After years of preparation, efforts to restore Duluth's historic NorShor Theatre began in earnest this week as Sherman Associates received the keys to the building.

Initial steps will involve cleaning out the downtown building and removing potentially hazardous materials, such as asbestos and lead-based paint, said Richard Kiemen, the firm's vice president of construction. That work commenced on Monday and the project kickoff was marked Tuesday afternoon by a parade of speakers, all extolling the NorShor's restoration.

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"It is finally happening," Duluth Mayor Emily Larson said at a news conference called in front of the theater. "Welcome to the next transformation for our downtown Historic Arts and Theater District.

"Renovating this theater is not just a romantic idea. It's not just about protecting a beautiful asset and sharing the story of Duluth," she said. "It really makes economic sense, too. We are not here just because of the story and the aesthetics of this space. We're here because the creative economy means $40 million to Duluth every year."

Larson credited her predecessor, former Mayor Don Ness, for providing "a courageous and very bold vision" for the NorShor that led to the Duluth Economic Development Authority's purchase of the building in 2010.

The restoration is expected to cost $30.5 million, and support for the complicated project comes from numerous sources, including the state of Minnesota, federal tax credits, local tax-increment financing, the Local Initiatives Support Corp., the Duluth Playhouse and Sherman Associates.

Initially, Sherman Associates expected to close on the building in late April, but the deal got held up by last-minute tax credit issues that had to be ironed out, said David Montgomery, chief administrative officer for the city of Duluth.

Kiemen described the NorShor project as one of the most complicated deals he has ever seen assembled.

"This has been hard. I mean really, really hard. I don't know what else to say. But talk about commitment and stick-to-itiveness," he said.

Kiemen said he remains confident the restoration will be completed by December 2017. If it's not, millions of dollars in tax credits the project is expected to receive could expire.

Montgomery predicted earlier that the restoration would take at least 18 to 20 months to complete. As it stands, he said the project has little wiggle room before reaching its December 2017 deadline.

"We're bumping up against it, without question," Montgomery said. "We used up our cushion and then we used up the secret-secret cushion."

Nevertheless, Kieman said: "Everything is on line for completion by the middle of December 2017, and we're working with the contractor to find ways to potentially accelerate the schedule."

The Duluth Playhouse is expected to be the primary tenant of the restored theater, and after seven years there the nonprofit is expected to assume ownership of the building.

Playhouse Board Chairman Herb Minke predicted the organization will make good use of the space.

"We've been busting at the seams for eight years," he said.

Christine Seitz, the Playhouse's executive director, said her organization has launched a $4.5 million capital campaign to equip the theater with lighting, a sound system, an orchestra pit, a piano and other items needed to make the venue a top-notch theater/performance space. Already, she said, the Playhouse has received commitments for $800,000 of support.

"This is our city, and this is our theater. The NorShor's new life will have a profound effect on the entire region, and today we start its new legacy," Seitz said at Tuesday's event.

Ness said it likely would have been simpler to push ahead with a city-owned theater funded almost entirely with public money.

But he contends the more-complicated deal that was assembled, involving the city, a nonprofit and a private developer, will yield a better project.

"We believed in the importance of bringing different partners together, using their skill and their resources to make this project a reality. And that is why we are here today, and why we have such confidence in this project going forward, because we have the expertise and the tremendous reputation of the Playhouse. We were able to utilize nationwide expertise in historic and new market tax credits with George Sherman. We were able to challenge our community to step up and make contributions to this project," he said.

"There are so many people to thank, and this is a community success story because we took a more complicated, longer path, using the resources that are here and the optimism that is here to see this through and bring us to this very exciting day," Ness said.