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Superfund Redevelopment Initiative Pilot Project
Duluth Works: A Reuse Planning Report for the US Steel Superfund Site
prepared for
The City of DuluthDepartment of Planning & Development402 City HallDuluth, Minnesota 55802
prepared by
E2 Inc. 2417 Northfi eld RoadCharlottesville, Virginia 22901
funded by
U.S. Environmental Protection AgencySuperfund Redevelopment Initiative (SRI)
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Table of Contents
Project Overview page 3Introduction page 5
Duluth’s Regional History page 7US Steel Duluth Works: Social and Industrial History page 9US Steel Duluth Works: Operations and Contamination page 11
US Steel Duluth Works: Conceptual Reuse Framework page 15US Steel Duluth Works: Market Analysis page 19US Steel Duluth Works: Future Plans and Next Steps page 23
Appendices Appendix A: Report Sources page 24 Appendix B: Planning, Land Use, and Market Analysis Data page 25
Acknowledgements
E2 Inc. would like to thank the following people and organizations for their dedication to the reuse planning project for the US Steel Duluth Works site and for their valuable contributions to this report.
Mark C. Barnes, Environmental Affairs-Remediation Manager, United States Steel Corporation
Thomas Bloom, Reuse Coordinator, EPA Region 5
Tom Cotruvo, Director, Urban Development, City of Duluth Planning and Development Department
Susan Johnson, Project Leader, Minnesota Pollution Control Agency
Anne Moore, Public Information Offi cer, Minnesota Pollution Control Agency
Andy McDonough, Development Director, Duluth Port Authority
Jon Peterson, Remedial Project Manager, EPA
John Zaborske, Regional Manager, United States Steel Corporation
Cover page: Aerial Image of the US Steel Duluth Works Site, Taken November 1951, Courtesy of NMHC, Duluth
Left: Recent Bird’s Eye Photograph of the US Steel Duluth Works Site
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Project Overview
The United States Environmental Protection Agency (EPA)’s primary responsibility at Superfund sites is the protection of human health and the environment. Since 1995, it has also been EPA policy to consider reasonably anticipated future land uses when making remedy decisions at Superfund sites, so that the remediation of Superfund sites can allow for safe reuse for commercial, recreational, ecological, or other purposes. With forethought and planning, communities can help return sites to productive use without jeopardizing the effectiveness of the remedy put into place to protect human health and the environment. Across the nation, more than 400 former NPL sites are in productive reuse or plans for their reuse are under development. Fifteen thousand jobs are located on sites returned to commercial and industrial use, generating a half-a-billion dollar increase in annual incomes. Other sites are providing more than 60,000 acres for ecological and recreational uses.
Reuse planning at NPL sites presents a unique set of obstacles, challenges, and opportunities. Superfund site designation represents a commitment from EPA that a site’s contamination will be remediated and that the site will be made safe for human health and the environment. However, several factors can complicate reuse considerations at these sites, including the level and complexity of contamination, the regulatory and liability scheme used to enforce site remedies, and unclear or resistant site ownership, which can lead to a lengthy and contentious remediation process. Any successful reuse planning effort must be mindful of how a site’s reuse and remediation will work together, must involve and expand the capacity of diverse stakeholders to meaningfully participate in the process, and must take into account the long time frames often involved in NPL site remediation.
The City of Duluth, Minnesota received assistance from EPA’s Superfund Redevelopment Initiative in 2003 to work with a consultant team and key stakeholders, including the City’s Planning and Development Department, the U.S. Steel Corporation, and the Duluth Port Authority, with support from EPA and the Minnesota Pollution Control Agency (MPCA), to identify future land use opportunities for the US Steel Duluth Works portion of the St. Louis River/Interlake/U.S. Steel NPL site.
