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RESOLUTION AUTHORIZING A /DEVELOPMENT AGREEMENT WITH STUDIO CAFÉ LLC FOR THE REDEVELOPMENT OF 22 W 1ST STREET IN DOWNTOWN DULUTH IN THE AMOUNT OF $140,000.
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CITY PROPOSAL:
BE IT RESOLVED that, the city council of the city of Duluth is hereby authorized to enter into a development agreement, substantially in the form of that attached hereto (DEDA Contract No. 24 860 036) with Studio Café LLC to facilitate the re-development in the form attached as Exhibit A, to facilitate the re-development of a vacant structure located at 22 West First Street, in the amount not to exceed $140,000, payable from fund 860.
Statement of Purpose
STATEMENT OF PURPOSE: The purpose of this resolution is to obtain the city council’s approval of the development agreement between the Duluth Economic Development Authority (“DEDA”) and Studio Café LLC to facilitate a capital investment project for 1st Street redevelopment, currently underway in Downtown Duluth. DEDA approved said development agreement on August 28th;2024in the resolution attached as Exhibit B.
As Studio Café LLC will be utilizing a vacant building that is a contributing structure to the National Register of Historic Places Downtown Historic District, interior and exterior improves are necessary to the structural stability and longevity of the building. The owner has obtained estimates from local contractors that propose the project to cost between $722,681 and $1,380,807 for the remainder of the buildout. The project work involves sistering joists, shoring walls and floors, reconstruction and tuckpointing of the north brick wall, all new windows and doors, new plumbing to a commercial kitchen and two ADA bathrooms, and finishing work. No funding from the development agreement will be allocated to equipment or furnishings for the space. Previous funding in the amount of $50,000 was provided by the Duluth 1200 Fund in March of 2024 to for brick front façade repair.
The business owner’s commitment to honoring the architectural heritage of 22 W 1st St is evidenced by efforts to retain, or restore, as much of the building’s unique character and original façade as possible during the project, which also has the effect of improving downtown aesthetics. Additionally, Studio Café LLC aims to pay homage to the history of the building, which once housed the long-standing Young at Heart Records store, by playing and selling vinyl records from local musicians.
As a condition of DEDA’s assistance, Studio Café LLC has committed to the retention/preservation of no less than four (4) full-time equivalent (FTE) employee positions within the first two years of operation. In addition to creating and retaining much-needed jobs in the Downtown Duluth area, this project will upgrade historic building infrastructure and work to protect and enhance the Downtown Duluth experience. The development agreement commits Studio Café LLC to retain the jobs in Duluth for a period of three years or be subject to repaying the conditional assistance on a pro rata basis.