ADVERTISEMENT

ADVERTISEMENT

Duluth Chamber seeks outside perspective on downtown development

The demand for all types of housing in downtown Duluth, from affordable to luxury and everything in between, was cause for chamber leadership to meet with the Kilbourne Group last week to gather input and discuss potential projects with the Fargo-based developer.

Woman standing in an apartment.
Roers Companies property manager Cesarea Solem talks about a one-bedroom apartment on the second floor of the USAN Building on Wednesday. The building at the intersection of First Street and Lake Avenue houses offices, including the Duluth Area Chamber of Commerce, on the first floor.
Steve Kuchera / Duluth News Tribune
We are part of The Trust Project.

DULUTH — In order to sustain the workforce necessary to support Duluth's top industries in health care, manufacturing and aviation, it's no surprise that more housing is needed.

Businesses like Cirrus Aircraft, Essentia Health, St. Luke's hospital, Altec Industries, and others have called on local leadership to address the need for additional housing to attract and retain the growing workforce.

Area colleges and trade schools that partner with these industries face similar challenges while trying to attract and train more students to fill local workforce needs.

According to Daniel Fanning, the Duluth Area Chamber of Commerce vice president of strategy and policy, developers recognize the opportunities and timeliness, and know the solution is more housing of all types.

MORE HOUSING COVERAGE:
The proposals called for expanding affordable health care by establishing a MinnesotaCare public option and more than a billion dollars in affordable housing proposals over the next four years.

"We know there is a need for more affordable housing, and the city, HRA, LISC and other partners are working that," Fanning said. "There is also a need for workforce and market rate housing, and even higher-end luxury housing. While we hear a desire for more single-family homes, we know those are a bit more complicated to complete right now given current rates, returns and even availability of land — especially downtown, but they're still possible and we’ll keep pushing for those, too, but at this point, any new housing options would be beneficial."

ADVERTISEMENT

In his policy and advocacy email update on Nov. 22, Fanning wrote: "Throughout the community, we are seeing new buildings going up and existing buildings being repurposed. This includes commercial and retail, as well as much-needed housing of all types."

Take, for example, the recent downtown development completed by Plymouth, Minnesota-based Roers Companies at the Cove Apartments on the corner of Lake Avenue and East First Street. The company specializes in real estate development and property management.

"Right above us in the chamber office, Roers is in the process of completing the beautiful Cove Apartments. They’re fairly new to Duluth and have been great to work with," Fanning said.

Woman working in an office.
Aubrey Hagen, membership director for the Duluth Area Chamber of Commerce, works Wednesday in the chamber’s offices in the USAN Building.
Steve Kuchera / Duluth News Tribune

Roers reinvented the 1910 Builders Exchange property and adjoining Interstate Auto building into 48-units with studio, one-, and two-bedroom apartments including five affordable units. Phase 1 of the Cove Apartments opened in fall 2020 and reached 100% occupancy within 45 days. Phase 2 (connected via an adjoining skyway) opened in fall 2022 with 38 new units.

While the investments of other local developers is one piece of the solution, a more aggressive approach is required to meet the rate at which housing is in demand, Fanning indicated in his update.

Man standing in a hallway.
Duluth Area Chamber of Commerce Vice President of Strategy Daniel Fanning talks about an area of USAN Building still undergoing renovations Wednesday.
Steve Kuchera / Duluth News Tribune

"Both for the sake our existing businesses who need workforce housing and taxpayers/businesses who need tax relief, we need more development as soon as possible," Fanning wrote. "Those of us who own a home/property recently received our proposed tax statements for the new year and many of us continue to see drastic increases at all levels that we know simply are not sustainable. These significant tax increases hurt taxpayers, hurt local businesses, could force some out of the area and likely prevent some developers from investing even more in the area — becoming a Catch-22."

Fanning referenced the longstanding narrative around Duluth being a difficult place to do business and development, an issue the chamber has focused on resolving with the city over the past several years.

A downtown office building.
A roll-off dumpster sits in the parking lot outside the USAN Building on Wednesday.
Steve Kuchera / Duluth News Tribune

"The pandemic was a setback, but momentum is again building around streamlining the progress. There’s support and buy-in from the city and a real willingness to want to help move things along, while also still maintaining a responsible process and high standards. That’s why we are excited to see some of this renewed interest from the outside, it gives us an opportunity to demonstrate some of these recent changes, walk the walk and replace that old, tired narrative with a new narrative about Duluth being a great place to invest," Fanning wrote.

ADVERTISEMENT

To support the chamber's ongoing efforts to engage and recruit developers from outside the area, Fanning traveled to Fargo, North Dakota, last week to meet with the Kilbourne Group.

According to Fanning, the Fargo-based real estate developer has experience with its downtown historical redevelopment and mixed-use infill projects that parallel the type of development the chamber envisions being successful in Duluth, specifically in the downtown and Lincoln Park areas.

"They had an exciting initial visit to Duluth a couple months ago and Chamber President Matt Baumgartner was able to start a strong connection with them and our chamber, which has only grown since. They see the historic opportunities here, as well as the challenges, and realize that Duluth is facing a pivotal moment and want to be part of our success," Fanning wrote in the update. "To be clear, we don’t want to be Fargo or anywhere else except the most successful version of Duluth we can be. However, there are absolutely things we can and should learn from Fargo and other communities facing similar issues that we face in Duluth."

READ MORE CHAMBER COVERAGE:
The set of bills would require up to 24 weeks of paid family and medical leave from all Minnesota employers, regardless of size.

Future visits are planned between the chamber and Kilbourne Group within the coming weeks to keep the ball rolling, Fanning said. No official plans or agreements have yet been set in stone between the two entities; however, Fanning assured there is a high level of interest on the chamber's end.

"Yes, Kilbourne Group is the developer I met with in Fargo, but there are others interested in and even some currently working in Duluth," Fanning said.

He anticipates a decision on partnering with a developer will be made by spring 2023. The Kilbourne Group was not immediately available for comment.

This story was updated at 1:48 p.m. Nov. 28 to correct two misspellings of "Roers." The News Tribune regrets the errors.

Brielle Bredsten is the business reporter for the Duluth News Tribune.

She earned a bachelor's degree in Professional Writing & Technical Communication, with minors in Advertising and Creative Writing from Metropolitan State University, in addition to a two-year professional paid internship as reporter/editor of the student newspaper.

She is an award-winning professional writer, photographer and editor based in rural Minnesota. Over the past decade, Brielle Bredsten has contributed more than 1,000 articles, feature stories, non-profit press-releases, photographs and columns. Her work has been published in several community newspapers.

Send her story tips, feedback or just say hi at bbredsten@duluthnews.com.
What To Read Next
Artificial intelligence can now act as an artist or a writer. Does that mean AI is ready to play doctor? Many institutions, including Mayo Clinic, believe that AI is ready to become a useful tool.
Bankruptcy information gathered from cases filed in U.S. Bankruptcy Court in Duluth.
Recently sold properties from St. Louis County.
While traffic has roughly doubled since 2020 — the heart of the pandemic, when there were 14.9 million passengers — it’s still not at pre-pandemic levels: In 2019, there were 39.6 million passengers.