The St. Louis River/Interlake/U.S. Steel NPL site includes approximately 135 acres of St. Louis River sediment and approximately 895 acres of surrounding land, river embayments, wetlands, and boat slips. The ‘Site’ includes two state Superfund sites, located four miles apart, along the St. Louis River’s northern bank: the St. Louis River/Interlake/Duluth Tar site (SLRIDT), located in West Duluth, and the US Steel Duluth Works site (USX), located in Morgan Park. EPA listed both areas as a single site on the NPL in 1983 due to contamination from hazardous substance discharges made by numerous companies between the 1900s and 1970s.
This report, prepared by the project’s consultant team, presents the team’s fi ndings, including a conceptual reuse framework and market analysis. The report highlights key reuse considerations, opportunities, and challenges that the City of Duluth, the U.S. Steel Corporation, community organizations, EPA, and MPCA will need to keep in mind as the US Steel Duluth Works portion of the St. Louis River/Interlake/U.S. Steel Superfund site is remediated and returned to use. The project’s fi ndings are intended to inform the site’s remedial design and implementation as well as future community planning efforts.
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5Left Page: Photos of the US Steel Duluth Works Site, 2003
Introduction
Today, planning for the remediation of the 640-acre US Steel Duluth Works site is underway. The Minnesota Pollution Control Agency, the lead agency in charge of remediation at the site, is working with EPA to assess the site’s conditions and contaminants and develop remedial approaches for the site.
Several years from now, the site’s remediation will be complete. Planning for the future use of the site today will help to ensure that the remedy and reuse can be coordinated. As a result, the site will not only have a remedy that will be protective of community residents’ health and safety, but the site will also be reintegrated into the community, ultimately helping to meet local needs and sustain the lcoal economy.
This report is the product of an eight-month reuse planning process conducted by the City of Duluth to identify reuse opportunities and challenges for the US Steel Duluth Works portion of the larger St. Louis River/Interlake/U.S. Steel Superfund site. Working with a consultant team from E2 Inc., D.I.R.T Studio, and a group of key stakeholders, the City of Duluth managed the reuse planning process with support from MPCA and EPA.
During the project’s eight month duration, the reuse planning process has involved:
• research on the US Steel Duluth Works site’s history, contamination, and current remedial status; • coordination with the project’s consultant team to assess local market conditions and the potential impacts of industrial, residential, commercial, and recreational reuses at the site; and• identifi cation of key reuse considerations, opportunities, and challenges for the US Steel Duluth Works site.
Based on these analyses and discussions between stakeholders, the project’s consultant team hereby presents the City of Duluth, US Steel Corporation, MPCA, and EPA with the project’s fi ndings for the US Steel Duluth Works Superfund Redevelopment Initiative project. The project’s fi ndings represent a signifi cant step that will inform the remediation and eventual reuse of the US Steel Duluth Works site. Sustaining community interest and involvement, creating of partnerships, and procurring resources are critical next steps. These steps will help to ensure that this report serves as part of an active and ongoing community discussion and continues to inform MPCA and EPA’s remedial planning for the US Steel Duluth Works site.
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US Steel in the Upper Lakes Iron Range Country, 1908 (courtesy of Kenneth Warren’s Big Steel: the First Century of the United States Steel Corporation, 2001)
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Duluth’s Regional History
Northern Minnesota’s vast natural resources and the confl uence of the St. Louis River with Lake Superior helped to draw settlers to the area now know as the City of Duluth. Twelve thousand years ago, the region that now includes the City of Duluth was under one-mile-thick ice. However, by 5,000 B.C., several Paleo-Indian cultures had settled in the area. Native American tribes’ inhabitation of the area continued uninterrupted until 1793, when French settlers established the fi rst permanent trading post at the mouth of the St. Louis River, near the natural entrance to what would become Duluth Harbor. The fur industry dominated the region’s economy through the fi rst half of the 1800s.
In the 1870s, the development of a shipping canal on Minnesota Point and the extension of a new railroad led to sustained regional population growth. Duluth’s population grew from 100 in 1869 to 33,000 by 1890, sustained by an economy rich in agricultural, timber, and iron ore resources. Iron ore from Minnesota and coal and lime from across the Great Lakes region were transported directly by boat and rail car to Duluth, helping to establish the city as a major center for steel production.
