Just below Spirit Mountain, Brad Johnson pulled his SUV across Grand Avenue and onto what amounts to nearly 27 acres of promise.
Four wooded ravines create a powerful aesthetic over the land, which yields to the wide and vibrant waters of the St. Louis River below it.
Offshore is Tallas Island, and on the far side of the river a wooded section of Superior.
“I’ve been walking this site for the past 12 years,” said Johnson, an 81-year-old developer from Chanhassen, Minnesota. “It’s the last truly beautiful, developable site in the city of Duluth.”
Johnson likes to joke that the 10 partners making up Spirit Valley Land Co. were a lot younger when the group began to buy up and assemble the properties several years ago. At least two of the other partners are also now in their 80s.
Yearslong negotiations and deal-making with the city, state and BNSF Railway finally gave way to actual grading work on the site this fall. Next spring will bring with it utilities installation and construction of a road onto the property, thanks to partnerships with the city and St. Louis County.
Now comes the hard part: finding business owners and housing developers who will invest in the promise of what is being called RiverWest.
Scott Neustel, owner of Ski Hut in Duluth, bought into the group in 2014. He’s the only business owner so far to commit to building on the land.
“This is just a blank canvas,” Neustel said. “To me, it’s like Canal Park was when I was a kid; there wasn’t anything going on down there.”
Neustel closed Ski Hut’s West Duluth store farther east along Grand Avenue earlier this year, finding that the smaller version of his main store in the East Hillside neighborhood was too far away from the ski hill.
Neustel is in the process of making plans for a new Ski Hut location on the corner of what will become a signaled intersection on Grand Avenue the RiverWest development will share with the lower chalet of Spirit Mountain.
“I can put a store in there that’s going to accommodate tourism — 'Come to Duluth, ride a quality bike on a quality trail, or have a quality ski' — that’s our plan,” Neustel said.
The Willard Munger State Trail bisects the site, which has ready access to numerous other skiing, hiking and biking trails, including the Superior Hiking Trail across Grand Avenue and Waabizheshikana, formerly known as the Western Waterfront Trail, closer to the river.
“The public recreation infrastructure here is something you can’t really achieve almost anywhere else in the city,” said Adam Fulton, deputy director of planning and economic development for the city of Duluth.
Fulton described the utilities and road development taking place next spring. To help make the project feasible, St. Louis County in 2018 committed $900,000 from proceeds of its transportation sales tax, and the state granted the city $357,000 to defray the cost of a traffic signal at the intersection with Grand Avenue.
Estimates are between $1.5 million and $2.7 million to bring a street, named River West Drive, and utilities, including water and storm sewer, onto the property. Fulton said the city will have a better idea of the total cost after bidding stages in the coming months. The city will front the costs and developers will reimburse those by passing assessments onto the new property buyers.
“It’s been a very positive public-private partnership,” Fulton said.
A previous name for the development, Kayak Bay, was abandoned around the time the city withdrew plans earlier this year for an elaborate kayak landing below the site due to the ongoing financial crunch brought upon by COVID-19.
But that hasn’t deterred the partners.
“We’ve got $3 million invested so far,” said Johnson, a veteran of developments throughout the city, including the Ramsey Village Townhomes across from the Super One in West Duluth.
Johnson talks about developing in terms of building "critical mass," by exciting people and, in turn, exciting others willing to provide goods and services to those people. He spends a few days a week in Duluth, working out of his cabin in Minong, Wisconsin.
He first fell for the RiverWest site when he would go for runs alongside it.
The terrain is suitable for a variety of uses — almost 17 buildable acres that Johnson and his partners hope will deliver housing, a hotel, restaurant, salon, shops and maybe even a winery.
“We’ll have 200 to 300 units of housing here,” Johnson said, describing a higher-end apartment complex and two-story homes built atop garages. “That’s what makes it work.”
The News Tribune asked Johnson if he was concerned about Spirit Mountain’s financial difficulties after it received $300,000 in aid from the city in September.
“We want Spirit Mountain to be a success along with RiverWest,” Johnson said. “As a land developer we could not ask for a better set of amenities.”
Neustel agreed. He loves the view, calling it “a beautiful and wild part of the river.”
He believes in the idea of adding a commercial strip along a section of Grand Avenue that’s mostly been left alone.
“It’s all teed up and ready to go," he said. "There are no more hurdles.”
Except one: landing business owners and housing developers willing to join Neustel by committing to the development.
“I’m a retailer,” Neustel said. “This was kind of a leap of faith. I wanted to be in the front row when it comes to making decisions on my business. But we’re not developers. We assembled the land. We’re looking for people that do this for a living to say, ‘Wow.’”
Strolling the property with Johnson, the News Tribune asked him about the risk that comes between getting the property from where it is now to what he hopes it could be.
“The risk is that nothing happens and we’re left with a million-and-a-half dollars in debt we have to service,” Johnson said. “But I don’t think that’s the way it’s going to go.”