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DULUTH — A notoriously dilapidated downtown Duluth building — once stately turn-of-the-century townhomes — could see new life under a proposal from a local developer and restaurateur.

Pastoret Terrace, its fate tied up in multiple court cases in recent years, would become short-term vacation rentals if Rod Raymond succeeds in financing the estimated $13 million project.

Pastoret and the adjoining Paul Robeson Ballroom at 1st Street and 2nd Avenue E. were most recently home to the Kozy Bar and apartments. Several fires have destroyed much of the property, designed by renowned architect Oliver Traphagen and considered part of Duluth's Commercial Historic District, on the National Register of Historic Places.

"There is a responsibility for some of these works of art," Raymond said. "Whether I do it or not doesn't matter. What matters is we save this building."

Pastoret Terrace has been owned by the Duluth Economic Development Authority since 2016. That's when the city agency acquired the property when previous owner Eric Ringsred forfeited it after failing to pay taxes. In 2018, Ringsred and Respect Starts Here, a Duluth preservation group, filed a lawsuit seeking a stop to the city's demolition plans for the 1887-era Romanesque Revival building.

The Pastoret Terrace with a collapsed roof in 2020.
The Pastoret Terrace with a collapsed roof in 2020.

LHB, Inc.

The city argued that the buildings are blighted safety concerns, while Ringsred said officials didn't consider demolition alternatives. A St. Louis County judge sided with the city, but the Minnesota Court of Appeals overturned his ruling in 2020, ordering the city to make repairs to prevent further deterioration.

A fire later in the year prompted the city to ask the judge to allow the building to be partially torn down. The judge instead ordered the property stabilized, and a trial that would have determined whether the building would come down was set for early July. Both the city and Respect Starts Here agreed to a six-month pause while Raymond explores development, said Miles Ringsred, the attorney representing the preservation group and his father, Eric.

"They are very hopeful that Rod's project will be able to move forward," Miles Ringsred said. "A property with this much significance, this much beauty, can really be the catalyst for development in that neighborhood. … But time is not on the building's side."

Raymond, whose restoration projects include Duluth's Old City Hall, completed with the help of state historic tax credits, hopes to build 21 rental units with kitchenettes while retaining the historic brick exterior. He's still contemplating plans for the ballroom space but said a Black history museum to complement the Clayton Jackson McGhie Memorial across the street is an idea. A masonry expert says the exterior can be saved and estimates the work at less than $1 million, Raymond said. But the sunset of the state's historic structure tax credit program this summer means he'll be asking for government grants and other tax breaks.

If his project comes to fruition, Raymond thinks it would revive the rundown First Street corridor, much the way western Duluth's Lincoln Park neighborhood has been filled with restaurants, tony shops and craft beer.

"It could be a really good business model," said Raymond, who owns the Oliver Inn, Endion Inn and Fitger's Brewhouse, among others.

Pastoret Terrace was originally built as six luxury townhomes. The former Kozy Bar was established in 1960, and 50 apartments had been constructed by the time a major fire occurred in 2010. In recent years, several proposals for the property, including one from Raymond, have been rejected by the city. City documents say the roof on a portion of the Pastoret building is collapsed and open to the elements, and some of the structure is unstable.

City spokesman Phil Jents said the city had no comment on the plans because of the ongoing litigation and the pending request for proposals.