Oft-delayed residential high-rise in downtown Duluth is back on again

DULUTH – Downtown Duluth's largest residential project is again moving forward after several delays kept the 15-story apartment tower from rising on schedule.

The 200-unit complex, with commercial space planned on the street level and second floor, is poised to replace the Voyageur Lakewalk Inn and two other vacant buildings at the corner of E. Superior Street and E. Fourth Avenue.

Northstar Development Interests LLC recently submitted an environmental assessment to city officials in anticipation of beginning work later this year.

"The demolition, site preparation and construction are anticipated to start in the fall of 2021, after all approvals are in place," the company wrote in planning documents.

The cost was last estimated at about $75 million. The city of Duluth has approved $6.2 million in tax-increment financing over 25 years.

"The project site is in an area that provides access to health, social services, other goods and services, public transportation and employment opportunities," Northstar wrote. "The proximity to these opportunities helps to meet housing strategies outlined" in the city's long-term land-use plan.

An amended project agreement said construction must be complete by June 30, 2024. Construction was previously required to start by the end of 2019 and was again delayed from an April 30, 2020, start date as financing delays and "uncertain market conditions" got in the way, the company told the city.

"The hope would be to coordinate with developers — they would need access to the street for footings and utilities," said Adam Fulton, the city's deputy director for planning and economic development.

In addition to 200 apartment units, three townhouses with their own parking spaces are included in the updated plans. A nearby parking garage will be used by other residents and retail customers.

A grocery store has been floated as the ideal tenant for the 16,000-square-foot commercial space on the ground floor. Another 1,200-square-foot retail space is planned on Superior Street and a 3,000-square-foot commercial space is planned for the second floor.

The second floor — accessible from the alley due to the slope of the hill — also boasts a tree-lined courtyard for residents and a loading dock to serve retail users. Northstar wrote that traffic in the area is "not expected to increase dramatically after the project is complete."

Like the new Essentia Health clinic and hospital tower under construction across the street, the structure will be covered in glass and will be among the city's tallest buildings, remaking the skyline on the east side of downtown.

Developers said they are establishing a plan for asbestos in the buildings set to be demolished as well as proper handling of material below the Voyageur Lakewalk Inn that has "the potential to contain hazardous material" due to an oil leak from historic underground tanks.

The two vacant buildings beside the hotel are "contributing features" to the Duluth Commercial Historic District, Northstar wrote, though neither the former Hacienda del Sol restaurant nor the former Duluth Oriental Grocery are themselves designated as historic structures. The century-old buildings are "a safety risk to the community and potential fire hazard for the surrounding district," developers wrote.