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DULUTH – The historic, onetime Seaway Hotel will be demolished to make way for new housing in the Lincoln Park neighborhood after a plan to renovate the local landmark fell through.

The Esmond Building, as it is now known, most recently was a low-income housing complex at the corner of W. Superior Street and 20th Avenue W. that a developer planned to remake into mainly market-rate housing. Former residents of the building were moved into the new Garfield Square apartment complex several blocks east last year.

The redevelopment plans ultimately were not feasible, said Jason Hale, the city of Duluth's senior housing developer, but construction on a new building could start as soon as this year.

Merge Urban Development Group is finalizing a deal with the Duluth Housing and Redevelopment Authority (HRA) to buy the property and put up a 42-unit apartment complex with 8,500 square feet of commercial space on the ground level.

"This is the most viable approach," Hale said. "Many would have loved to see that structure saved if possible, but folks want to see something happen with the site."

The HRA intends to demolish the building this year to make way for the development and remove a fire hazard after the copper pipes in the building were stolen, leaving the sprinkler system out of commission.

"We can't go through another winter like that," said HRA Executive Director Jill Keppers. "We'll get the demolition bid out, then Merge can take it from there."

The project would join a suite of new housing in the Lincoln Park Craft District, the business-filled blocks of W. Superior Street that have been revitalized in recent years.

Construction is set to begin this month on the 75-unit Lincoln Park Flats after a former furniture store was demolished to make way for the project this spring.

Across the street from Bent Paddle Brewing Co. is the Enger Lofts, which will see another former furniture store redeveloped into 40 units of housing. Another project in the neighborhood could see a vacant former dairy plant torn down and replaced with a housing complex.

"That's an injection of new residents, new life in the neighborhood, and we're very excited," Hale said. "Construction has also has helped keep our economy from being more impacted than it was in the last year."

The demolition of the Esmond will bring the centurylong history of the building, known as the Seaway Hotel from 1959 to 2014, to an end. The Seaway gained notoriety as a haven for crime, and in 1990 a Duluth police officer was shot and killed there. The HRA updated and rebranded the building several years ago in an attempt to shed that reputation.

A $1.1 million loan from the Minnesota Housing Finance Agency that was used to renovate the Esmond was forgiven in March, allowing new development plans to go ahead.

"We originally did try to keep the building intact," Keppers said. "I'm not opposed to a demolition and rebuild with something that fits the look of the neighborhood and adds retail and three stories of housing. Nothing but good can come of doing this."

Brooks Johnson • 218-491-6496