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Duluth City Council could seek grant for new 96-unit apartment building

A new 96-unit apartment building soon could be on the horizon for Duluth's Central Hillside neighborhood.

But the would-be developer of the proposed $20 million CityView Flats project, MBJ Development Corp., is seeking a financial leg up from the city. On Monday, the Duluth City Council will consider a resolution that would authorize city staff to apply for an $800,000 Workforce Housing Grant from the Minnesota Housing Finance Agency.

The same resolution also would offer conditional approval of a plan for the city to abate $300,000 in taxes, to be matched with another $300,000 from St. Louis County. The full, combined $600,000 value of the tax abatement packages should be achieved in about 10 years, and after that time, all future property taxes would be collected in full.

The proposed 3- to 4-story apartment building at 333 N. First Ave. W., would offer underground parking, according to Heather Rand, Duluth's business development director.

"This developer has wanted to move forward with a project like this for quite awhile. He believes there's a strong market for workforce housing here," Rand said.

If the grant request proves successful, Rand said construction of the new building could begin this spring.

But Rand pointed out that Duluth likely will face stiff competition, as just $4 million will be made available for workforce housing grants statewide, and the requested grant for CityView Flats would represent 20 percent of that sum.

"We think multiple cities will submit this year, because there's such a need for this type of housing and all types of housing throughout the state," she said.

Nevertheless, Rand believes Duluth can make a strong case for the CityView Flats project. She noted that the vacancy rate for rental housing in Duluth has been sitting at 3 percent for two years running. Rand said a number of local employers are expected to write letters in support of the project, which could provide needed housing for workers in Duluth.

If built, nine of the building's 96 market-rate units are expected to be smaller rent-restricted apartments.

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