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Project could bring cost of assisted living within reach for many Duluthians

The Duluth City Council will be asked to vote in support of a 112-unit senior housing apartment building.

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A 112-unit assisted living development serving low-income seniors is proposed for the lower half of the 700 block of East Fourth Street, Duluth, on the site of the Discount Mattress & Furniture building, shown Thursday, Dec. 2, 2021, and two adjacent vacant lots. Steve Kuchera / Duluth News Tribune

A Minneapolis-based development team is looking to tackle a large-scale affordable housing development geared toward serving one of Duluth's most vulnerable populations: senior citizens of modest means who also are in need of care.

LaSalle Group Ltd. and Tapestry Cos. propose to construct a 112-unit apartment building on the upper side of the 700 block of East Fourth Street. All the units in the three-story structure would be accessible for people with disabilities. And here’s the kicker: Rents would be pegged so as to be affordable for households earning no more than 30% of the area median income, likely translating into monthly payments in the low- to mid-$400 range for assisted living units.

That price point is virtually unheard of for an assisted care apartment building, said Jason Hale, Duluth’s senior housing planner. He noted that such facilities routinely can charge residents more than $4,000 per month — well beyond the financial means of many elderly renters.

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Gary Meader / Duluth News Tribune

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Tenants in the proposed new development would have access to varying levels of care, depending on their health needs. While residents would enjoy the privacy of their own individual quarters, they also would have access to shared common space with others living in the building, including communal dining.

But the would-be developers of the property will need to assemble a complex patchwork of financial support in order to see the proposed project through to completion. The first step would involve submitting an application for low-income housing credits to the Minnesota Housing Finance Agency in January.

The Duluth City Council will be asked Monday to pass a resolution of support for the project, identifying it as a community priority that “meets locally identified housing needs.” The document points specifically to a 2019 report by Maxfield Research Inc. that predicted Duluth would need an additional 3,509 units of affordable housing by 2024.

Hale said Duluth’s affordable housing needs are particularly acute for senior residents, as is the case in many communities across the nation.

At Thursday night's agenda session meeting, 2nd District City Councilor Joel Sipress voiced strong support for the proposal: "It's a great infill project. If we had a checklist of everything we'd like to see, this fits it all."

Hale said the developers hope to make use of a new state program specifically intended to help fund affordable assisted living facilities. He called the proposed development in Duluth “a little bit of a pioneering project.”

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The Duluth City Council on Monday, Dec. 6, 2021, will consider a resolution supporting tax credits for a proposed assisted living development on the site of the Discount Mattress & Furniture building, shown Thursday, Dec. 2, 2021, and two adjacent vacant lots. Steve Kuchera / Duluth News Tribune

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The facility would make use of Minnesota’s Elderly Waiver program to help cover operating costs and hold down rents, Hale explained.

He noted that LaSalle and Tapestry bring a special level of expertise to the project.

“Of course, we want to help grow our existing development base and make sure they’re successful, because that’s the best way to do economic development. If you think about it from an organizational perspective, you want to grow the talent and the organizations you have,” Hale said.

“At the same time, this is a really good example of an outside group that’s sophisticated and experienced and came in with a different idea. They are proposing something that others haven’t been able to do yet. But if it’s successful, our hope is that it proves this can be done here, and other groups will pursue similar projects in the future."

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Duluth City Councilor Gary Anderson asked Hale what further assistance from the city might be requested if the development plans advance.
If the development team is successful in its quest to obtain housing tax credits for the project, Hale said he expects some amount of tax-increment financing likely will be requested from the city, as well.

Hale said large outside developers looking at opportunities in Duluth sometimes struggle to find sites “big enough to do a meaningful project.”

“That’s one way we can help is by keeping tabs on things that are or might be available and would be a good fit for a project,” said Hale, who noted the sizable site in question has been on his radar for about three years now.

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If the proposed senior housing project comes to fruition, it could add to the revitalization of a formerly distressed portion of Duluth’s East Hillside neighborhood.

One Roof Community Housing aims to begin construction of its 52-unit Brewery Creek Apartment Building early next year in the 600 block of East Fourth Street. And plans are in the works to rehab a condemned townhome building which was recently the scene of a fire, just to the west of that new apartment building, as well.

“If there’s going to be another 112 units just down the road, we’re talking about a Fourth Street corridor into East Hillside that’s definitely changing. And it’s kind of a gateway into the neighborhood,” Hale said. “You’d have 2½ blocks of tremendous investment.”

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