Demolition of the former Pastoret Terrace on First Street and Second Avenue East has led to a new city fund supporting historic downtown Duluth building preservation.

Historic downtown Duluth buildings are now eligible for city-funded improvement loans after a legal battle over a fire-damaged-but-treasured 19th century townhouse demolition established the assistance program.

The city of Duluth recently added a $1.4 million Historic Fund to its long-running economic development initiative known as the 1200 Fund. To launch the new project, the city plans to make $400,000 in low-interest, partially forgivable loans to historic building owners for property work in 2025. The application process opened May 5.

According to a city media release, the fund was established as part of a settlement agreement with former Pastoret Terrace owner Dr. Eric Ringsred and his Respect Starts Here preservation organization. The city tore down the condemned 1887 Pastoret Terrace, 129 E. First Street, along with its Kozy Bar and adjacent Paul Robeson Ballroom in February after years of litigation.

Heavy equipment is parked on East First Street with the now vacant lot where the Pastoret Terrace once stood on the left. The fire-damaged former Duluth Pawn and Retro Antiques stores are on the right. (Photo by Mark Nicklawske).

City officials said the Historic Fund is designed to better maintain old downtown buildings and prevent properties from falling into disrepair. They hope building owners will respond with projects designed to preserve and enhance their historic properties.

“It’s really exciting. Our board is very excited about it and what it can do to help impact downtown Duluth, to preserve those historic buildings and even just the general character of downtown. We want to preserve that while it’s still there,” said city of Duluth Economic Developer Angie Stier.

According to the funding plan, 78 buildings constructed in the late 19th and early 20th centuries contribute to the historic district and are eligible for the program. Most of the buildings are on First Street between West Fourth and East Third avenues and on Superior Street between First Avenue West and where East Michigan Street terminates near Fourth Avenue East.

This maps shows the Downtown Duluth Commercial Historic District. The green stars indicate contributing properties eligible for the Historic Fund loan program. The red lines show the East First Street priority zone.

Stier said 15 buildings in the East First Street corridor will receive priority in the application process.

“That’s really the key piece. That’s a really disinvested area, it has been for a long time,” she said. “We know that (area) really needs some support and those neighboring buildings and businesses also need some support too.”

Historic building owners along East First Street are eligible to receive a zero-interest loan up to $100,000 and could see 50% loan forgiveness if they maintain their building to code for five years. Other buildings in the downtown historic district are eligible for loans up to $75,000 with 25% potentially forgivable after five years.

“Duluth’s history is very important to its success. Making sure that we have these continue to be functioning buildings and not just skeletons is good for everyone. It’s good for our tax base. It’s good for our business community. It’s good for tourism. It’s good for safety,” said Stier. “So all those pieces and more are really why these buildings need extra support.”

Stier said old buildings are expensive to maintain and it can be difficult for owners to obtain loans through traditional banks. The Historic Fund is designed to provide some financial relief to historic building owners to prevent their removal.

The Pastoret Terrace suffered a 2010 fire and Ringsred was never able to bring the building back to life. Other buildings in the East First Street corridor have suffered significant fire damage or have been demolished after falling into disrepair.

A 2006 National Register of Historic Places report identified 86 contributing buildings in the Duluth Commercial Historic District. Today 78 remain. Most of the losses have come along East First Street — with five buildings either demolished or fire damaged in the past five years.

Duluth Preservation Alliance Vice President Blake Romenesko.

“It’s probably the most degraded part of the historic district,” he said. “The 100 block of East First Street has been on our Endangered Places List for the last few years.”

In addition to the recent demolition of the Pastoret Terrace corner, the block saw fire gut the closed Pawn Duluth, 126 E. First St. in 2022 and the former Retro Antiques store, 118 E. First St. in 2020. Pawn Duluth was in the historic Model Laundry and the Retro Antiques building was originally a bakery. Both buildings were constructed around the turn of the century.

Also in the neighborhood, the troublesome Lake Superior Bottle Shop, 32 E. First St., closed in 2017. Developers tore down the liquor store along with an adjacent former meat market, both contributing historic structures, and the post-war era Salo Building further down the block. A multi-use project was discussed but nothing has materialized. Romenesko said all three buildings were demolished without consulting with the Duluth Heritage Preservation Commission.

“They just came down willy-nilly,” he said.

Romenesko said he hopes the new Historic Fund financing project marks a change in city approach to protecting historic structures.

“What the city likes to do is clear land even if people are just thinking about developing it — before any plans are actually made — and then we just get left with these empty lots for who knows how long,” he said. “It’s very short sighted.”

“I think (the Historic Fund) is a good opportunity for property owners to get some incentives to save the buildings that we have left.”

The site of the Lake Superior Bottle Shop, 32 E. First St., and two other historic buildings remains a vacant lot. (Photo by Mark Nicklawske)

Preservation is possible. Romenesko said Children’s Dental Services rehabilitated its historic building at 25 W. Superior St. — the former Global Village store — earning a Duluth Preservation Alliance award. He also noted the ongoing renovation of the former Young at Heart record store at 22 W. First St.

“We have a lot of success stories and I think there will be more,” he said. “I think we still need a more coordinated effort on the city to really appreciate our historic downtown. Right now they’re doing it because they got their arm twisted. But I think for real change we need to see the city be a team player.”

Romenesko said the city of Duluth used to have a historic preservation planner on staff. The position no longer exists. The Heritage Preservation Commission could also be utilized better, he said, participating in planning decisions.

“For a city of this size and for how many resources we have, it’s kind of embarrassing that we don’t have someone specialized in historic preservation in city hall,” he said. “It’s almost like they are doing it because they had to, not because they support historic preservation.”

Stier said the city has not received any Historic Fund proposals yet.  Building owners can view an instructional video on YouTube for a project overview. The deadline for application is Aug. 4.