The Hacienda del Sol restaurant on East Superior Street closed in 2011. Lake Avenue Restaurant and Bar owners are in the process of buying the property.

Owners of a popular Canal Park restaurant have been working for more than a year to secure the former Hacienda del Sol building in the newly rebranded Downtown Duluth Historic Arts and Theatre Distict.

Lake Avenue Restaurant and Bar owner Mark Swenson said last week his partnership group is working to purchase the long vacant Mexican restaurant at 319 E. Superior St. The group would like to remodel and reopen the building with a kitchen serving Central American inspired cuisine.

Swenson’s partners include Lake Avenue Restaurant and Bar general manager Derek Snyder and Heirloom Property Management owner Michael Schraepfer.

The project has been complicated by court action designed to establish current building ownership.

Hacienda del Sol owner Kevin Deutsch expressed his frustration over recent St. Louis County court action in a letter posted on the restaurant’s Facebook page Oct. 23. Deutsch said North Shore Bank of Commerce recently won a court order to place the building in receivership. The receiver then brought a motion to force a Hacienda del Sol property sale, he said.

“I can only speculate that the bank, developers or other large investment groups are looking to benefit financially from the Hacienda property and crush me and the future of the Hacienda in the process,” wrote Deutsch.

Deutsch vowed to fight the forced sale. He said when the issue works its way through district court he will file a complaint with the Minnesota Court of Appeals.

“What has occurred has been unjust, illegal and just plain wrong,” Deutsch wrote to Perfect Duluth Day. “Dealing with all of this has been devastating emotionally and financially.”

According to the Lake Avenue Restaurant group, the building must undergo appraisal, engineering reports and loan completion before it can change hands.

Schraepfer said the group has a purchase agreement on the property but the deal remains a long way from closing. He said negotiations are continuing with the property receiver.

“We’re looking into the idea but it’s nothing for sure,” he said. “We still have tons and tons of things to figure out.”

Still Swenson said the group is excited about the possibility of owning the Hacienda del Sol property.

“It’s a great building,” he said. “Whenever we went there that back deck was the first place we would go. It was really the first Tex-Mex place in Duluth.”

Hacienda del Sol was established in Downtown Duluth in 1982. Deutsch closed the restaurant after a kitchen fire and resulting sprinkler damage in 2011. He also alleged Sheraton Hotel construction next door damaged the building.

Deutsch attempted to reopen the restaurant in the years following the fire but was unsuccessful.

The new owners are considering some changes to the 106-year-old building. They plan to keep the main floor bar and famous back patio, add more dining space on the second floor and add a side patio on a vacant side lot.

“It’s going to be a totally different restaurant,” said Swenson. “We’re still bouncing around ideas and designs, things like that … It’s just got a lot of potential but it definitely needs a lot of love.”

“Every week ideas change,” said Schraepfer.

Lake Avenue Restaurant opened in Canal Park in 1991. According to its website, Swenson and Snyder purchased the business in 2009, remodeling the property, adding a deck and creating one of the area’s first locally sourced menus.

Swenson said improvements on East Superior Street, recently rebranded as the Historic Arts and Theatre District, played a part in the decision to pursue the Hacienda de Sol downtown property for his group’s second restaurant venture.

“The revitalization of that part of downtown was a key,” he said. “The NorShor is being restored, a lot of the storefronts are being remodeled; I’ve got a feeling there’s kind of a renaissance going on for downtown.”

Greater Downtown Council President Kristi Stokes said she was thrilled to hear about the Hacienda del Sol building plans. She said it shows East Superior Street improvements are gaining momentum.

“I just think there’s been a lot of great energy in the downtown area,” she said. “I think a lot of it has to do with the restoration of the NorShor Theatre.”

Stokes said downtown theaters have been successfully restored in cities like Wausau, Wis. and Fargo, N.D.

“I think that’s creating a true anchor,” she said. “It’s a high profile project going through a restoration and you can see the spin offs coming from it already.”

The shuttering of the Last Place on Earth head shop and plans for Blacklist Artisan Ales to occupy the building is another important step in downtown improvement, she said. Businesses also led an effort to install a lighted Historic Arts and Theater District sign on the downtown parking garage earlier this year.

“That was a grassroots-led effort coming from the businesses and property owners in the district,” said Stokes. “They are creating a strong identity and a new identity downtown and that’s what helps them and helps draw new businesses to the area.”