Single lot piques housing interests

An 80-by-110-foot residential lot in southeast Cloquet gave rise to robust discussion on housing throughout city hall this month, with the city council agreeing Tuesday to sell the lot to a building contractor who plans to build on the lot with the intention to sell.

"The 'for-sale' market is the toughest market we've faced to date," said community development director Holly Hansen during last week's meeting of the Economic Development Authority.

"It's been easier to put up apartment buildings and multiple-family (dwellings) because that's how State of Minnesota programs for economic development tools work," Hansen added. "These are the ones we're trying to get - the 'for-sale' units."

Formerly a tax-forfeited property, the lot was approved during Tuesday's city council meeting for a $1,500 purchase by Cloquet-based home builder Boss Builders, which plans to construct either a twin home or a single-family home on the property.

During the EDA meeting July 11, Hansen and Boss Builders' proprietor Jesse Hecimovich presented three options: a twin home model, a three-bedroom home priced at roughly $400,000, and a two-bedroom likely valued at $375,000.

Hansen described the two-bedroom as "more palatable," and "a better blend with the neighborhood."

The average home value in that neighborhood, populated by smaller, older homes, is around $175,000, Hansen said. Some EDA members argued against overbuilding and putting up a house that's too expensive for the neighborhood.

"I would label it almost workforce [housing], not ... executive-style homes," Hansen said of the surrounding houses.

Prior to its unanimous approval of the lot sale, councilors wondered if there wouldn't be higher demand for a three-bedroom home, or if the contractor could ultimately choose to rent the property rather than sell it.

Hansen called the three-bedroom option a "risk," given property values surrounding the proposed home, and said the current agreement with Boss Builders would not allow for rental.

For its part, Boss Builders seems to prefer the twin home model, with a fire wall separating two housing units that would feature a shared maintenance agreement for things such as the roof.

"We can meet the requirements of the Baby Boomer generation that's trying to downsize and get into a twin house a lot easier than we can with a single family these days for a lower cost," Hecimovich said.

City councilor Lyz Jaakola, an EDA board member, liked the price points of the twin home or two-bedroom.

"It's wise to leave it open to be a twin home or (two-bedroom) family house," she said.

Officials estimated twin homes on the site could sell for roughly $360,000 each, which would benefit the contractor, who is partnering with a concrete specialist to help the deal work. All proposals include slab-on-grade construction. The cost of building homes has soared, Hecimovich said.

"We're struggling with it every day, trying to build small residential houses that fit all the criteria people want these days," he said. "You drive yourself from a $400,000 home into a $500,000 home really fast."

It's still unclear if a twin home could fit on the lot.

"He'll have to look to see sizewise," Hansen told the Pine Knot. "It will come down to how the lot really sites after a survey."

The city had previously sold the lot to another developer that ultimately backed out of a planned development.

Hecimovich told the EDA last week that he expected construction to commence next spring, with a possibility for later this fall.

Kelly Zink, president of Cloquet Area Chamber of Commerce, is a nonvoting participant at EDA meetings. She favored a twin home model.

"It's not a $500,000 neighborhood house, although [with] a twin house it matches the neighborhood of the folks that would be living there," Zink said. "It allows two families an opportunity to get a very nice home, which we need in Cloquet."

Accessibility compliance would make whatever is built livable for all ages, Hansen said.

Hansen summed up the sale in terms of the current housing shortage.

"Small projects, over time, add up," Hansen said, citing developments on Adams Street, Avenue E and the Trails Edge Townhomes. "We've been able to do a lot of smaller projects which, when we step back, make a big difference."

Interest in Hotel Solem

The redevelopment of Hotel Solem in downtown Cloquet is proceeding. The 104-year-old property on Cloquet Avenue formerly housed Mexico Lindo and subsequently Pedro's Grill and Cantina, but was condemned and taken over by the city last year.

C&C Holdings of Duluth, owners of the engineering firm AMI Consulting Engineers, has toured the building and expressed interest, along with a business partner, "in revitalizing the building and working with city staff to secure financing," said minutes of the May 2023 EDA meeting.

Hansen said there's nothing more official than that at the moment.

"We're working toward hopefully getting something," she said. "They're doing the most-detailed job I've seen. They're doing a phenomenal job, and we hope to help them in the future and hope to get an application from them."

Editor Jana Peterson contributed to this story. This story was modified after publication to reflect an estimated cost of $375,000 for a two-bedroom home and $360,000 each for a twin home.