By 1900, Duluth was considered a major port, with annual shipments of iron ore, lumber, grain, and general merchandise totaling nearly twelve million tons. In 1910, the US Steel Corporation selected the Duluth Works site as the location for a new steel manufacturing facility, which was fully constructed by 1916. The site was selected for its large size, proximity to the ore reserves, and location adjacent to Duluth’s inland port. The location allowed for low-cost shipping of steel products to national and international markets.
US Steel’s facilities at the US Steel Duluth Works site operated between 1916 and 1979, operating as the American Steel Company until the 1940s. In the 1950s, Duluth’s agricultural, timber, and steel industries began to decline from the depletion of regional timber reserves, technological innovations, and fi erce competition from larger Chicago mills and foreign steel. While the City of Duluth has changed dramatically over the past one hundred years, it has retained a strong sense of community heritage. The City has transitioned from a predominantly industrial and manufacturing economy into one with multiple diversifi ed service sectors, including health care, aviation, higher education, technological, and fi nancial services. Duluth’s current regional and local economy coupled with its location as an inland seaport, has helped to foster new commercial growth, residential expansion and tourism, as well as has helped to stabilize the city’s manufacturing sector.
Accordingly, planning for the reuse of the US Steel Duluth Works site must take into account the larger-scale economic changes in recent decades as well as the site’s rich social and industrial history.
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Top Left: Steel Workers at the Duluth Works Site, 1914
Top Right: Molten Iron Ore, Circa 1946
Right: Aerial Image of Duluth Works Site, Taken November 1951
(Historical Images Courtesy of NMHC, Duluth)
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US Steel Duluth Works: Social and Industrial History
Steel production in Duluth reached its peak during the 1940s, helping to shape the growth of Duluth’s population and economy as well as the development of city neighborhoods and services. During World War II, the US Steel Duluth Works site was the city’s largest employer with approximately 5,000 people working at the site.
Plant operations consisted of coke production, iron and steel manufacturing, casting, primary rolling and roughing, hot and cold fi nishing, and galvanizing. The integrated steel mill and coke fabrication facility produced steel posts, nails, and barbed wire for national distribution. During World War II, Duluth Works supplied steel for the military’s vehicles, tanks, and planes.
The majority of US Steel Duluth Works employees lived in the Morgan Park and Gary neighborhoods adjacent to the site. Merchant mill, wire mill, and rod mill operations supported the neighborhoods’ residents until the 1970s, when the plant closed due to domestic and foreign competition as well as decline in demand.
The map on page 10 depicts building locations along with the steel manufacturing process at the US Steel Duluth Works site. Site buildings included a coke plant located along the northwest edge of the site; a merchant mill, rod mill, and fi nishing mill located in the center of the site; an open hearth and stock house located between the merchant mill and coke plant; a wire mill located on the eastern portion of the site, and a materials handling and storage yard located on the southwest portion of the site. Remaining structures on the site today include the ore walls that were part of the materials handling yard. Prior to demolition, US Steel’s facilities at the site consisted of more than 40 buildings, some a half-mile in length, all located on a square mile of land. The operations at the site were extensive and involved many different types of manufacturing processes. Coal was transported from the materials handling yard across the site by rail and turned into coke by the site’s furnace. Another blast furnace turned ore into steel slabs. Mills hammered out nails, wire, and fence posts. A cement plant nearby reprocessed waste from the iron ore, making cement. Much of the fi nished steel produced at the site was then shipped to Chicago. For over sixty years, it was these operations that helped to shape and defi ne Duluth’s history, economy, and neighborhoods.
