Protest Over Duluth Apartment Building’s Partial Hotel Changes While Management Gives New Insight

DULUTH, Minn. – People protested Monday outside a one-year-old housing development in Duluth’s Lincoln Park neighborhood.

The protesters said they don’t want to see one floor of the building converted into boutique hotel units.

Lincoln Park Flats on West Superior Street is owned by P&R Properties.

Company officials told FOX 21 Monday that turning the second floor into 24 short-term rentals was never planned but is the only solution for a development that’s become unexpectedly unsustainable.

P&R co-owner Ryan Neslon said struggles to build during the pandemic and skyrocketing construction costs and interest rates are to blame.

Nelson said the money coming in from Lincoln Park Flats is simply not enough to make headway with expenses and debt from the project in the form of loans with the bank.

Nelson said Lincoln Park Flats will still meet the legally required 23 affordable housing units, along with 27 market rate units.

But the people protesting said they don’t want a single hotel unit replacing residential.

“People shouldn’t have to leave. This is publicly subsidized housing. And people shouldn’t have to leave,” said Maria Medel, a protester. “You know, stand in solidarity with these people, because these people also have a life to live and they don’t deserve to be kicked out,” Medel explained.

“I think it’s extremely heartening,” said Ashlie Castaldo, a resident and at-large city council candidate, when referring to the protest.  “It shows that we all have the same means and the same drives, and the basic necessities. We all want a home to live in and a home to go to and not have to worry about that house type of security.”

Meanwhile, Council President Janet Kennedy and some of her colleagues released a statement to the media Monday. It reads in part:

“The Duluth City Council is upset and concerned with the recent developments at Lincoln Park Flats.”

“We are working closely with City Administration to make sure this does not happen again and will have a proposed action at the Thursday, April 6, 2023, Agenda Session.”

P&R Chief Operating Officer Dante Tomassoni released a statement to FOX 21 Monday saying discussions about the changes to the building’s business model have actually been ongoing with the city since last fall.

He also addressed the $2.35 million in tax rebates as part of the development deal and how the company is helping 2nd-floor tenants with housing.

The statement reads in part:

 “P&R started working with City officials in November on this change and all permitting approvals were approved prior to announcing the change to the second floor.”

“The City of Duluth has not paid any amount of the TIF out thus far, so the idea that we’ve somehow taken money and reneged on the deal is just false.”

“P&R has been working tirelessly and successfully to secure housing for each tenant affected. No tenant from 2nd floor will be left without housing.”

FOX 21 reached out the Mayor Emily Larson’s office Monday evening for clarification about the discussions from last fall that P&R says happened.  We did not hear back by news time at 9 p.m.

In the meantime, Duluth Chief Administrative Officer Noah Schuchman sent the city council the following email Sunday afternoon about the hotel permit being issued to Lincoln Park Flats:

“The City is aware that a hotel permit was issued for Lincoln Park Flats. The permit was issued without extensive review because the hotel land use is permitted by right in this zoning district and the permit is a very simple process due to significant overlap between regulations for a new apartment building and a hotel.”

“The City has flagged same/similar developments in the land use system moving forward to make sure additional review is done should a similar issue arise so this does not happen again.”