Affordable housing development may come to Duluth's Spirit Valley neighborhood

Aeon Inc. is considering a project that could bring up to 120 new rental housing units to the city.

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A large nonprofit with an established track record as a builder of affordable housing in and around the Twin Cities now is eyeing the Duluth market for the first time.

The Duluth Economic Development Authority will take up a resolution Wednesday that could provide Aeon Inc. with an option to purchase DEDA-owned land on the upper side of Wadena Street between 52nd and 53rd avenues west for $500,000. Aeon is looking to possibly build 60 to 120 units of "multi-family affordable housing" as part of "a multi-phase development" that could include two apartment buildings, according to an option agreement headed to DEDA.

The stated purpose of the option is to encourage Aeon "to make the investment in time, money and effort to determine whether the development is feasible." The purchase option would expire June 30, 2022, and the project would require aid in the form of low-income housing credits awarded statewide by the Minnesota Housing Finance Agency each year through a competitive process.

Aeon has been exploring prospects for a project in Duluth for about 18 months now, according to Jason Hale, the city's senior housing developer.

"They have a lot of experience building affordable housing, and we are happy to have that sort of experience brought up to Duluth and help us develop more competitive applications," Hale said.


"That's not to say that the folks we have building affordable housing here now aren't doing a great job and putting together competitive applications. But, to some extent, the more expertise and the more brain power we have working to do this type of housing in Duluth, the better," he said.

Representatives of Aeon Inc. declined to comment on the prospective Spirit Valley project when contacted by the News Tribune Friday. But the nonprofit's website says that since 1986, it has brought 5,580 affordable housing units into the market, providing homes for 15,000 residents across the Twin Cities metro area.

If Aeon proves willing and able to tackle its first project in the Duluth market, it would not only provide needed housing, but also would shift what is now non-tax-generating land onto the tax rolls.

Preliminary plans call for the project to be built in two phases. Hale said the most likely scenario would involve constructing one 60-unit building and then another later, based on the market reception. He estimates that each of those buildings would likely represent an investment of more than $10 million.

If Aeon decides to push ahead with the proposed Spirit Valley project and successfully submits an application in June, Hale said construction would likely commence in 2022 at the earliest.


Peter Passi covers city government for the Duluth News Tribune. He joined the paper in April 2000, initially as a business reporter but has worked a number of beats through the years.
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