The ownership of a troubled building in downtown Duluth could be up for grabs because of unpaid tax bills.
The fire-damaged Pastoret Terrace, formerly home to the Kozy Bar and Apartments at the corner of First Street and Second Avenue East, went into tax forfeiture in December 2015. At the time, its owner, Eric Ringsred, owed $26,522 in back taxes and penalties dating back to 2011, according to St. Louis County Auditor and Treasurer Don Dicklich.
Ringsred bought the building from Paul King on a contract for deed and has not yet fully paid off the purchase. On behalf of Temple Corp. Inc., King filed paperwork with the county on Jan. 26, seeking to repurchase the property and settle up outstanding tax bills, but city officials appear to have other plans for the building.
At a committee of the whole meeting today, members of the St. Louis County Board will discuss a resolution that could block King's and Ringsred's efforts to repurchase the property for up to one year, providing an opportunity for the city to step in.
In a memo to the board, county staff recommended passage of the resolution "to allow time for the Duluth Economic Development Authority and the city of Duluth to acquire the property for demolition and redevelopment purposes."
For his part, Ringsred said he still hopes to restore the 129-year-old Pastoret Terrace building, renovating it as an affordable housing development.
Ringsred and his would-be development partner, Mike Conlan, doing business as Pastoret LLC, have made three unsuccessful runs at the Minnesota Housing Finance Agency in pursuit of funding for the project.
"We have been screwed for three years by MHFA. This year, we had one of the highest-scoring projects in the state, but instead they provided funding to insiders with a score less than one-third of our point total on the project," Ringsred said.
Of late, he and Conlan have been consulting with attorneys about possible litigation against the agency.
"This is the end. The gloves are off," Ringsred said.
As for the recent interest that the Duluth Economic Development Authority apparently has expressed in redeveloping the property, Ringsred said it makes him question the support city officials previously expressed for his efforts to restore the historic building.
"The city, of course, contrary to what they've said publicly in the past - that they want to see the building renovated - they want to demolish the building. Now we see what they're all about," he said.
Keith Hamre, Duluth's director of planning and construction services, said it remains unclear if the building is beyond repair, and plans call for the county to hire a structural engineer to assess the structure.
"Once we see what that report produces, we'll know what our next steps are," he said.
Hamre said inaction was no longer an option.
"It's not an inviting property in the downtown and it attracts the wrong element to the community. It gives residents and visitors the wrong image of our city, too. So we need to see something happen with that site. We need someone who will invest in the property," he said.
In January 2015, Ringsred and King were issued a notice that they would have until the end of the year to bring the building up to code or remove it.
"I think both the city and the county have been very patient with the property owner, and the property owner has tried one course a few times and has not really looked at other options. And the reason that Eric received the letter in January of last year was that we were realizing that here we are going on the fifth winter (since the fire), and something had to happen with this property. We need to have the property addressed. We need a property owner who is going to be responsive," Hamre said.
County Commissioner Frank Jewell said he considers Ringsred a longtime friend and is willing to hear him out.
Jewell said that if Ringsred and his partner are denied an opportunity to repurchase the Pastoret Terrace property it would be a departure from the county's past practices.
"In the past with tax-forfeited properties, if you owned one and you wanted it back and you could come up with the money, you would get it back," Jewell said.
"Historically, that's been the way we've done it, but nothing in the law says that's the way it has to be done," he said.
The county board will discuss the situation involving the Pastoret Terrace building today but won't take final action on a resolution charting its likely future until March 8.