Developer seeks to turn Duluth's Historic Old Central High School into apartments

DULUTH – A St. Louis Park developer wants to renovate one of the city's most iconic buildings, a century-old downtown landmark that has bedeviled officials here for years.

The school board on Tuesday moved one step closer to a deal with Saturday Properties, a boutique development and property management firm that converted the historic Gardner Hardware building in Minneapolis' North Loop into office space and a restaurant.

The company would turn Historic Old Central High School, built in 1892, into mixed-income housing.

"It's one of the most notable, historic buildings in the state," said Mark Laverty, director of development for Saturday Properties. "Every time you drive into Duluth, you see it. Obviously this building needed to be preserved, and we wanted to be a part of that."

Laverty said the company's plans would transform the building into 120 to 140 housing units for a mix of market-rate and income-restricted renters. He added that Saturday Properties' plans would leave the outside of the structure largely untouched and maintain some of the former school feel inside. The atrium where the Duluth school board holds meetings might be turned into a common area.

"There's so few options for new apartments downtown," said Laverty, who noted that the property's proximity to Canal Park and Essentia Health's new hospital also made it an attractive spot for the company's first Duluth venture. "We hope this project will help continue the redevelopment push in the area."

Saturday Properties plans to look at federal and state historic tax credits as a main source of financing, and Laverty expects the company would tap into the benefits associated with the location's Opportunity Zone designation.

Laverty declined to say how much the developer is offering the district for the property and how much they estimate the total project will cost.

The Duluth school board unanimously approved a resolution Tuesday evening directing district administration to enter into a purchase agreement with Saturday Properties for the building, which currently houses the district's administrative offices, as well as its Area Learning Center and Academic Excellence Online programs. An assessment last year said the building would require $48.5 million in repairs in the near future.

The company plans to start public outreach soon to hear community members' thoughts and concerns about the proposed renovation. Saturday Properties is aiming to apply for tax credits by January, start construction in late summer or early fall of 2021 and move in renters by the end of 2022.

"This is one of the most beautiful buildings I have ever seen. In many ways, I would love to be able to stay here," Superintendent John Magas said. "But I think that we need to be thoughtful about the stewardship of the building, making sure that it can be preserved for generations of the future, and we also want to be careful stewards of our district finances."

Revenue from the sale of the building would go into the district's reserve for operating capital fund, which could be used for future construction projects or major purchases.

Historic Old Central served as the city's only high school until 1926 and has been on the market since January. The Romanesque-style brownstone is on local and national historic registers, which affords the building some protection from demolition or drastic changes.

The district stopped using the property as a regular high school in 1971, when a newer Central High School was built. That property, a 77-acre tract on Duluth's hillside, has been listed for sale since 2011.

Magas said it could take up to a year until a sale would be final. During that time, he said the district will look into where it could move its offices and learning programs, possibly to the newer Central High property. It may also consider buying or leasing new space downtown.

Katie Galioto • 612-673-4478