24 he’s negotiating with owners of Lizzard’s Art Gallery & Framing and New Moon Publishing, which have leases, to relocate their businesses.

Meanwhile, William Abalan, who has owned the Costello Block building at 22 E. Superior St. for 41 years, said A&L has offered to buy it “and it’s probably going to happen.” His family business of 53 years, Abalan’s Interior Decorating, would relocate, he said. Kratt confirmed the negotiations, cautioning “we have no deal.”

The developer already controls two other nearby parcels. A & L bought the old Strand Theater property on the block two years ago from the Duluth Economic Development Authority with the promise of creating low-income housing.

That plan hasn’t changed, Kratt said, despite the potential for the land to be part of a potentially larger development requiring the rest of the eastern end of the block.

The Electric Fetus building at 12 E. Superior St., is independently owned, and not part of A&L’s development plan.

A&L does have an interest in the 100 block of East Superior St. It bought the Muffler Clinic building at 112 E. Superior St. and that business relocated earlier this year.

“The main discussion with the Muffler Clinic is to create a gateway (to Lake Place Park and Canal Park ),” Kratt said. “The opportunity came up to acquire it; we did.”

A potential Lakewalk entrance there could serve as a bargaining chip should A&L request tax increment or other public financing for a project on the Corner of the Lake site. Kratt wouldn’t say whether his firm is negotiating with city officials.

“There may be people in our organization that are, but I really can’t discuss that,” he said. “If there’s any discussions, they would be very preliminary. We don’t even know what we’re going to build, so it’s hard to identify what the tax capacity would be for TIF (tax increment). You can’t really do one before the other to any meaningful extent.”

We’re looking at a lot of different options,” he said. “Right now we’re just trying to figure out what we’ve got there and relocate some tenants because, whatever we do, we need to relocate the tenants - whether we remodel it, or tear it down, one way or the other.

“We’ve discussed hotel, we’ve discussed housing, we’ve discussed office space, we’ve discussed condos, we’ve discussed building a parking ramp there. We’ve discussed a lot of things,” he said.

Tom Cotruvo, the city’s business developer and DEDA’s executive director, was not available for comment.

Bullseye Silkscreen & Embroidery, another tenant in the Corner of the Lake building, will move across First Avenue East to the site of the former Hip Stuff clothing store. Owners Dana Cosler and Sharon Olson bought the old white-painted brick building at 108 E. Superior St., which currently houses the Chinese Dragon Restaurant, Old Town Antiques & Books, and Petrolle’s Religious Goods. They have spent the past year remodeling the empty storefront for Bullseye in anticipation of the sale of their space to A&L.

Other tenants also are making their exit plans.

• Lizzard’s, a 14-year-old art gallery and framing shop, already has been relocated once by an A&L project. The gallery moved to the Corner of the Lake Building in 1998 when its previous location was demolished to make way for the Duluth Technology Village.

Lizzard’s owners Jeff Schmidt and Deanna Lindberg bought the business in 2003. Schmidt said the building and location were great. “We’re prepared to look for a slightly smaller space in a comparable neighborhood,” he said.

• Nancy Gruver, president of New Moon Publishing, also expressed confidence a suitable relocation plan will be reached.

• Thralow, Inc., an Internet e-tailer selling sunglasses and binoculars, and its more visible retail sunglasses outlet, Peepers, both at 30 E. Superior St., previously announced plans to build a new office/warehouse in Proctor, but ground hasn’t been broken for that project.

Bruce Duncan, caretaker of the Corner of the Lake building, said it has been in poor condition for many years, and the time is right to sell it. Despite having worked in the building over 15 years, he isn’t sentimental about its likely razing.

“It’s a building,” he said. “You put ‘em up, you tear ‘em down. The only thing that makes this building unique is the tenants.”

Duncan said a number of artists rent space in upstairs levels.

Kratt of A&L said the biggest problem with the building is its roof, which is severely damaged.

“The roof has been leaking badly for many, many years,” he said. “It can’t be repaired with the tenants in there.”

The Corner of the Lake building was previously owned by the Donald H. Schwerdt Trust. Trustee Jim Schwerdt said he bought the building in 1984. He said it actually is part of two separate buildings that were combined by the previous owner, Garon Brothers Knitting Mills.

The four-story, brick-and-stone Romanesque Revival style section was formerly known as the Wieland Block, built in 1889 as a furniture store. From 1901 to 1930 it served as the home of the Duluth News Tribune. It was designed by Duluth’s most renowned architect, Oliver Traphagen.

The two-story section’s history is both interesting and a bit mysterious. Schwerdt said he was never able to determine who built it and when, but that it replaced the Hayes Block in the early 1900s.

The Hayes Block was described as the “second and largest brick structure in Duluth,” in the 2001 book Images of America: Duluth, Minnesota.

Rutherford B. Hayes financed and owned the property in 1870, seven years before he became U.S. president, the book notes. The then-three-story building was partially demolished and rebuilt in 1906. Whether the current building is part of the original two-story structure is unknown.