Former Owners of Kozy Site Get $190,000 in Settlement With County

DULUTH, Minn.-Two former owners of the Pastoret Terrace, known to many as the Kozy building in downtown Duluth, have reached a settlement with St. Louis County for $190,000.

The lawsuit claimed St. Louis County did not allow enough time for someone to purchase the dilapidated building, before it was foreclosed on in 2015. It also alleged the county did an unlawful sale of the site to the Duluth Economic Development Authority back in 2016.

The St. Louis County Board approved the settlement yesterday with a unanimous vote.

Some of the settlement funds will go toward paying the outstanding taxes, penalties, and other costs associated with the St. Regis apartments in Duluth, which are also owned by Eric Ringsred, one of the former Kozy owners.  The other former owner involved in this lawsuit is Paul King.

The remainder of the settlement money will be used to reimburse the plaintiffs for certain costs incurred in maintaining and repairing the St. Regis Apartments.

The St. Regis was previously condemned by the city as it faced multiple issues including problems with heating the building.

According to a letter sent to the County Board from County Attorney Mark Rubin and County Administrator Kevin Gray this settlement will “contain a provision stating that St. Louis County denies the plaintiffs’ allegations as set forth in its answer and other papers filed with the court, denies any wrongdoing, and denies that the plaintiffs are entitled to any relief, and stating that St. Louis County is entering into the settlement agreement solely to avoid the burden and expense associated with further litigation.”

The city of Duluth, however, will continue in its legal efforts to avoid performing maintenance on the condemned Kozy site. The city and DEDA have appealed a judge’s decision telling the city to secure the building.

The judge asked the city to immediately install braces against the walls of the building damaged by fire last November. After that, the city is ordered to get estimates on the cost to remove debris from the roof and lower levels if possible before “restoring the structural integrity of the building.”

The court believes this phased approach will allow the court, city, and former Kozy owner Ringsred to collect information to help decide what happens next.

DEDA took ownership of the historic structure on East Superior Street in 2015 after Ringsred failed to pay his property taxes.

Ringsred has continued to fight the city in court to keep the building from demolition.

The Kozy first went up in flames in 2010 and was quickly condemned after that fire.