Construction begins on Duluth’s ‘newest neighborhood,’ at scenic former high school site

DULUTH – New York-based developer Luzy Ostreicher chose Duluth to build what’s been called the city’s second largest private investment because of what he glimpsed on a first visit eight years ago.

Not only did he see a market and potential, he said, but “people who are community-minded, who are really engraved in their heritage.”

Ostreicher and his family broke ground Tuesday on the Incline Village development, after they gifted a Hanukkah menorah to the city. Ostreicher, who practices Orthodox Judaism, used it to illustrate his journey in Duluth and reasons for investing here.

The project is touted by his representatives as the city’s newest neighborhood, and sits on a panoramic site overlooking Lake Superior that is expected to finally fill the void left by the closure of the former Central High School.

The vision for the hillside site is a $450 million to $500 million investment that includes 1,180 apartments among several buildings, 120 condominiums, retail and several public spaces, including a pavilion and trail connections. The market-rate housing is to be built in three phases over seven to 10 years. A 70-unit condominium building with prime views at the front of the property is up first, and should be completed in 2026.

One of Ostreicher’s previous projects includes 700 condos in Spring Valley, N.Y. He also owns Duluth’s Endi and Kenwood Village apartment and retail complexes, although he didn’t develop the properties. Those investments and others total $85 million. Ostreicher’s company bought 53 acres of the hillside property for $8 million from the Duluth school district in 2022. The 50-year-old school was demolished that year after sitting empty since 2011.

At the groundbreaking event, Mayor Roger Reinert said the project will provided much-needed market-rate housing and bring new residents to town.

“Duluthians with some gray hair know that trying to find the right development on this site has taken some time,” he said, “and the site itself was part of that challenge.”

Ledge rock is abundant at 800 E. Central Entrance, and has deterred other developers. Construction management firm ICS is representing Ostreicher in Duluth. Jeff Schiltz, an executive with the company, said the groundbreaking was pushed from summer due to delays in obtaining financing stemming from economic uncertainties and increased construction costs, along with site studies done to minimize blasting and rock removal. The city granted a couple of extensions to agreement stipulations, but earth work will begin this week, he said, and the site will be ready for foundations by spring. Local architects and construction firms have signed on.

The project’s first phase will receive $75 million in redevelopment tax increment financing (TIF) from the city, intended to pay Ostreicher back for infrastructure such as utility connections. Subsequent TIF districts, one needed for each phase, still need to be approved.

The multibuilding project underwent an Alternative Urban Areawide Review to study how different development scenarios will affect the environment. It was approved last spring.

Jordan DeCaro, a real estate agent who is a graduate of the last Central High School class, is marketing the first condos to be built. A one-bedroom lists for $650,000 and two-bedroom for $850,000. The rest of the first phase, which will include 220 apartments and retail sites, should be complete in 2029.