Senator's view: 425 West project will be an economic asset for city, state

Talk about it

On Friday, Sept. 14, the Minnesota Department of Employment and Economic Development, or DEED, announced the city of Duluth would receive $8.5 million in a competitive business development grant to go toward the public’s contribution to build the new “425 West” corporate tower project.

Duluth’s request ranked highest among northern-region projects in a process that saw DEED vetting 90 applications via a comprehensive review that left politics out of the equation. Even so, Republican Senate Majority Leader Dave Senjem said he

didn’t see “anything in here that’s really a showstopper in terms of furthering economic development in the state of Minnesota.”

I respectfully ask Sen. Senjem to take another look at Duluth.

The bonding funds awarded here will provide some public money as part of a much larger private economic development project in downtown. In June, the city of Duluth announced the proposal by AtWater Group LLC to build the 15-story corporate tower at 425 W. First Street. The structure is to house both office and retail space and is expected to cost $80 million to construct. The bonding request from DEED for a portion of the cost of constructing the building’s public parking ramp was only $8.5 million of the total.

This public/private partnership represents the largest development of its kind in Duluth’s history. When fully occupied, the new building will create more than 200 new full-time-equivalent jobs while retaining more than 400 existing jobs. In addition, up to 300 construction jobs will be created over a three-year span.

And, for Duluth, the good news surrounding the 425 West project only gets better. The primary corporate partner for the project recently was revealed to be Maurices. This is a significant development for the region and the state. While no longer locally owned, Maurices is one of the fastest-growing retail chains in the country — and Duluth is set to be the hub for that expansion. Maurices’ parent company, Ascena Retail Group, clearly is serious about staying here, committing to pay $30 million of the total construction costs.

For years, Duluth has lamented local jobs leaving to go elsewhere. With Maurices and the 425 West project, we not only have good corporate jobs staying here, we have jobs currently located elsewhere relocating to Duluth. It’s further evidence that, unlike 20 years ago, Duluth can weather a recession with a commitment to economic diversity and an investment in local companies.

Lest we forget, Duluth had two projects in the running: One was the parking ramp and the other was Wade Stadium renovations.

The $47.5 million bonding allotment by the Legislature this past session created a statewide competition for a clearly inadequate pool of money. DEED, which was charged with evaluating bonding applications, received more than $288 million in requests from 90 communities. We had the capacity to bond at a higher amount but not the political will. Instead, lawmakers assigned the executive branch to do the legwork.

In previous bonding years, the Wade project would have been a very strong contender. However, in this process, it did not fare well. The Wade, however, is both an athletic and historic asset in our community, and I have pledged to move this project forward at the next opportunity.

Roger Reinert represents Duluth in the Minnesota Senate.

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