Nearly $4 million investment will rehabilitate East Hillside apartment complex – Reuters

DULUTH — One of Duluth’s most vulnerable structures is getting a new life thanks to a partnership between several local groups. The historic building currently condemned at 621-633 E. Fourth St. in East Hillside will become Brewery Creek Terrace, with funding from Heirloom Property Management, One Roof Community Housing, Superior Choice Credit Union and Essentia Health.

Brewery Creek Terrace will have 21 units, one less than the previous 22. The building will have 16 affordable housing units accessible to households with a median income of 80% or less and five units at market price. The 1899 brownstone building across from Whole Foods Co-op was originally built as seven townhouses.

Heirloom President Mike Schraepfer said the renovation is expected to take about nine months to build and he has racked up a budget of about $3.8 million. Schrapfer purchased the property from One Roof Community Housing as Portland Land Co., LLC for $419,000, according to St. Louis County property records.

The building, which caught fire in November 2021, had received corrective orders for 55 violations found after an inspection in August 2021. Several units were condemned for habitation, but the building is said to be in good general condition despite its external appearance, according to a November 2021 article from the News Tribune. The rest of the building was condemned after the fire due to the lack of utilities.

The property was purchased in 2016 by One Roof Community Housing for $490,000, according to St. Louis County Auditor records. One Roof also purchased the remainder of the block, which included the former Last Chance Liquor and Automotive Lubrication Shop buildings.

Jeff Corey, executive director of One Roof, said that after evaluating plans to redevelop the entire block and demolish the building, it became clear that the building was too expensive to be included in the plans. planes. One Roof will continue with plans to redevelop the rest of the block, where the liquor store and auto lubricant store used to be, to create the 52-unit Brewery Creek Apartments.

“We owned this building that we didn’t quite know what to do with,” Corey said at a press conference outside the building on Friday morning.

Superior Choice Credit Union provided a $2.4 million first mortgage for the project. One Roof and Essentia Health provided an $897,000 equity loan in second position to help renovate the building. Essentia funded $690,000, with One Roof covering the remaining balance.

“It evolved in a few years and it was a long time coming,” Schraepfer said. “Partnerships have evolved and it’s really exciting to finally cross the finish line and start working on it. It’s a big part of our mission as a company in town to improve the community we do. part and that’s a big way we get to do that.”

Brownstone was ranked eighth on the Duluth Preservation Alliance’s 2021 list of the city’s 10 most endangered places.

“I think it’s important for us to recognize today that a building like this, even though it has been a challenge for the community and a challenge for the people who have lived there for a very, very long time, also served a purpose,” Corey said. “And that purpose was, frankly, to give people who don’t have a choice of where to live a place to live. Until we figure out, as a society and a community, how to provide enough housing , we will continue to have problems like this building because there are people who don’t have a lot of choices.”

The Brewery Creek Terrace is an exciting project for Schraepfer, who donated all of Heirloom’s profit margin to complete the project.

“This project is fraught with pitfalls and is incredibly risky for a developer,” he said.

Essentia CEO Dr. David Herman said Essentia is proud to be a partner in the project, which is just blocks from Essentia’s downtown Duluth campus, because safe housing makes a healthy difference in people’s lives. Essentia has already contributed $1.4 million to Brewery Creek apartments.

Tim Foster, CEO and President of Superior Choice Credit Union, said the credit union had been involved in the project from the early planning stages and was happy to help revitalize the block.

“I’m thrilled to be here today, but I think I’ll speak for all of us and say we’re probably more excited to come through here one day and see families living in Mike’s vision,” said Foster.

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