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Diagrammatic Map Illustratingthe Former Duluth Works Site
Facilities and Operations
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US Steel Duluth Works: Operations and Contamination
Industrial operations at the US Steel Duluth Works site led to contamination of site soils, ground and surface water, and St. Louis River sediments. Processing activities at the mill included coke and iron production, open hearth steel production, wire rolling, and wire milling. Coke, iron, and steel production were active at the site until 1979. US Steel and several other companies continued operations at the site’s wire mill until 1987. Following discovery of surface and ground water contamination, EPA placed the 640-acre US Steel Duluth Works site on the National Priorities List (NPL) in 1983. Since the plant’s closure in 1979, all site facilities have been removed or demolished with the exception of the ore walls from the former materials handling yard. The site’s remediation, led by MPCA, has been ongoing since 1989.
Ore Walls at the US Steel Duluth Works Site, 2003
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Diagrammatic Map IllustratingAreas of Contamination and Remediation at the
St. Louis River - U.S. Steel Superfund Site
This is an interim placeholder map. A revised version will depict updated areas of contamination and remediation when that information becomes available.
E² Inc.August 2005
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US Steel Duluth Works: Operations and Contamination (continued)
The site’s former operations employed several types of toxic materials, including coke tar, sludge, coking by-products, blast furnace by-products, asbestos, petroleum fuels, oils, lubricants, and solvents. These materials were used and deposited such that soils and sediments have since become contaminated, requiring remediation of soil and groundwater. EPA divided the US Steel Duluth Works site into 18 operable units, based on types of contamination and location. At the time of EPA’s fi ve-year review in September 2003, 16 of the 18 operable units had been remediated. Subsequent sampling, however, indicates that there are contaminated soils that need remedial action. EPA and the site’s Potentially Responsible Parties (PRPs) are currently reviewing the extent and location of the contaminants as well as the timing of remedial activities. The site diagram on page 12 will be revised to refl ect these changes.
US Steel Duluth Works Site, 2003
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Proposed Conceptual Reuse
Framework
E² Inc.
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US Steel Duluth Works: Conceptual Reuse Framework
Based on stakeholder group discussions and meetings, as well as on analyses of the site’s physical characteristics, contamination and remediation options, land use and market conditions in the City of Duluth and surrounding St. Louis County, the project’s consultant team worked with project stakeholders to develop a site reuse strategy, called a Conceptual Reuse Framework. The results are called a “framework” because they represent an early plan that is a fl exible structure able to incorporate additional detail and information as the site’s remedy is designed and implemented. The remediation of Superfund sites like the US Steel Duluth Works site can take years, rather than months, so plans for the site’s future use must be fl exible enough to incorporate new information over time.
The framework is also designed to allow for portions of the site to be adapted for reuse in different phases so that site reuses can benefi t the community as soon as possible. For instance, the site could initially begin serving the neighboring communities as an ecological and recreational amenity. During this phase of reintegrating the site into the community, planning for the second phase could begin which could include community oriented facilities as well as mixed commercial and residential development. The following sections describe the potential amenities of the Framework in greater detail.
Ecological and Recreational Amenities
The US Steel Duluth Works site could serve as a signifi cant ecological and recreational amenity for future site users, visitors, and residents of the surrounding neighborhoods. The eastern portion of the US Steel Duluth Works site offers extensive views of the St. Louis River, potential for waterfront access, and a perennial stream corridor. Wetland areas adjacent to the St. Louis River provide excellent natural habitat and opportunities for wildlife viewing for new neighborhood residents. The site also features a historic tourist train, operated by the Lake Superior and Mississippi Railroad Company, which runs along tracks parallel to the St. Louis River during non-winter months.
The US Steel Duluth Works site is located within one mile of three neighborhood parks, regional Bardons Peak Forest Park, and biking and walking trails like the Western Waterfront Trail, Iron Trail, and the Munger Trail. The region’s network of biking and walking trails serve as a local and regional attraction for Duluth and are also a nationally-recognized bird-watching resource. Species including the harlequin duck, black-capped chickadee, downy woodpecker, red-breasted nuthatch, white-winged crossbilll and great gray owl can be found in the area. During winter months, snowshoeing and cross-country skiing along Duluth’s established trails is a popular way to view birds and other wildlife such as deer, red fox, and timber wolf.
