The Esmond Building – formerly the Seaway Hotel – at 2001 W. Superior St. in Lincoln Park. The now vacant, city-owned building would be demolished and replaced with a mixed use housing project under a new redevelopment proposal. (Photo by Mark Nicklawske)

A historic but blighted building in the heart of the Lincoln Park craft district could be headed for demolition after plans to renovate the city-owned property fell through and officials started working with a new developer.

The Esmond building — formerly the Seaway Hotel — would be taken down and replaced with a new mixed-use, residential and commercial development under a proposal for the property at 2001 W. Superior St. Merge Urban Development, with offices in Wisconsin and Iowa, is currently in negotiations with the Duluth Housing and Redevelopment Authority and the Duluth Economic Development Authority to finalize a purchase agreement and site plans.

Duluth Senior Housing Developer Jason Hale said Minnesota Opportunity Zone Advisors LLC planned to purchase and renovate the building last year but condition issues scuttled the deal. Hale said the developer determined building rehabilitation was infeasible.

“Particularly after the building was vandalized and radiator lines were removed,” he wrote in an email.

According to the Duluth history website Zenith City Online, the three-story Esmond Building was constructed in 1913 by the Gopher Realty Company, a subdivision of Duluth Brewing and Malting, a Duluth brewery established in 1896. The building opened as the Rex Hotel and operated under various names for years before becoming the Seaway Hotel 1959.

As the Seaway, the property fell into disrepair and for years served as a residential hotel for approximately 70 low-income residents.

The Rex Hotel — which bears a concrete Hotel Esmond nameplate — was constructed in 1913 by a subdivision of Duluth Brewing & Malting, which operated at 29th Avenue West and Helm Street from 1896 to 1966.

According to the Duluth News Tribune, the Duluth Housing and Redevelopment Authority purchased the building in 2014 after it failed safety inspections and nearly closed in 2012. The HRA maintained the property until it completed a $13.4 million public housing project called Garfield Square and moved Seaway residents into the new building at 10 Piedmont Ave. in 2020.

Hale said Lincoln Park will lose a piece of its history and undergo construction disruptions if the Esmond building is torn down but a new building will be safer, more energy efficient and demonstrate strong neighborhood investment.

“Where saving and reusing older buildings is possible, we should strive to do it,” he said. “Where it is not, we should encourage the highest and best use for a given site. The Merge-proposed project is a mixed use building that will fit well into the growing, changing craft district.”

Joy Hannemann (mergeurbandevelopment.com)

Merge Urban Development partner Joy Hannemann said she hopes to have an agreement in place with the city in the next couple of months. Once a development agreement is reached, the company can establish a construction timeline.

Hannemann said she was impressed with the Lincoln Park neighborhood and its small town feel with big city amenities.

“(Duluth is) a great town and it has all of the assets that we’re after,” she said. “We love that Lincoln Park is up and coming … it seems like it would be a great place to live.”

Hannemann and her business partner both ran in the 2019 Grandma’s Marathon races and explored Lincoln Park during their visit. Bent Paddle, Ursa Minor and the assortment of shops and businesses in rehabilitated storefronts left a good impression. “It’s really a charming place,” she said.

Merge Urban Development specializes in improving upper Midwest properties located within Opportunity Zones, a federally funded program designed to encourage investment in low-income, under-capitalized neighborhoods. The company has completed multi-use residential projects in Eau Claire and Oshkosh, Wis. and Davenport, Iowa that would be similar to a Duluth project, said Hannemann.

“We look for places that have existing assets for a lifestyle perspective,” she said. “Places where you can walk to a local restaurant or walk to a shop downstairs — in Oshkosh there’s a grocery store on the ground floor of one of our buildings. These are things that create a more walkable neighborhood and bring more dwellers to the areas of business and entertainment — so it’s more of a 24/7 area.”

Tom Hanson, owner of the Duluth Grill, OMC Smokehouse and two other Lincoln Park establishments, said he was eager to see how the Esmond property develops. Any work on the Esmond — either a renovation or new construction on the site — shows Lincoln Park is a good place for investment, he said.

Hanson has renovated multiple old Lincoln Park buildings in the past five years. He said the Esmond is in a great location in the heart of the neighborhood but the structure may be too far gone.

“People have looked into the renovation of it and the work far exceeds what the exterior represents. The interior is just terrible,” he said. “I think the new construction in the neighborhood is kind of a positive sign.”

Lincoln Park has two major building projects already underway.

Twin Ports developer P&R Companies demolished the former Robert’s Home Furnishings building at 2102 W. Superior St. earlier this month. A four-story, 74-unit apartment building called Lincoln Park Flats is now under construction.

The former Enger & Olson furniture store — more recently Johnson Brothers Furniture and then Furniture and Mattresses 4 Less — was spared the wrecking ball and is being completely renovated at 1824 W. Superior St. Developer 1LLC is constructing 40 market rate apartments on its two upper floors with retail space at street level.

“I’m kind of excited about all of it,” said Hanson. “It’s a little chaotic around here but I think once you look past it there’s definitely progress.”

Hale said project details for the Esmond site will be made public if and when the city and Merge Urban Development reach a development agreement.

This 1930s-era postcard shows the Seaway Hotel building when it was called the Curtis Hotel. The illustration is a slightly altered version of an older postcard from when the building was the Rex Hotel. The size of the building is exaggerated in the image, including a mysterious fourth floor, which almost certainly never existed.