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Despite delays, NorShor Theatre deal nears

The facade of the NorShor Theatre on Superior Street in downtown Duluth in September 2015. (Clint Austin / caustin@duluthnews.com)

After numerous delays, a development agreement for the NorShor Theatre restoration project appears to be close at hand.

At a recent meeting, 4th District Duluth City Councilor Howie Hanson said that he continues to receive a lot of questions from constituents and asked city administration for an update on the project.

"When we last heard, as I recall, we heard we were crossing the t's and dotting the i's, and that a development agreement (would) be coming soon. I think it has become soon, and I'm wondering where we're at," he said.

David Montgomery, Duluth's chief administrative officer, responded: "There are a very large number of i's and a very large number of t's."

Nevertheless, Montgomery said he aims to bring a development agreement for the NorShor Theatre to DEDA, via a special meeting on April 6. If that passes, the agreement could be ready for consideration by the Duluth City Council on April 11.

"We are in fact getting very close now," he said.

An incredulous Hanson noted that the city has repeatedly said the project's start was just around the corner since early 2015, only to push back the timeline.

"How can we be assured that this is actually going to finally come, after this long litany of delays?" he asked.

Montgomery responded, saying: "This has been a very, very complicated project."

He said the first hurdle involved assembling the needed tax credits for the project, which is expected to cost $29.6 million.

"That was the hold-up throughout 2015 ... the issue that the financing was not in place. They had not secured sufficient credits to put together the full financing package," Montgomery said.

Even after the financing was secured, crafting a written agreement proved to be a challenge.

"Since that time — and it's hard for people to understand this — but it has been a real slog, working through the issues with the credit advisers. Had we been working with one credit issuer and one credit bank, it would have made this process much easier. But we're dealing with three. So you have three different groups taking slightly different interpretations of what they need, in terms of security, in terms of process, in terms of documentation. ..." Montgomery said.

He said the development agreement heading to the council contains no fundamental changes.

Plans thus far have called for Sherman Associates to restore the NorShor Theatre and its annex with the help of historic tax credits and then eventually hand over ownership of the building to the Duluth Playhouse. At present, the building belongs to the Duluth Economic Development Authority.

"It has been a very frustrating process working through this, but I feel we're getting very close," Montgomery said.

Duluth City Council President Zack Filipovich said councilors should have an opportunity to explore and discuss the proposed development agreement for the NorShor during a committee of the whole session prior to their regular meeting April 11.

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