In December of 2024, a groundbreaking was held for the Duluth Incline Village project. An ambitious $500 million housing development overlooking the city. Fast forward to now, and some construction has already begun. Although Luzy Ostricher, the Duluth Incline Village developer, hasn’t met financial requirements to start building.

Duluth City Councilors received a Notice of Breach mailed to the developer on June 2nd from the city’s planning department. Now construction is grinding to a halt. In order for the project to move forward, the Ostreicher needs to show proof of financing.

Jeff Schiltz, the Business Development Executive of ICS, says construction crews building the project stopped working on Monday.

“Even a hole in the ground is the start of where the foundations would be. So you can kind of visualize it up there. We’re passionate about really helping our own community and the city of Duluth’s growing need for for housing,” Schiltz said. “We’re hopeful the developer will be able to work with the city on the issues. So we can get back in construction. Our team here at ICS, we’ve got other projects that certainly that we continue to put our efforts towards.”

Tricia Hobbs, the Executive Director for the Duluth Economic Development Authority, says there are other financial concerns. Ostreicher also owes an estimated $240,000 in property taxes for the Duluth Incline Village.

“They do need to provide proof of financing. That is something that we are asking for, in order for them to receive the tax increment financing. To date no public subsidy has been paid for the project,” Hobbs said. “Work has stopped at the site and we have asked they maintain and stabilize the site for public safety purposes. We are continuing to have conversations throughout these 45 days. We’re here, we’re ready to work with them have conversations on what that looks like. We are really committed to seeing development up at that site. So our team is here to do whatever is right and reasonable to see that happen.”

Duluth City Councilor Wendy Durrwachter also weighed in on the current situation. She said the city didn’t properly evaluate the Duluth Incline Village developer.

“I would love for this property to be developed for housing, I was deeply disappointed in the administration’s lack of vetting this developer,” Durrwachter said. “I had a conversation with Jeff Schiltz who reached out to councilors privately. He spoke of how the developer built housing in many cities in the Midwest and he really fell in love with Duluth in particular. I asked which other cities in the Midwest he developed in. He stated, ‘I wish I could tell you, but he claims it is against his religion to brag about it,’. The whole thing was quite alarming to me. I cannot think of any instance where religion has ever been considered a viable excuse to not submit detailed credentials in a business deal. It smelled of scam from the very beginning.”

WDIO News did reach out to Luzy Ostreicher for an interview, unfortunately they have not responded at this time. If you want to read more information about the Duluth Incline Village we have more stories here.