See more of the story

DULUTH - Essentia Health expects to begin demolition of its century-old former hospital next summer.

The Duluth City Council approved a development agreement with the Duluth-based health system Monday night, allowing Essentia to seek bids for the massive downtown project.

The state set aside about $11.8 million to pay for it as part of a larger investment in the city's growing medical district.

Whether it's demolished via controlled explosions, mechanically or a combination of the two, isn't yet known. That will be determined with the city of Duluth and contractors, said Louie St. George, Essentia's external communication director.

The tear-down should be complete by the end of 2025 and any costs over the state-granted amount must be paid by Essentia. Grass will be planted on the East Third Street property until its re-use is decided.

The University of Minnesota has said it is planning a new academic health care center in downtown Duluth, expanding its Duluth campus' medical and pharmacy programs. Essentia is hoping the U will choose to build on the former hospital site. Neighboring St. Luke's hospital, also making major investments to its downtown campus, is vying for the project to be built on its land.

The former Essentia hospital's high operating and maintenance costs, including those for heating, cooling, electrical and plumbing systems, played into the decision to demolish it. Those costs rendered renovating or repurposing the building impractical, Essentia officials have said.

The oldest part of the city's largest hospital, which spans multiple blocks, was completed more than 100 years ago.

Essentia's new hospital tower and clinic space, a $915 million project four years in the making, is several stories taller than the former hospital, but has a smaller footprint. The 942,000-square-foot structure began serving patients July 30.