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Map of Landscape
Infrastructure in District 1
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Undeveloped Land Ready for Rezoning for Mixed Commercial and Residential Uses
Located in close commuting proximity to downtown Duluth within established city neighborhoods, with exceptional views and waterfront access along the St. Louis River, portions of the undeveloped US Steel Duluth Works site could be well-suited to mixed commercial and residential development in the long-term. The Framework, presented on the adjacent page, illustrates the mixed commercial and residential reuse potential of the central portion, and the residential reuse potential of the eastern, 50-acre portion of the US Steel Duluth Works site, as well as the site’s central location, access points, and natural and recreational amenities.
The US Steel site Duluth Works is currently zoned M-2 (manufacturing), which allows commercial and manufacturing uses. The rezoning of the site could allow for mixed use development, including commercial and residential components. The Neighborhood Planning District 1 section of the City of Duluth’s Comprehensive Plan calls for the redevelopment of the site as an asset for surrounding neighborhoods. Rezoning for residential development would be included of Phase I of the reuse plan.
Mixed Residential and Commercial Reuse Opportunities
As mentioned above, several factors, including location, site access, and site infrastructure, indicate that the central portion of the US Steel Duluth Works site could serve as an ideal site for mixed commercial and residential development, pending fi nalization of the site’s remediation. The eastern portion of the site could be potentially well-suited to residential land uses.
Location: The site is centrally located, with access to local road networks and infrastructure. It is approximately four miles from Duluth’s downtown business district, six miles from Duluth International Airport, and three miles from Superior, WI. The US Steel Duluth Works site is situated within two established Duluth neighborhoods, Morgan Park and Gary-New Duluth.
Site Access: The site can be accessed from the existing road network in the Morgan Park neighborhood to the north of the site. Existing neighborhood roads provide quick and easy access from the site’s northern boundary to Route 23, one of Duluth’s primary transportation corridors. Additional site access from Route 23 could be provided along the site’s western boundary.
Site Infrastructure: While the site includes limited water infrastructure, it is located in close proximity to neighborhood and trunk water, gas, and sewer lines.
Existing Neighborhood Amenities
Future uses at the US Steel Duluth Works site would also benefi t from the site’s proximity to surrounding neighborhood amenities. Morgan Park neighborhood’s community center and recreation center, as well as the Gary-Duluth neighborhood’s elementary school, community center, and recreation center, are located within one mile of the US Steel Duluth Works site.
18Clockwise from Upper Left: Bayfront Festival Park at Dawn, Industrial Shipping in Duluth, Duluth’s Historic Downtown Skyline, December Dusk, The Duluth Harbor is Home to Many Types of Vessels, Biking Trails in Duluth, Children Never Seem to Lose their Fascination of Seagulls in Canal Park (1,3,4,5 Courtesy of the City of Duluth: 2 Courtesy of Lake Superior Warehousing Co., Inc; 6 Courtesy of Duluth Convention and Visitors Bureau)
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US Steel Duluth Works: Market Analysis
Project consultants E2 Inc. completed an initial market analysis to inform the stakeholder group’s discussions and decision-making. The analysis provided the stakeholder group with a review of key demographic, economic, and land use indicators at the city-wide and neighborhood levels. The analysis evaluated the demand for different types of land uses as well as the availability of land suitable to meet the demand in Duluth and in St. Louis County. Sources used in the market analysis included real estate sales data, city tax assessment data, market absorption rates, and interviews with city staff, economic development specialists, and realtors. The results of the analyses were used to develop a set of key considerations for the reuse of the US Steel Duluth Works site. Historical Context
The City has transitioned, over the past one hundred years, from a predominantly industrial and manufacturing economy into an economy with multiple diversifi ed service sectors, including health care, aviation, higher education, technological, and fi nancial services. Duluth’s current regional and local economy, coupled with its location as an inland seaport, has helped to foster new commercial and residential growth, tourism, as well as has helped to stabilize the city’s manufacturing sector. City-wide initiatives have also served as catalysts, sparking the recognition of Duluth as a major tourist destination. Clusters of restaurants, hotels, and retail stores located in the City’s downtown waterfront district draw both local and foreign visitors.
