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County, city partner to return neglected properties to productive use

St. Louis County has stepped up its efforts to coordinate with other local government units to put tax-forfeited properties back on the tax rolls. Two Duluth transactions currently in the works attest to that new spirit of collaboration:...

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St. Louis County has stepped up its efforts to coordinate with other local government units to put tax-forfeited properties back on the tax rolls. Two Duluth transactions currently in the works attest to that new spirit of collaboration: A parcel of land being assembled for the anticipated construction of a Kwik Trip station near the corner of Boundary Avenue and Highway 2; And an abandoned six-unit apartment building at 20 W. Fifth St. that One Roof Community Housing aims to restore and put back to use. Barbara Hayden, St. Louis County's director of planning and community development, said the county has been reaching out to cities like Duluth when properties become available, rather than just putting them up for auction to the highest bidder "We have a team that's taking a more proactive community development approach to tax-forfeited properties. So our department has been reaching out to communities and making them our partners. It's a new approach by the county, and I think it has really been embraced by the city, and they're working closely with us. In addition to Duluth, Hayden said the county also has renewed efforts to engage other cities in the process, including Eveleth, Chisholm, Hibbing, Virginia, Tower and Ely. Heather Rand, executive director of the Duluth Economic Development Authority, expressed her appreciation. "They've been really good at reaching out to Duluth's economic development arm and making us aware of tax-forfeited properties. Then we can assess whether that's something that we view as a strategic economic development opportunity or if we're just going to remain hands-off and let it go to auction. Those are our two options," he said   Kwik Trip Developer Brad Johnson of Lotus Realty Services Inc. said he initially looked for a suitable spot for Kwik Trip in Proctor but came up empty.
Instead, he hit on the Boundary Avenue site, located at the doorstep of both Proctor and Zenith Terrace, a manufactured home park. "This sort of an in-between grocery store and gas station for that area," Johnson said. Lotus aims to prepare and grade the site this summer in anticipation of Kwik Trip building there in 2018. DEDA is working to acquire a few tax-forfeited parcels of land from St. Louis County to help assemble the 4.8-acre site. "We're just kind of setting the table for Kwik Trip," Johnson told members of DEDA. The project is expected to result in a $5 million investment and the creation of about 25 jobs - 10 full-time and 15 part-time positions. "The wonderful part of this transaction is we're getting these properties out of tax-forfeit status, and we're putting them back on the tax roll," Rand said. She said DEDA sometimes can help expedite development by serving as an intermediary, purchasing tax-forfeited land from the county and then selling it to a developer at cost. "Those couple of tax-forfeit parcels were really just the last puzzle pieces of a much larger development. It made sense to us to facilitate that transaction so that then this larger project could occur. Whereas if they had gone to auction, who knows if they would have been able to pick them up or not, and it could have just slowed down what we feel ultimately will be a wonderful project for that intersection," Rand said.   Six-plex Jeff Corey, executive director of One Roof, expects the apartment building at 20 W. Fifth St. will require at least $500,000 to restore. "We've been looking at the property with the city and the county for a number of months. It's a solid building, but it needs pretty much a gut rehab on the inside and probably a bunch of things to the exterior as well," he said. But Corey believes the project will be worth the effort. "It's in a part of town that we have a lot of interest in making physical improvements to, in terms of housing. It's the sort of project that's big enough that it would be pretty tough for a small landlord to tackle." Hayden said the six-plex fell into disrepair and there were repeated police calls to the property. "It's still structurally sound. So we hope that with some investment, we can bring it back, addressing local housing needs and addressing what's now a neighborhood blight," she said. By collaborating with DEDA and the county, Corey said One Roof should be able to achieve a better outcome. "The county's historic process of selling these properties at auction on a contract for deed is one where someone would be kind of grabbing the tiger by the tail. So it makes sense that we would come in and make an investment in the property and get it into really great shape so that it can provide quality housing for the community," he said. Hayden explained that the county is working to end what has often been a cycle. "We're really focusing on not just reselling blighted properties so that they stay in a blighted state," she said. Corey said he has seen a difference in the working relationship between local governments. "What's different now is that the city and county are actively looking