New apartments coming to Hermantown

The 148-unit market-rate development figures to open in 2021, with construction starting soon.

A man climbs into one of the hydraulic excavators on the site of the former Gallagher’s Efficiency Apartments at the corner of U.S. Highway 53 and Ugstad Road in Hermantown Friday afternoon. P & R Companies, of Duluth, is building a 148-unit apartment complex on the site. (Steve Kuchera /

A local developer with apartment complexes in Superior is moving into Hermantown in 2021.

P&R Companies, of Duluth, announced its newest development, a 148-unit facility at the corner U.S. Highway 53 and Ugstad Road, earlier this week. For co-owners Ryan Nelson and Pete Pavlovich, it'll be their fifth large complex, joining Superior developments 320 North, ONYX of Superior, Village of Superior and the soon-to-open Central Flats on Belknap Street.

"We like to build where we live," Pavlovich said, describing his business partner, Nelson, as residing in Superior. "Now, we're shifting to our first development outside Superior. To have it in my backyard in Hermantown is special."

Site preparation has been ongoing throughout the summer at the home of the former Gallagher's Efficiency Apartments. The new complex will include one-, two- and three-bedroom layouts, along with a handful of studio apartments.


An artist rendering of what the finished 148-unit apartment building will look like. (Image courtesy of P & R Companies)

Amenities will include an entertaining suite, fitness center, virtual fitness room, outdoor deck with grilling stations, a business center, dog-washing station, indoor bicycle storage, heated garage parking and storage options.

The project costs $30 million and is being privately financed.

"The demand for housing in Hermantown is ... from people outside that want to move in," Mayor Wayne Boucher said. "There's a distinct demand for this type of housing."

The property sold in 2017 for $400,000 to P&R Companies, according to a St. Louis County property details report. The old Gallagher's buildings, a series of small, one-level, white cabins, were razed earlier this summer.

The complex passed through city planning and zoning quietly.

"It was zoned commercial already and there weren't any residents upset about it," Boucher said, confirming the city offered no incentives to locate the complex in Hermantown.

The development features market-rate rents and is billed in a news release as offering luxury living spaces while being "ultra-conveniently" located along Highway 53, "within walking distance of the Hermantown schools and Essentia Wellness Center, and a couple miles from the industries located near the Duluth Airpark."


"It is important to us to be able to provide homes and jobs in the areas in which we live," Nelson said in a statement. "Having those two aspects really impacts the local community long term."

Construction will begin soon on the complex, spokesperson Erin Makela told the News Tribune, with plans to be accepting tenants by fall 2021.

"We're very excited to be in the Hermantown area," she said.

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