Woodland, Enbridge projects win DEDA subsidies

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Student housing developer Mark Lambert plans to create a student housing complex at the Woodland Middle School site which will include restaurant and retail space. (File / News Tribune)

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The Duluth Economic Development Authority agreed to lend financial support to a couple of large development projects Wednesday night.

It authorized up to a $350,000 conditional grant to A&L Duluth Renaissance LLC so the firm can redevelop three commercial buildings in downtown Duluth to create a regional headquarters for Enbridge Energy Partners LP.

And commissioners approved creating a new 26-year tax-increment financing district that would provide up to $9.9 million plus compound interest of 6 percent for Bluestone Commons LLC to redevelop the former Woodland Middle School property.

Both of these actions were unanimously passed by DEDA on Wednesday, but they will require City Council approval, as well.

Enbridge

Rob Link, one of the principal partners of A&L, said his project will enable Houston-based Enbridge to bring 100 to 150 jobs to Duluth and could set the stage for even more future growth.

“The potential for this blossoming is incredible,” he said.

Enbridge has agreed to lease about 41,000 square feet of space in the Wieland block on East Superior Street.

A&L expects to spend about $3.5 million on the project, which is expected to provide construction work for about 40 people for three months.

“This is a phenomenal thing for our city,” said DEDA commissioner and City Councilor Dan Hartman.

Enbridge operates the largest crude oil transportation system on the planet, and the company continues to grow aggressively. If Enbridge has a positive experience, Link believes downtown Duluth could position itself to snare more jobs in the future.

“My challenge is to make these people as happy as freaking clams,” he said.

Bluestone Commons

To help developer Mark Lambert turn the Woodland Middle School property into a mix of student housing and commercial space, DEDA proposes to use tax-increment financing, often called TIF for short. TIF is a form of public subsidy that takes new taxes generated by a development and uses a portion of that money to pay for public infrastructure to support the project.

Bluestone Commons LLC plans to redevelop the Woodland Middle School site in six to eight phases. The first phase will provide 280 bedrooms worth of student rental housing, but when the project is fully built out, the development will boast 783 bedrooms.

Lambert has plans to lease space to local colleges and to bring more than 41,000 square feet of retail and restaurant operations to the development, as well.

Right now the property is home to a public school and generates no local property taxes. As soon as it is sold to Bluestone and becomes private property, it will generate an estimated $82,310 worth of taxes each year.

When the site is fully built out and redeveloped, Bluestone Commons is expected to have a market value of about $74.1 million. Such a property would generate $943,610 annually in taxes, and when the tax increment agreement expires in 26 years, that full sum will flow to the public tax rolls.

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