together at properties as opportunities to both create housing and improve neighborhoods. I think they're collaborating more than they were previously," he said.St. Louis County has stepped up its efforts to coordinate with other local government units to put tax-forfeited properties back on the tax rolls. Two Duluth transactions currently in the works attest to that new spirit of collaboration:A parcel of land being assembled for the anticipated construction of a Kwik Trip station near the corner of Boundary Avenue and Highway 2;And an abandoned six-unit apartment building at 20 W. Fifth St. that One Roof Community Housing aims to restore and put back to use.Barbara Hayden, St. Louis County's director of planning and community development, said the county has been reaching out to cities like Duluth when properties become available, rather than just putting them up for auction to the highest bidder"We have a team that's taking a more proactive community development approach to tax-forfeited properties. So our department has been reaching out to communities and making them our partners. It's a new approach by the county, and I think it has really been embraced by the city, and they're working closely with us.In addition to Duluth, Hayden said the county also has renewed efforts to engage other cities in the process, including Eveleth, Chisholm, Hibbing, Virginia, Tower and Ely.Heather Rand, executive director of the Duluth Economic Development Authority, expressed her appreciation."They've been really good at reaching out to Duluth's economic development arm and making us aware of tax-forfeited properties. Then we can assess whether that's something that we view as a strategic economic development opportunity or if we're just going to remain hands-off and let it go to auction. Those are our two options," he said Kwik TripDeveloper Brad Johnson of Lotus Realty Services Inc. said he initially looked for a suitable spot for Kwik Trip in Proctor but came up empty.
Instead, he hit on the Boundary Avenue site, located at the doorstep of both Proctor and Zenith Terrace, a manufactured home park."This sort of an in-between grocery store and gas station for that area," Johnson said.Lotus aims to prepare and grade the site this summer in anticipation of Kwik Trip building there in 2018. DEDA is working to acquire a few tax-forfeited parcels of land from St. Louis County to help assemble the 4.8-acre site."We're just kind of setting the table for Kwik Trip," Johnson told members of DEDA.The project is expected to result in a $5 million investment and the creation of about 25 jobs - 10 full-time and 15 part-time positions."The wonderful part of this transaction is we're getting these properties out of tax-forfeit status, and we're putting them back on the tax roll," Rand said.She said DEDA sometimes can help expedite development by serving as an intermediary, purchasing tax-forfeited land from the county and then selling it to a developer at cost."Those couple of tax-forfeit parcels were really just the last puzzle pieces of a much larger development. It made sense to us to facilitate that transaction so that then this larger project could occur. Whereas if they had gone to auction, who knows if they would have been able to pick them up or not, and it could have just slowed down what we feel ultimately will be a wonderful project for that intersection," Rand said. Six-plexJeff Corey, executive director of One Roof, expects the apartment building at 20 W. Fifth St. will require at least $500,000 to restore."We've been looking at the property with the city and the county for a number of months. It's a solid building, but it needs pretty much a gut rehab on the inside and probably a bunch of things to the exterior as well," he said.But Corey believes the project will be worth the effort."It's in a part of town that we have a lot of interest in making physical improvements to, in terms of housing. It's the sort of project that's big enough that it would be pretty tough for a small landlord to tackle."Hayden said the six-plex fell into disrepair and there were repeated police calls to the property."It's still structurally sound. So we hope that with some investment, we can bring it back, addressing local housing needs and addressing what's now a neighborhood blight," she said.By collaborating with DEDA and the county, Corey said One Roof should be able to achieve a better outcome."The county's historic process of selling these properties at auction on a contract for deed is one where someone would be kind of grabbing the tiger by the tail. So it makes sense that we would come in and make an investment in the property and get it into really great shape so that it can provide quality housing for the community," he said.Hayden explained that the county is working to end what has often been a cycle."We're really focusing on not just reselling blighted properties so that they stay in a blighted state," she said.Corey said he has seen a difference in the working relationship between local governments."What's different now is that the city and county are actively looking together at properties as opportunities to both create housing and improve neighborhoods. I think they're collaborating more than they were previously," he said.

Related Topics: PROCTOR
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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