The Spirit Valley business district sits just east of I-35 and includes a variety of businesses along Grand and Central avenues including the Super One grocery store in the foreground. (Photo by Cory Fechner, Liftoff Aerials)

The Spirit Valley business district in West Duluth took a serious hit in 2018 when Kmart closed but business leaders and city officials believe the area is ripe for a makeover that could match successful redevelopment work in Lincoln Park.

West Duluth — with its Spirit Valley Mall, Super One Foods, Menards and surrounding small businesses — has long generated the second-largest retail sales numbers in the city, trailing only the Miller Hill area. The neighborhod not only serves local residents but also communities to the west and south and is a first contact point for tourists traversing I-35 for a North Shore visit.

Duluth city officials said any changes to the Spirit Valley business district need to be done right.

“It’s a prime spot. I-35 is kind of a gateway to Duluth, so there are a lot of things going for it,” said city of Duluth Senior Business Developer Jason Hale. “We just need to better understand what (the developer’s) desire is and what they’re willing to partner in.”

Hale said the area could use a “shot in the arm” to stimulate retail and commercial interests along Grand Avenue. The city is meeting with area property owners and business leaders, including current Kmart property owners, to discuss redevelopment ideas.

The Kmart store adjacent to the Spirit Valley Mall closed its doors for good this past fall.

Sears Holdings announced it would close the West Duluth Kmart and Miller Hill Sears store last spring. The 86,000-square-foot Kmart building is for sale with an asking price of $4 million. It’s owned by Chadco of Duluth LLC and managed by Oliver Management Services. The pair also own and manage the adjacent Spirit Valley Mall property.

Oliver Management Services Manager Brittany Oliver said there have been discussions about future Kmart property plans but did not elaborate on details.

Hale said any Kmart building ownership or use changes would be a good time to address area improvements.

“We think a mixed use, including some residential in that pocket, would be really great,” he said. “It’s next to a bunch of services, a bunch of commercial opportunities, so that’s something we’re hoping to support in concert with the owner.”

Hale said the city hopes the West Duluth business community will help stimulate Spirit Valley redevelopment like West End business leaders helped change Lincoln Park. “You need people who have a vision and faith in the neighborhood and are willing to take risks and put themselves out there,” he said. “There’s some of that happening, it’s just not as concentrated as Lincoln Park.”

State Farm insurance agent Susan Coen, president of the West Duluth Business Club, said Lincoln Park successfully rebranded itself as a “craft district” less than five years ago. Local brewers, specialty restaurants, artists and skilled manufacturers gathered in the struggling neighborhood and ignited new businesses growth. Lincoln Park has become so popular, said Coen, it’s running out of affordable real estate which means redevelopment could start pushing farther west.

Coen said Spirit Valley should focus its branding on its reputation as a retail and service destination. “The way I see it is, this is going to become more of the market district,” she said.

Spirit Valley has a strong small-business base that includes hair stylists, bankers, accountants, antique stores, a book store and a bike shop. It also has a diverse stock of small, older buildings well suited for independent stores and professional service providers.

The vacant Kmart building offers space for a new, large retailer.

“I see it as an opportunity to become the market shop of West Duluth,” she said. “A more specialty market.”

Coen said a smaller national chain store, like Trader Joe’s grocery or a Shopko neighborhood store, could utilize part of the Kmart building. These stores would offer specialized selection rather than a large variety and fit nicely with the surrounding businesses.

“So that’s where I see us as becoming more of a little area where you go to a market versus a craft store in Lincoln Park,” she said. “We would offer things that are more of a specialty.”

Coen said small businesses have good, affordable opportunities to either start or expand along Grand and Central avenues where many buildings are currently for sale.

The old Bridgeman’s restaurant on Grand Avenue recently changed hands. An architect purchased the property and plans to open offices in the building.

For example, a new owner has taken over the former Bridgeman’s restaurant at 5517 Grand Avenue. Mark Melhus of Melhus Management said an architect purchased the space and has started office renovations.

GFX Graphics, a motorsport vehicle custom decal maker, recently opened at 5831 Grand Ave., expanding its business from a downtown location.

The West Theater renovation at 319 N. Central Ave., originally slated to open in 2017, remains a work in progress. Major interior renovations and a marquee installation started in 2018. Owner Robert Boone expects the multi-use theater to open in 2019.

Renea Johnson closed RJ’s Coffee Den in November after a five-year run at 330 N. 57th Ave. W. The 1,100-square-foot building constructed in 1913 for Duluth Water and Light sits adjacent to the Kom-on-Inn Bar and is zoned for fast-food operations.

Several properties on the key intersection of Central Avenue and Bristol Street are for sale, including Central Sales at 314 N. Central Ave. and a neighboring office building with a large parking lot.

The former Spirit Valley Laundromat closed in July 2017. The three-story building with upper-level apartments, underground parking and a basement swimming pool is listed for sale at $650,000.

The laundromat property is one of the few on the 200 block of Central Avenue not owned by Super One grocery store parent company Miner’s Inc. Miner’s recently acquired the building that serves as the Hoglund, Chwialkowski & Mrozik law office at 228 N. Central Ave. Miner’s also owns the neighboring building, where the Absolute Bodyart tattoo shop operates.

Hale said Miner’s might be purchasing property to protect the grocery store, the largest in its regional chain. Miner’s has not contacted the city with any development plans, Hale said. The company did not return Perfect Duluth Day phone calls seeking comment.

The Spirit Valley Laundromat building is one of the few in the 200 block of Central Avenue not controlled by Miner’s Inc, parent company of Super One grocery. The building is being offered for sale at a price of $650,000.

CMRA Real Estate agent Gayle Ankario, who is listing the Spirit Valley Laundromat, said the 11,000-square-foot building could be reopened as a laundromat or redeveloped into a new use. The building was constructed using the footprint of a 20th century apartment building in 1991 when the Kmart relocation displaced Grand Avenue laundromat owner Valaree Hammond. Hammond is retiring after 40 years in the laundromat business.

Ankario said West Duluth is starting to see more residential and commercial redevelopment activity.

“It is moving west, you do see things happening, there are some new businesses out there,” she said. “And (development) will move further down the bay, especially those connected with outdoor type activities … they’re really developing that whole area.”

Good freeway access, affordable property and city tax incentives for building renovation and job creation should be attractive to business owners, said Ankario.

“I see (West Duluth) as moving forward,” she said. “Everything is moving west.”