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Duluth school district says Nettleton deal has fallen through

United Properties has opted against developing senior housing on the site of the former Nettleton Elementary School in Duluth, seen here in March. (News Tribune file photo)

Another housing developer has backed away from purchasing the former Nettleton Elementary School from the Duluth school district.

Minneapolis-based United Properties has opted against developing the property, said Duluth schools superintendent Bill Gronseth, noting the decision had to do with "timelines."

"Once they looked (further) into the building and what they'd like to do with the site," he said, "I think it just didn't work out."

United Properties is behind the $21 million Kenwood Village project in Duluth, and had intended to put senior housing on the Nettleton site. No one from the company involved with the Nettleton project was available for comment Monday, a spokeswoman said. No purchase agreement had been signed.

The school at 108 E. Sixth St. will remain on the market, Gronseth said. He will recommend to the Duluth School Board that it at least talk about selling the building to another educator. The board has turned down offers for its closed schools from other K-12 entities based on a board policy that says it won't sell to competition.

This is the second Nettleton housing deal to fall through. The school has been closed since 2013.

The School Board will discuss options for the use of Nettleton this month, Gronseth said.

It could be put to use by clients of The Hills Youth and Family Services, who the Duluth district educates. Those students are to be moved from their current setting at the former Cobb Elementary School in the Woodland neighborhood, possibly to the former Rockridge Elementary in Lakeside. However, renovations to Rockridge are estimated to cost about $3 million, more than the district can afford. 

Gronseth said Nettleton could be a possibility for those students, but Monday night he recommended to the board the Rockridge plan, meaning the district probably would need to borrow money to pay for renovations. A special meeting will be scheduled later this month to discuss that.

Nettleton also could be used for early childhood space, considering the district's need to balance enrollments among its schools. Or it could stay on the market in hopes that another housing developer has interest, Gronseth said, as that's a city need.

The Hills students cannot remain at Cobb because the building is being sold. The Hills' executive director Jeff Bradt said Monday that his primary concern was that those students be educated in a setting comparable to other district schools, whether that is Rockridge or Nettleton.