Essentia Health has reached a development agreement with the city of Duluth to build a new, publicly funded parking ramp in downtown Duluth.

Essentia and the city also agreed to work together to replace housing that will be demolished to make way for the new ramp, to be located at First Street and Fourth Avenue East. The Duluth City Council must approve the project agreement to move forward with construction, according to a news release.

The hospital system will commit up to $1.44 million for One Roof Community Housing's Brewery Creek Apartments, a project bringing 52 affordable apartment units to the Central Hillside neighborhood.

This donation pushes the project to the finish line, Jeff Corey, executive director of One Roof, wrote in the release.

“We know housing is a significant need in Duluth,” Essentia CEO Dr. David Herman said in the release. “We also understand that housing is critical to people’s health and important to our aim of achieving health and vitality in our communities.”

Through a skywalk, the ramp would connect to Essentia's new hospital and clinic space that's being constructed as part of its Vision Northland project. People can also park in the ramp and visit nearby businesses and entertainment venues in the downtown Historic Arts and Theater District.

Vision Northland is Essentia’s $800 million private investment in a new hospital tower and related infrastructure and financing. This private funding won’t be used for the parking ramp.

A 14-story hospital bed tower will be constructed as part of Essentia Health's Vision Northland. (Courtesy Essentia Health)
A 14-story hospital bed tower will be constructed as part of Essentia Health's Vision Northland. (Courtesy Essentia Health)

The Minnesota Legislature approved a bill last session that appropriated funding for the Regional Exchange District, also called Duluth's medical district. Of the $97.7 million set aside for public infrastructure improvements, $36.4 million was dedicated to fund construction of a ramp that could house up to 1,400 new parking spaces, according to News Tribune reporting.

Using the state-appropriated fund, the city will reimburse Essentia for construction, design and property purchase costs up to $36.4 million. Once construction is complete, the city will own and operate the ramp and Essentia will pay to use the ramp, according to the proposed agreement.

The city has approved some funding for improving parking, roads, sewers and utilities in the medical district, according to the release.

The City Council is expected to take up the development agreement Monday. If approved, construction will likely last for two years, the release reads.

Essentia purchased five properties, which house 19 units, on the 300 block of East First Street in the fall. The News Tribune reported that residents of the housing units, including some affordable housing units, were concerned about finding a new place to live in a city with a tight housing market.

Since closing on the properties, Essentia has worked with all nine residents to find new housing. There are two remaining tenants, one of which has plans to move out at the end of the month. It will continue helping the last resident relocate, according to an Essentia spokesperson.

This story was updated at 4:30 p.m. March 17 with additional information about the development agreement and tenant relocation plans. It was originally posted at 1:59 p.m. March 17.