New high-end Duluth development poised to change low-key neighborhood

DULUTH — Outdoor adventurers will soon have a new western hub in the city, with housing and shops for gear and provisions surrounded by miles of trails.

RiverWest Duluth is more than a dozen years in the making and sits on 27 acres between the St. Louis River and Spirit Mountain, a rare swath of flat, buildable space in the city. A second location of Duluth’s popular Ski Hut, the first retail-only site of Wisconsin cheesemaker Burnett Dairy Cooperative and single-family homes that can double as vacation rentals are all part of the $60 million development.

A public-private partnership made it a reality, said Chad Ronchetti, Duluth’s planning and economic development director, with the city, St. Louis County and state helping with infrastructure that includes a new road, utilities and stoplight. The project plays into longtime city plans for population growth and “a new era of prosperity” in far western Duluth, Ronchetti said.

“When U.S. Steel pulled its operations out, they left a giant void,” he said. “This sets the stage for what West Duluth could become.”

U.S. Steel began shutting down pieces of its Morgan Park complex in 1971, eliminating 2,500 jobs. The subsequent closures of other sections of the plant in 1973 and 1979 meant several hundred more layoffs. It eventually led to shop and school closures as people left the area and the city’s economy tanked. But in recent years new housing has been built riverside and the city has invested heavily in waterfront and inland trail systems. The river itself was designated a National Water Trail in 2020, with 11 loop trails for watercraft. It has undergone millions in cleanup efforts, and the U.S. Steel Superfund site opens this summer for recreation.

Chanhassen-based developer Brad Johnson said he and his local partners were trying to create a “magnet” for western Duluth and have shifted their primary focus from vacation units to also include homes for sale based on the advice of his area real estate agent.

Working in phases, Johnson said he’s planning for 70 total detached townhomes and a hotel. Twenty two- or four-bedroom townhomes are set for daily rental, most already operating. Rates fluctuate, but a four-bedroom over a July weekend is $2,500.

Many of the future houses will likely have single-owner residents who can offer them as vacation rentals. Prices range between $600,000 and $900,000.

Another commercial building is in the works, potentially to house a restaurant and hair and nail salons, among other retail.

The site was once home to the Riverside Golf Club, a nine-hole course that operated in the 1920s through the 1940s. (Plenty of golf balls have been found during digging.) The property is near the Munger Trail and Waabizheshikana, also known as the Marten Trail, connected to a dozen trailheads in all.

The Burnett Dairy Cooperative expects to open in June, offering 100 kinds of cheese, a Mediterranean-style pizza bistro, its signature soft-serve ice cream and assorted groceries and liquor. CEO Matt Winsand said the company chose western Duluth for the $3.5 million investment because of its year-round outdoor amenities and the corridor’s potential for growth. Its rural Burnett County location averages 27,000 visitors a month outside of winter, he said.

The Ski Hut Adventure Center sits across from the base of Spirit Mountain and one of its chalets. The store opened late winter, selling and renting ski, snowboard, bike and paddling equipment. The second location puts the business in the center of all it caters to, with the trails, river access and ski hill.

Lots of Dave Neustel’s younger friends are moving to western Duluth, he said.

“It kind of used to be forgotten about, and now it’s really becoming a focal point,” said Neustel, co-owner of Ski Hut.

The project is among several underway in western Duluth that are not only good for the city’s tax base, but for community building, said City Councilor Janet Kennedy, who represents that part of town.