DULUTH - A $4.5 million sale of the West Duluth Spirit Valley Mall, which includes the long-vacant Kmart, is tied up in court over an alleged contract breach.
Minneapolis-based developer First & First sought to buy the 158,000-square-foot property from Chadco of Duluth in part for pickleball courts, according to court records.
The loss of the Kmart in 2018 left a retail hole in West Duluth, with other stores of its kind nearly a 20-minute drive from the neighborhood. The blighted building has since sat empty. Finding the right buyer is a top priority for the city, Mayor Emily Larson said in her State of the City address last spring.
It's a site that "desperately" needs to be redeveloped in a way that connects rather than divides the business district, she said.
Chadco had previously attempted to turn it into a storage facility, which the city Planning Commission denied partly because of its proximity to housing.
A closing date of Jan. 30 passed without a sale to First & First, and both companies blamed the other for varying reasons.
Chadco, owned by longtime area real estate developer Kent Oliver, canceled the purchase agreement in March. First & First sued Chadco alleging a contract breach, and asked the court for a temporary restraining order to stop the cancellation of the sale; a request denied by St. Louis County District Judge Eric Hylden. First & First appealed the District Court's decision, and a hearing was held this week.
Ryan Dreyer, an attorney for First & First, declined to comment on the case. Court records show the company says it needed Chadco to provide certain documents before closing, which it didn't receive.
