Developer wants to convert old Duluth jail into office space

At least two bids were rejected because the bidders lacked the experience or finances to redevelop the jail.

So what does one do with an old but historic jail that has sat neglected for 15 years?

Blue Limit, a Minneapolis-based real estate and brokerage company, has bid $54,000 for the old St. Louis County Jail, and its bid is moving toward a likely St. Louis County Board vote next week.

Blue Limit owner Grant Carlson wants to convert the jail into office space and a conference center.

Carlson is a 27-year old real estate broker with an architect's degree who has a history of restoring buildings and a family ready and willing to back him up.

"It's really the highest and best use for the building," he said.


He also wants to keep a portion of the cell system intact to maintain the building's historic significance. Keeping some of the cells will allow him to seek preservation grants and subsidies for the project.

"We're coming in as optimists," Carlson said. "There's enough potential revolving around the building and the community that we are excited about it. We're feeling good about it."

"It will make sense and it will happen," said his father, Clint Carlson of Minneapolis, who is also involved in the project. "He's looking for cooperation from the city, county and the community."

County officials say the bid is the first bona fide offer they've received. At least two bids were rejected because the bidders lacked the experience or finances to redevelop the jail.

"He's done it before," Clint Carlson said of his son. "He has successful projects in downtown Minneapolis and downtown Fargo. His brother's also an architect. This is a family business doing this kind of thing."

Negotiations that began last month led to the purchase agreement in which Jail Holding LLC would buy the jail "as is" for $6,000 less that the $60,000 appraised value. Carlson set up the holding company specifically for the purchase and ownership of the jail.

"Sometimes government moving slowly pays off," said County Administrator Kevin Gray who called it a win-win for everybody. "I hope to see the building restored and put back on the tax rolls."

The county had sought to demolish the 1924 jail, though it has local landmark status as part of Duluth's Civic Center complex. But the Duluth City Council said the county would have to try harder to sell the building before a demolition permit would be issued.


Carlson wasn't in Hibbing today when the St. Louis County Board moved the sale out of committee toward a vote next week. But he'll be at the board's meeting March 2 when the sale is discussed.

According to the purchase agreement, $6,000 earnest money was posted, so $48,000 would be paid at closing on April 16. The county would pay $2,500 toward closing costs and $50,000 toward reconnecting utilities. The buyer will pay all real estate taxes and special assessments.

Carlson has until 11:59 p.m. April 15 to back out.

"Hallelujah, we're getting close," said Commissioner Chris Dahlberg. "I'm excited about this, but there are some things we have to look at."

Deputy County Administrator Gary Eckenberg was optimistic that the sale would be approved. Calling it a "clean sale," he said the county wouldn't have to do anything except get its stuff out and give the new owners the keys.

But Commissioner Peg Sweeney was critical.

"We're getting nothing out of this," she said. "This is costing us money. I understand we are preserving this building, but at what cost to the taxpayers?"

By selling the jail, the county would avoid demolition costs that are now estimated at $300,000, Commissioner Steve Raukar pointed out.


One term of the agreement -- allowing the buyer use of the tunnel between the jail and courthouse across the street during the daytime when the courthouse is open -- raised liability and maintenance concerns among several commissioners.

But Tony Mancuso, county property manager, said the details of the easement are yet to be worked out. The use of the tunnel would connect users of the jail building to the courthouse and the rest of downtown through the Skywalk system.

"We're excited," Carlson said. "Duluth has a lot of potential. We're excited to be working with the community of Duluth, especially downtown Duluth."

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