In 2020, the city of Duluth and a developer entered into a development agreement to construct a 74-unit apartment building at the old Robert’s Furniture site in Lincoln Park. A significant number of the units (23) were to be retained as affordable for moderate-income households. In exchange, the city would provide a $2.35 million subsidy through tax increment financing, or TIF. In addition, the project received a $134,946 grant from the state of Minnesota and a variance to allow parking on the ground floor.
But now the current property owners want to convert an entire floor (24 units) to a boutique hotel, not residential housing as had been agreed upon. In news reports, the owners said the change offers financial flexibility and stability in a challenging time for developers (“ Residents to make way for vacationers at subsidized Duluth housing development ,” March 28).
While this may be true, the change would undermine the premises upon which the significant TIF subsidy, the state grant, and the variance from parking regulations were agreed to: 74 housing units. Let’s understand that retaining 23 units as “affordable” likely would not reduce potential revenues to the project because “market” and “affordable” rents for studio apartments in Duluth are similar.
Clearly, this company wants to have its cake and eat it, too. The city must now decide if it will just look the other way and continue a pattern of gentrification in Lincoln Park. Or will the city renegotiate the developer’s agreement with a significant reduction or elimination of the TIF subsidy?
Let’s do the right thing, Duluth.
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Mark A. Baker
Duluth
The writer has worked at a regional planning agency, for an affordable housing development organization, as a city administrator, and as a planning consultant. He has a bachelor's degree in political science and urban studies from the University of Minnesota Duluth and a graduate degree in community planning and public administration from North Dakota State University.
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