07-066-O

ORDINANCE NO. __________


AN ORDINANCE ALIENATING THE LINCOLN HOTEL SITE AND AUTHORIZING SALE OF SAME WITHOUT BID TO THE DULUTH ECONOMIC DEVELOPMENT AUTHORITY (DEDA) PURSUANT TO CONTRACT FOR DEED FOR THE SUM OF $192,500.

BY COUNCILOR STAUBER:

The city of Duluth does ordain:

     Section 1. That the city hereby designates the property described in Section 3 below as being surplus to the city’s future needs and hereby declares its intention to alienate its interest in same.

     Section 2. That the city has determined to sell the property without bid to the Duluth economic development authority for the following reasons:

     (a)  The city is being required by HUD to dispose of the property;

     (b)  DEDA will retain the site for future land assembly with adjoining properties for the redevelopment of an entire city block in Downtown Duluth; and

     (c)  The sale of the property below to DEDA without bid is in the best interest of the city of Duluth and its people and that the transaction furthers the general plan for economic development in the area.

     Section 3. That the proper city officials are hereby authorized to convey to DEDA the following described property in St. Louis County, Minnesota, by limited warranty deed pursuant to a contract for deed substantially in the form of that on file in the office of the city clerk as Public Document No. ________________ for the sum of $192,500 payable into Fund 262, Agency 020, Revenue Source 4640:

           Lots Fifty-three (53), Fifty-five (55) and the East half (E1/2) of Lot Fifty-seven (57), West Second Street, Duluth Proper First Division

     Section 4. That the city council finds, upon advice from the city assessor, that the sale is for fair market value.

     Section 5. That this ordinance shall take effect 30 days after its passage and publication.


STATEMENT OF PURPOSE:  This ordinance authorizes the sale of the Lincoln Hotel site to DEDA. Under the terms of the contract for deed between the city and DEDA, DEDA would pay the city quarterly over a four-year period.


The site was originally purchased using CDBG funds to remove the blighted Lincoln Hotel building which had been condemned for demolition. HUD prohibits the local jurisdiction from “land banking” and is requiring that the city dispose of the property. DEDA will retain the site for future land assembly with adjoining properties for redevelopment of an entire city block in the Central Business District.