Court to decide Kozy's fate
Typically, the burden of proof in most lawsuits rests with the plaintiff, but in his closing argument as an attorney representing Respect Starts Here, a preservation-minded organization, Miles Ringsred attempted to turn the tables Thursday.
He said the defendant in his client's suit — the Duluth Economic Development Authority — must prove there is no feasible alternative to demolition if it is to proceed with its plans to tear down the Robeson Ballroom and the adjoining Pastoret Terrace, formerly home to the Kozy Bar. In making that case, Ringsred pointed to the protections afforded to historically significant buildings under the Minnesota Environmental Resources Act.
Assistant City Attorney Elizabeth Sellers said DEDA agrees preserving historically significant buildings should be considered a "paramount concern."
"But the important point here is that there is no prudent and feasible alternative that's consistent with public health and safety concerns," she said.
DEDA acquired the fire-damaged property at 125-129 E. First St., after the buildings' former owner, Eric Ringsred, lost control of the structures through tax forfeiture in 2016.
Since then, Sellers said DEDA has demonstrated good faith in its efforts to save the buildings, reaching out to both the Minnesota State Historical Preservation Office and the Duluth Heritage Preservation Commission in search of potential redevelopment partners.
She also pointed to the request for proposals notice DEDA issued.
"The RFP process is a process DEDA has used in numerous other cases. It's a process that generally works," she said.
But Sellers said several prospective developers who initially showed interest in the project dropped out. "Once they saw the condition it (the property) was in, they lost interest," she said.
Ultimately, DEDA received just three development proposals for the Pastoret and Robeson Ballroom, all of which it rejected.
Eric Ringsred pointed to testimony provided by Keith Hamre, Duluth's director of planning and economic development, that DEDA's decision not to take on the task of rehabilitating the property itself was driven largely by cost concerns. But Ringsred noted that the Minnesota Environmental Resources Act forbids the destruction of public resources for economic considerations alone.
Miles Ringsred, Eric's son, said Minnesota law sets "an extremely high standard" for the destruction of historic buildings and suggested: "The defendants have fallen far short of this standard."
He also asserted that, "As a public subdivision, DEDA has an even greater duty than a private party to demonstrate 'paramount concern' for the protection of this public resource."
Sellers said the property, as it sits today, poses a public safety threat, due to its deteriorating condition, the risk of falling bricks, squatters who continue to break into buildings and the dumping of trash on the premises.
"DEDA has tried for years to find a suitable alternative to demolition," she said. "There isn't one, and DEDA should be allowed to move forward."
Eric Ringsred said both DEDA and Respect Starts Here agree that continued inaction is not an option. But they differ on what the next step should be. Where DEDA calls for the property's destruction, Ringsred called on Judge Eric Hylden to order DEDA to fix the building's roof, restore utilities to the property and to begin working toward its rehabilitation.
Ringsred has supported the efforts of Pastoret LLC, a development group he helped organize in hopes of saving the property and that submitted a proposal to redevelop Pastoret Terrace into a 40-unit apartment building at an estimated cost of $10.4 million.
DEDA rejected that proposal for good reason, according to Sellers.
While Pastoret LLC has lined up more than $3 million in historic preservation tax credits, she noted it has twice sought and twice failed to obtain the low-income housing tax credits it needs to fund the project.
Given the condition of the property, Sellers said DEDA could not afford to take the risk of proceeding with a project that might not be completed.
"The plaintiffs are advocating an alternative that they couldn't get done in three years of trying," she said.
Eric Ringsred said that after going to great lengths to acquire the Pastoret property, DEDA has taken a selectively defeatist approach to its preservation. He said it reminded him of a Russian proverb: "The church is near, but the road is all ice. The tavern is far, so we'll have to walk carefully."
Sellers suggested Ringsred bears much responsibility for the current state of the Pastoret. She noted that he had sold the NorShor Theatre and Temple Opera property to DEDA for $2.6 million in 2010 but had done little to fix up the Pastoret.
She cited Ringsred's testimony Wednesday that he had decided not to insure the Pastoret property against fire damage because of his faith in a fire alarm system he had installed there. Sellers noted that he also failed to pay taxes on the property.
"The plaintiff allowed this resource to fall into extreme disrepair, and now he's trying to impose on the public a $10.4 million project," she said.
Hylden plans to tour the property in a couple weeks. Attorneys will have until May 30 to file briefs and responses, before he rules on the case.