Duluth finds the right formula: Natural beauty, strong workforce brings the businesses

A rendering of the new Maurices headquarters planned for downtown Duluth.

A rendering of the new Maurices headquarters planned for downtown Duluth.

by Dan Rafter

Don Ness has been serving as the mayor of Duluth since 2007, when he won election among a field of 12 candidates. Four years later, Ness was popular enough to become the first mayor of this Minnesota city to run unopposed.

This year, Ness is serving his last as Duluth’s mayor, as his second term in office comes to an end. He’s seen Duluth grow, from a town that people visited and left to one that is attracting a steady stream of new residents and companies.

Ness considers this to be the biggest change to hit Duluth during his time as mayor. The city — with a population over 86,000, according to the U.S. Census Bureau — is no longer just an industrial town. Today, it is a full-fledged business hub, attracting tech companies, medical providers, law firms and companies of all kind.

At the same time, downtown Duluth, like many Midwest downtowns, is attracting new residents in growing numbers, people who want to experience urban living. They want to walk to restaurants, shops and entertainment venues. In downtown Duluth, they can do this.

So as Ness prepares to leave office, he’s happy, with both the present in Duluth and what he predicts will be its future.

“I am so excited about the interest we’ve seen companies take in Duluth,” Ness said. “And it’s exciting to see the number of people who want to live here today. Young people are interested in living in a community like Duluth that has a strong sense of place, a strong sense of vision, a unique place with unique opportunities. Duluth provides that.”

duluth -- downtownDuluth has a historic downtown. Sitting on Lake Superior, it boasts rare natural beauty. Outdoor recreation is a priority here, with the planned Duluth Traverse Trail System expected to bring a 100-mile single-track mountain bike trail to the city by 2017.

“Young professionals love these kinds of amenities,” Ness said. “They attract them.”

A growing city

How popular is Duluth becoming among young professionals? According to the most recent information from the Census Bureau, the 25- to 34-year-old demographic here has grown by nearly 25 percent in the last five years.

And, as Ness says, these are not college students who arrive in Duluth for class and then leave the city once they graduate. These are young people who are coming to Duluth in steady numbers to live and work.

“They like the energy of what is happening here,” Ness said. “Employers are seeing that. The employers want to be in a place like Duluth that attracts the talent they are seeking.”

Chris Eng, director of business and economic development, says that Duluth’s hot streak is no simple fad. The city has positioned itself to succeed on a long-term basis, Eng said.

“Over the last couple of decades, Duluth has been known as an industrial town, one that has been stagnant or even in decline in some areas,” Eng said. “But that’s not the case. That narrative overlooks all the new development activities that are taking place here. The mayor has been successful in promoting Duluth as a good place to raise a family or start a business in or invest in.”

Once Ness started selling Duluth, officials here realized a truth: It wasn’t a hard sell.

Eng says that Duluth can offer benefits that few other cities can. As Eng says, on a Tuesday afternoon at 4:30 p.m., you can be sailing on the lake. If you’d rather ski or snowboard, you can be on the slopes. If you like to ride mountain bikes, you can be riding along one of Duluth’s trails.

“If you want to get out and enjoy nature, it is all right here,” Eng said. “There is no long commute to get to the lake or the slopes. You come home from work, change and head out. Not many places in the United States can say that. That is an opportunity, right here in Duluth.”

A growing business community

The recreational amenities are top attractions here. But what makes Duluth’s growth truly sustainable is the commitment that both new and existing companies are making to the city.

Clothing retailer Maurices is making what might be the most important current investment in Duluth. The company is building a new headquarters building here, one that will stand 11 stories, take up an entire city block and comprise 200,000 square feet when done.

The new office building, at 425 W. Superior St. in downtown, could hold up to 600 employees. Demolition work on the former KDLH and Palladio buildings took place last year, making way for construction of the new Maurices headquarters building, which planners hope to complete in December of this year.

“We are so proud to be building our new headquarters in downtown Duluth, where we have been for 80 years,” said George Goldfarb, president of Maurices, in a written statement.

Currently, Maurices occupies about 150,000 square feet in three downtown Duluth buildings.

There’s also BlueStone Commons development. In 2013, this development across the street from the campus of the University of Minnesota Duluth opened with a 99-unit apartment complex, BlueStone Lofts. In 2014, the development added a retail portion, the Shops at BlueStone.

In 2015, developers plan to add six new shops here and begin construction on 120 new apartment units.

Harbor Bay Real Estate Developers is also making an investment here, announcing plans last year for a $36 million mixed-use luxury multi-family and retail project on London Road and 21st Ave. E near downtown. Construction is expected to start soon on the project’s 148-unit apartment building, a project that Ness says will bring some relief to people searching for new rentals in the city.

Aviation manufacturer AAR Corp. has also made a commitment to Duluth. The company in 2014 reached an agreement with Air Canada to keep that carriers’ Airbus narrowbody heavy maintenance work at AAR’s Duluth overhaul base through late 2017. AAR opened a fourth line to boost its capacity at the facility.

Ness says that he’s not surprised that businesses such as Maurices are making such a big commitment to Duluth.

“Having their headquarters in Duluth allows Maurices to find high-quality, dedicated employees,” Ness said. “The same reason has kept AAR here. AAR selected Duluth because of our ability to deliver on their workforce needs. We made a strong case that AAR’s mechanics — who are highly skilled and could punch their tickets anywhere — would want to live in Duluth and have access to the outdoor recreation and natural beauty here.”

This entry was posted in industrial real estate, Minneapolis commercial real estate, Minnesota real estate, multi-family, office, retail and tagged , , , , , , , , , , . Bookmark the permalink.

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