Adam Fulton, Deputy Director of Planning & Economic Development for the City of Duluth, sent the following memo to Duluth City Councilors on Monday morning:
“There have been several correspondence items to Council related to the referenced resolution over the weekend. I wanted to provide some clarification to the actions of the proposed resolution. Please reach out if you have an interest in discussing it further.
· The proposed Resolution 21-0584 would ratify a development agreement between DEDA and a developer for the site at 2001 West Superior Street, formerly the “Seaway Hotel” and “Esmond building”, currently owned by the Duluth HRA.
· DEDA approved entering into this agreement after significant collaboration with the Duluth HRA and its development partner, Merge Properties. The development agreement provides for TIF financing to support eligible costs associated with the site’s redevelopment, and for the developer to set rents to be affordable for not less than 40 units at the site to people earning an income at or below 80% of the area median income.
· The current owner, Duluth HRA, purchased the building when it was at risk of immediate condemnation several years ago, and conducted short-term rehab to avoid eviction and displacement for residents. Since that time, Duluth HRA has sought to identify a development partner who could preserve the building.
. The current structure has not been deemed historic and is not eligible for historic tax credits, either state or federal.
· The redevelopment of this site (which is Phase 3) is part of a three-phase plan by the City of Duluth, the Duluth HRA, and DEDA:
o Phase 1: Stabilize the Seaway/Esmond property and provide property management services and access to social services to existing tenants (completed 2015)
o Phase 2: Construct replacement housing for Seaway/Esmond residents within the neighborhood (50-unit Garfield square apartments by Center City Housing, completed 2019)
o Phase 3: Evaluate and proceed with redevelopment of the Esmond site
· At completion of this project by Merge LLC, the 63 unit Single Room Occupancy building at the Seaway/Esmond will have been replaced by a total of 90 affordable units – 50 at Garfield square, and 40 at the Merge LLC development site.
· The Esmond/Seaway building is currently vacant. Even if the Merge, LLC project were to not proceed, the Duluth HRA may elect to raze the structure to avoid potential blight or safety concerns in the absence of a project as the owner. It is not designated as historic, either locally, or at the state or federal level.