Key Reuse Considerations for the US Steel Duluth Works site
#1. Community GoalsThe US Steel Duluth Works site is located within a context of neighborhood and city-wide goals and priorities, documented in the City’s 2003 Comprehensive Plan. These goals and priorities need to be taken into account in the reuse planning of the site. Neighborhood District 1 community goals include improved public facilities, recreational amenities, and residential and commercial growth.
#2. Market DemandThe reuse of the US Steel Duluth Works site will likely require multiple non-industrial uses and the stimulation of market interest in the site, in part due to the varied demand for different land uses in Duluth.
Moderate demand exists for new residential development throughout the City. Annual housing demand is estimated at 80 new units per year, but only 63 and 52 units were built in 2000 and 2001, respectively. Zoned land is also available to meet this demand, as 83 percent of the City’s acreage is zoned for residential uses, while 27 percent (9,593 acres) has been developed.
Moderate demand also exists for new commercial land uses, but is highly location-specifi c, according to the City of Duluth. Neighborhood District 1 is not considered a high-demand location for new commercial land uses. The availability of land zoned for new commercial uses in Duluth is currently low, while undeveloped and commercially zoned land is widely available in St. Louis County.
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Minimal demand exists for new industrial land uses in Duluth. Approximately 113 acres of zoned acreage, excluding brownfi eld land, are currently available for new industrial development. Since 1993, new industrial development in Duluth has taken place on 30 acres of land. In St. Louis County, despite the availability of zoned land, there has also been limited industrial land use development.
#3. Size and StigmaThe reuse of the US Steel Duluth Works site will likely require multiple non-industrial uses and the stimulation of market interest in the site, in part due to the site’s unique characteristics, including its large size, history, and Superfund status.
At 640 acres, the large size of the US Steel Duluth Works site poses reuse challenges for a single entity or for a single use. Existing market conditions also suggest that it will take at least ten years or longer for a property of this size to be absorbed by the marketplace. Between 1990 and 2002, Duluth’s economy absorbed 2.5 acres of new industrial development and 27 acres of new residential development annually.
The value of the US Steel Duluth Works site as an industrial resource is based on advantages and forces no longer in operation, including a strong industrial and manufacturing economy in Duluth and the site’s proximity to raw materials. The unsuccessful sale of portions of another Superfund site in Duluth, the St. Louis River/Interlake/Duluth Tar site, reinforces this conclusion. However, transfer of the US Steel Duluth Works site’s ownership from private to public sector ownership, rather than optimizing the site’s market value, could lead most directly to the site’s reuse. Finally, the status of the US Steel Duluth Works site as part of a larger Superfund site may negatively impact the site’s market value, particularly given the availability of alternative development opportunities in both the City of Duluth and St. Louis County.
#4. ZoningThe US Steel Duluth Works site is currently zoned for industrial and limited commercial uses (M-2 manufacturing), which is a result of historical conditions rather than community planning. US Steel began using the site for the production of steel in 1915, while the City of Duluth implemented zoning in the early 1920. In essence, the site was zoned for industrial purposes because industrial uses were already in operation at the site. Since the 1960s, industrial and manufacturing uses in the City have declined, while the City’s diversifi ed service sector has expanded.
To allow a broad range of reuse opportunities at the site, including commercial, residential, and recreational uses, the City of Duluth will need to consider rezoning the US Steel site. Relevant City zoning categories could include the C-1 Commercial District, C-5 Planned Commercial District, and the extension of the Downtown Waterfront Mixed-Use Design Review District. New zoning tools that could be developed for the site include a reuse overlay district or planned unit development designation.
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Conclusions
Current market and land use conditions in the City of Duluth, combined with the US Steel Duluth Works site’s current size, location, and Superfund status, indicate that the real estate market alone may not drive the site’s redevelopment.
