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Developer considers converting former St. Louis County Jail in Duluth into apartment building

The former St. Louis County Jail in Duluth may be on its way to a new future as an apartment building. Developer Grant Carlson, a principal partner in Jail Holding LLC, which owns the building at 521 W. Second St., is turning away from original p...

Old St. Louis County Jail
Old St. Louis County Jail in downtown Duluth. (Clint Austin / Forum Communications)
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The former St. Louis County Jail in Duluth may be on its way to a new future as an apartment building.

Developer Grant Carlson, a principal partner in Jail Holding LLC, which owns the building at 521 W. Second St., is turning away from original plans to market the property as commercial/office space after analyzing the local market.

"We're shifting gears toward a multi-family housing model, and we're exploring the idea of teaming with another developer who has more experience doing that type of project," Carlson said.

Carlson figures he and his father/business partner, Clint Carlson, have invested about $500,000 in the property so far. The pair bought the jail in 2009 for $54,000. Since then, they have replaced the roof, tuckpointed the building's masonry and repaired damaged terra cotta work. Some of the improvements were made with the help of a $225,000 check from the Minnesota Historical and Cultural Grant Program.

"The property is in a very development-ready state, and we're focused on moving forward with the project," Carlson said, reflecting on the status of the shored-up building.


Carlson estimates that converting the former jail to an apartment building will cost "not less than $2 million and not more than $4 million." He said the project also should be eligible for historic building tax credits.

The jail was built in 1924 and has sat empty since 1995. With the help of local preservationists, it narrowly escaped a date with the wrecking ball. In 2011, the Preservation Alliance of Minnesota identified the jail as one of the state's 10 most endangered historic places.

Although Carlson hasn't found a developer to partner with yet, he said he has had "a number of productive conversations" with Twin Cities businesspeople who have been active in the rental housing market.

"There are clearly some good market indicators to support such a project in Duluth," he said. "We're probably looking at 26 rental units, give or take."

Carlson said he envisions a mix of one- and two-bedroom apartments, with the middle floors of the building likely accommodating slick, modern "shotgun-style efficiency units."

Mayor Don Ness praised the idea of a new rental development in downtown Duluth, saying: "There is a real need for work force housing in our city. The rental market is really tight, especially for young professionals."

He said that many young people who might have been in the market to buy a first home in the past now are saddled with heavy student debt and may be unable to qualify for a mortgage.

"People are not able to get into starter homes. They're looking for quality rental units, and they're having a tough time finding them," Ness said. "I'm really hoping the private sector will step up to meet the extreme demand for rental housing we see out there."


Not all of the former jail would necessarily be devoted to housing, however. Carlson said the ground floor could readily be converted to retail, commercial or artist studio space.

Carlson said he is in no rush and plans to proceed with the project thoughtfully.

"We don't want to hold up our investment indefinitely, but the last thing we want to do is take a step in the wrong direction," he said. "We're going to continue at the steady pace we've already established."

By the same token, Carlson said that if he found a capable, experienced developer who wanted to move ahead with the project independently, he'd be happy to sell his interest in the property and move out of the way.

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