The ongoing COVID-19 pandemic and uncertainties as to the impact it will have on college life have delayed plans for LSC Flats, an 87-unit student housing development to be built next door to Lake Superior College in Duluth.
LSC Flats LLC, an arm of Duluth-based Titanium Partners LLC, had aimed to break ground for the project this spring, with an eye toward opening the apartment building's doors to students in fall 2021.
But a revised development agreement approved by the Duluth Economic Development Authority now calls for construction to commence by June 1, 2021, and for the project to be completed no later than Dec. 31, 2022.
Chris Fleege, director of planning and economic development for the city of Duluth, said the COVID-19 pandemic has slowed many projects.
"I think we've seen a lot that are on hold. It's not that there's not cheap financing, because that is out there. But it is the uncertainty of what the revenue side is going to look like," he said.
Those unknowns are particularly troubling for a project such as LSC Flats, Fleege suggested.
"Are they going to have in-person classes? I know that St. Scholastica has said that they're signaling 'yes.' But it's just this uncertainty," Fleege said. "So, for people to go build things that may not have occupants for a while, that was really the delay for LSC Flats. That was the primary driver for them, was just not knowing what the future looks like."
The unclear picture can give not only developers pause, but also their lenders, Fleege noted.
Earlier this year, Brian Forcier, president of Titanium Partners, estimated LSC Flats will require an investment of nearly $18 million.
When completed, the 87-unit building and parking will take up about half of a 6-acre lot, with room for anticipated expansion. The tax-forfeited property was acquired from the county with help from the Duluth Economic Development Authority and sold to the developer for its assessed value.