Given the site’s physical characteristics and market conditions in Duluth, the reuse of the US Steel site will most likely be a long-term process. Local and regional market conditions indicate that there could be insuffi cient interest in market-based reuses of the entire site at one time. To begin reintegrating the site back into the community in the near-term, however, portions of the site could fi rst be phased for ecological and recreational use. Planning for long-term market-based reuses could either occur simultaneously or as demand for the land rises.
For these reasons, the transfer of the ownership of the US Steel Duluth Works site to the City of Duluth could provide signifi cant opportunities to facilitate the site’s reuse. The City can qualify for state, federal, and non-profi t funding sources that are not available to private landowners. The City can help create a market for future site use by providing redevelopment incentives, including offering targeted site acreage as donations or at minimal purchase cost to interested parties. The City can also designate appropriate portions of the site for public uses such as parks, community gathering areas, and wildlife habitat. Finally, the City’s ownership of the site could allow for a comprehensive, integrated planning approach for future uses at the site, within a context of neighborhood and city-wide goals and priorities.
Photographs of Railroad Along the River’s Edge at the US Steel Duluth Works Site, 2003
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Clockwise from Upper Left: Duluth Works Wire Nail Department, 1923; View from Underneath the Blatnik Bridge; Coal and Ore Bridge, August 1921; View from Atop the Aerial Lift Bridge; (Top and Bottom Left, Courtesy of NMHC Duluth; Top and Bottom Right Courtesy of the City of Duluth)
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US Steel Duluth Works: Future Plans and Next Steps
Moving the US Steel Duluth Works site back into productive use presents signifi cant challenges but also presents great opportunities for all major stakeholders. It is in the best interest of the community residents, the City of Duluth, local businesses, US Steel, the MPCA, and US EPA to return this site to appropriate reuse(s) that fully consider and maintain the site’s remedy. The consulting team recommends the following next steps:
#1. Creation of a more detailed and accurate site map that characterizes what is known and not known about the contamination or potential contamination of different areas of the site. This detailed map would ideally be accompanied by a matrix that would, at minimum, articulate what is known about each area, what use restrictions exist based on current knowledge, and what additional information would be needed to remove these restrictions. The more specifi c that this map can be, the more easily the future use of the site can be planned and implemented. The absence of such a map and matrix is a major impediment to the reuse of the US Steel Duluth Works site.
#2. The site likely needs to be repositioned before it can be redeveloped. It is unlikely that any single large industrial user will fi nd value in existing infrastructure at the site. As such, the site needs to be repositioned and redeveloped over the longer term. It is most likely that the site will need to be divided into zones and redeveloped as a mixed-use area over many years, as the local market absorbs the site’s acreage. The City of Duluth or a local development agency is in an excellent position to undertake the actions necessary to redevelop the site and act as long-term stewards over the long haul for any properties at the site with residual contamination.
US Steel has expressed a willingness to transfer ownership of the site to a local entity. Local offi cials have expressed an interest in the city’s future ownership of the site. While neither stakeholder has made an offi cial commitment and many details would need to be negotiated, preliminary discussions between the parties regarding site transfer should be facilitated moving forward.
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Appendix A: Report Sources
City of Duluth. 2003. Aerial Photography: Comprehensive Plan Component. Duluth, MN: City of Duluth.
City of Duluth. 2003. Demographics: Comprehensive Plan Component. Duluth, MN: City of Duluth.
City of Duluth. 2003. Housing Analysis: Comprehensive Plan Component. Duluth, MN: City of Duluth.
City of Duluth. 2003. Industrial Land and Brownfi eld Analysis: Comprehensive Plan Component. Duluth, MN: City of Duluth.
City of Duluth. 2003. Natural Features / Public Lands & Facilities: Comprehensive Plan Component. Duluth, MN: City of Duluth.
City of Duluth. 2003. Neighborhood District Plans: Comprehensive Plan Component. Duluth, MN: City of Duluth.
City of Duluth. 2003. Utilities Infrastructure: Comprehensive Plan Component. