DULUTH — The developer of a 45-unit apartment building on the site of the former Seaway Hotel recently received what is apt to be its final extension to complete the project.
Under the terms of a revised development agreement passed by the Duluth Economic Development Authority last week, Merge Urban Development Group will now be expected to have Urbane 218 — the apartment complex it is building at 2011 W. Superior St. — ready for occupancy by the end of October.
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Merge, based in Cedar Falls, Iowa, has encountered repeated financial setbacks since it commenced work on the project, leaving the half-built structure to languish in the elements.
Brent Dahlstrom,, one of Merge’s managing partners, assured DEDA commissioners Wednesday the building has passed muster during recent inspections, setting the stage for the project’s completion in the coming months.
Likewise, Dahlstrom reported that the funding needed to see the project through has been secured.
“We’re excited about the progress that’s been made since we’ve been back on site,” he said, noting that more than 30 workers were on the job Wednesday. Dahlstrom said most of the masonry work on the exterior is now complete and work has been shifting to the interior.
Despite previous delays, he expressed confidence Merge will be able to adhere to the newly prescribed timeline, bringing needed affordable housing units to Duluth’s Lincoln Park neighborhood.
“We love the neighborhood. We love Duluth, and we’re excited to put the past behind so we can move forward,” Dahlstrom said.
As for progress on Urbane 218, DEDA Commissioner and Duluth City Councilor Arik Forsman said he believes "the best outcome for the city is to see this project completed.”
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But he questioned previous plans to partner with Merge on a proposed larger 80-unit project near the Wheeler Athletic Complex.
Tricia Hobbs, the authority’s interim director, said city staff continue to consult with Merge but are also exploring other options for the property.
DEDA notified Merge in August that it was in breach of contract, but Hobbs said staff has worked hard with the firm since then to get the project back on track.
“We’ve had a lot of really good conversations, and we feel confident about the terms that are now being put forth,” she said.
Forsman asked Dahlstrom if he was comfortable with DEDA holding Merge to the terms of the proposed agreement and shifting direction if the prescribed milestones are not met. He likened the situation to the final extension DEDA offered the developer of the repeatedly delayed Lakeview 333 project at 333 E. Superior St.
Dahlstrom consented but with a bit of a cautious disclaimer. “I think that, outside of things that we can’t control, we’re confident in the Oct. 31 date," he said. "That being said, many things often happen that are unplanned.”
Urbane 218 received help in the form of a $1 million in the form of a Housing Trust Fund Loan and another $800,000 in federal aid. However, in previous correspondence with the city, Dahlstrom indicated that Merge would have $4.9 million of its own funds invested in the project.
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Forsman also asked if Merge had entered a project labor agreement, promising to use only workers being paid prevailing wages in return for a pledge that local organized labor organizations would not seek to picket or delay the project.
Dahlstrom confirmed Merge had complied on that count, too.
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