A mediator in the Pastoret Terrace/Kozy Building litigation released a joint statement on Wednesday, January 22 saying a settlement has been reached between plaintiffs Dr. Eric Ringsred and his organization, Respect Starts Here, and defendants the Duluth Economic Development Authority (DEDA) and the City of Duluth.

Steve Reyelts of the Northland Trial Team said the settlement provides funding to support investment in the Historic District but also allows for the demolition of the Pastoret Terrace, formerly known as the Kozy Building. Dr. Ringsred had been an advocate for preserving the building located at the corner of First Street and Second Avenue East in Duluth.

“This settlement demonstrates the City and DEDA’s commitment to the vitality of and reinvestment in historic downtown Duluth,” explained Reyelts. “While the structures at the center of this lawsuit will not be rehabilitated, 100 % of the settlement funds will go toward investment in the nationally-designated Duluth Commercial Historic District. $1.4 million will establish a fund, to be managed by the 1200Fund, to provide grants and low-interest loans to owners of contributing buildings to the Duluth Commercial Historic District for investment in and repairs to those buildings. Buildings on the First Street corridor will receive priority lending and favorable terms. This new historic properties fund will help to spur private investment in historic downtown.”

As per the current language of the settlement, DEDA will make up to $700K available to Respect Starts Here for their investments in contributing buildings in their control in the Duluth Commercial Historic District and the City will pay approximately $30K in delinquent taxes on contributing buildings under the organization’s control in the Duluth Commercial Historic District.

The settlement itself was reached during mediation on May 23, 2024, and then the language was revised on December 18, 2024. The final language of the settlement agreement was decided at a DEDA meeting on Wednesday, January 22.

DEDA passed the motion, agreeing to the settlement. The Duluth City Council will consider a resolution to approve the settlement on Monday, January 27.

“The City of Duluth and DEDA remain committed to the reinvestment and redevelopment of downtown, and look forward to the much-needed and long-awaited momentum that this settlement agreement will ignite in the rehabilitation and enrichment of historic downtown Duluth” continued Reyelts. “Details on how to apply for grants and loans related to the settlement funds will be made available in coming weeks.”

The full joint statement can be found here.