Duluth woos developers to reinvigorate neglected areas

About 50 people in the property development business gathered at the Radisson Hotel on Friday morning to hear city staff make the case for investing in Duluth.

About 50 people in the property development business gathered at the Radisson Hotel on Friday morning to hear city staff make the case for investing in Duluth.

The turnout was substantially stronger than at a similar event city leaders had organized in the Twin Cities suburb of Golden Valley last year to pitch development in Duluth to real estate dealmakers, according to Chris Eng, the city's director of business and economic development. The outreach is part of the city's ongoing effort to draw new players to Duluth's development scene.

Eng said interest in Duluth is growing, noting the city has attracted about $2.2 billion in new development in the past decade.

Mayor Don Ness acknowledged many people's perception of Duluth in the past was far from conducive to investment.

"Duluth for many decades was seen as a place that was trapped in the downward spiral of a post-industrial Rust Belt city, and for many years that was our reality," he said. "In the early '80s, we were considered one of the 10 most distressed cities in the nation, with an unemployment rate near 20 percent.


"But because of the leadership of folks in the '80s and '90s, we've turned our attention to the lake. We've redefined our region's and our city's economy. And that was the foundation for a hard-earned stability," Ness said.

In its most recent decade, Ness said Duluth has built upon that stability to change public perception.

Ness said development in the state should not be viewed as a zero-sum game "as if when Mankato, Rochester and St. Cloud are doing well, that must mean Duluth is falling behind."

Ness acknowledged that much of Duluth's most significant growth occurred between 1910 and 1950, followed by a period of relative stagnation.

But a strengthening local economy after years of inactivity has resulted in a city ripe for development in the real-estate market, he said.

"We're seeing the private sector looking at Duluth with new eyes and saying, 'Yes, this is an older community that has gone through some struggles,' but that is providing opportunity because there is this pent-up demand that is only now beginning to come to fruition," he said.

Ness said Duluth presents certain challenges as a city that's already largely built-out and mostly is in need of redevelopment.

"That is the key to Duluth's story right now," he said. "It's not the type of exciting growth we see in places like Rochester, which is a smaller community that continues to expand. It's a redevelopment story. It's a story of refreshing our built environment. And while that is a different story, it is a story that we're taking pride in, and it reflects our reality.


"So we have beautiful historic buildings. Let's invest in them," Ness said. "We have industrial sites that have been neglected for many years and have environmental damage. Let's invest in those brownfields. Let's invest in those Superfund sites, breathe new life into them and provide opportunity to have quality industrial sites on the waterfront and make those centers for job expansion once again."

Duluth has a wealth of experience helping developers access site assessment, cleanup and redevelopment funds, said Heidi Timm-Bijold, business resources manager for the city.

"We have the expertise to get projects done," she said. "But sometimes it takes a developer who has guts."

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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