Mayor: Plan to convert portion of apartments into hotel under legal review

UPDATE: Mayor Emily Larson and Chief Administrative Officer Noah Shuchman have issued the following statements regarding Lincoln Park Flats decision to convert its second floor into a boutique hotel:

Statement from Chief Administrative Officer Noah Schuchman:

“The City of Duluth and DEDA are working with the developer on finding a viable solution in line with the contractual obligations of the development agreement. While the City does not have legal standing to prevent the end of a resident’s lease, we have asked the property owner to stop action on affected residents as an act of good faith as these conversations continue.”

Statement from Mayor Emily Larson:

“As a community we value local investment, local job creation and meeting local housing needs – and we have been working tirelessly for years to add units across Duluth. The possibility of losing units is slippage we really can’t afford as a community. We are focused right now on getting the best possible outcome for Duluthians. Our efforts are focused on working with local developer P &R, who has invested across the community in important and meaningful ways, to keep this building open as a residential apartment building. We need this neighborhood to succeed, we need to keep people housed and we need to protect the public investment we’ve already made. My administration, city staff and City Councilors are working hard to accomplish all of this.”

DULUTH, MN. (Northern News Now) - A apartment building in Duluth is changing its business model and forcing some residents to relocate.

But now, that decision is coming under legal scrutiny by the city.

Last week, residents at the Lincoln Park Flats received a letter from their property manager saying that the second-floor apartments will be converted into short-term rentals.

The letter states that anyone who lives on that floor and wants to renew their lease will have to move to a vacant apartment on another floor.

P&R Properties is the management company for the building and says they are converting the 24 units on the second floor into a ’boutique hotel’ this coming spring.

50 housing units would remain as residential apartments.

Duluth Mayor Emily Larson wrote in an email to city councilors that the decision goes against the agreement P&R properties made with the city.

She wrote, “this is not the project we signed up for when we issued TIF.”

The construction of Lincoln Park Flats was partially funded with tax increment funding, or TIF, in exchange for a guaranteed number of housing units.

Larson wrote that the project is “now under legal review with our counsel.”

In a written statement, P&R properties said in part that they are coming out of a challenging time for building developers and the hotel will give them financial flexibility and stability at the property.

P&R wrote 23 of the remaining residential units will be “Affordable Residential units” and 27 will be “Market-Rate Residential units”.

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