Affordable housing planned for troubled Duluth brownstone

DULUTH - A long-blighted housing complex in Duluth's Medical District will be renovated, becoming the fourth housing project for underserved groups planned in the span of a few blocks.

The condemned Fourth Street brownstone townhomes, built in 1899 and owned by One Roof Community Housing since 2017, experienced a fire in recent months and violated dozens of city codes. The nonprofit affordable housing organization had long planned to develop the entire upper side of the 600 block but found the project too large to manage. It was further constrained by the pandemic.

A partnership with Duluth-based Essentia Health helped secure a sale of the brownstones to locally owned Heirloom Properties, which plans to rehabilitate the building into 21 units, most of them affordable, it announced Friday. Sixteen of the units will be available to households at or below 80% of the area median income, with completion expected next summer.

"This isn't how we envisioned this going forward ... but we are really excited to see this block transformed," said Jeff Corey, executive director of One Roof, speaking at a news conference. "It's been a disinvested chunk of the neighborhood for a long time."

Heirloom properties secured a $2.4 million loan from Superior Choice Credit Union for the $3.8 million project, and Essentia Health loaned $690,000. The rest is covered by Heirloom and One Roof.

Saving condemned buildings is part of Heirloom's mission, said its president, Mike Schraepfer.

It's a "risky" project, he said, "but it's needed for the city."

The complex, to be called Brewery Creek Terrace, sits next to the site of another housing project, Brewery Creek Apartments. One Roof is behind that project, which will offer 52 units of affordable housing. A few blocks west, senior housing and a child care center are planned by One Roof. Essentia is involved financially in both. One block to the east, low-income senior housing is planned by a Minneapolis developer. If all come to fruition, more than 250 new apartments will be available along that corridor of the city's Medical District.

Essentia CEO Dr. David Herman said the health care system contributes to housing because "it's a keystone to the health of a community."

"We know if you don't have housing, the likelihood you will get the diet you need, the exercise you need and the care you need is very small," he said.

Corey said the brownstone has been a "challenge" for the community and its residents, but it also served a purpose.

"That purpose was, frankly, to give people who don't have any choices of where to live a place to live," he said. "And until we figure out as a society ... how to provide enough housing, we will continue to have problems like this building. We are really happy to save this housing."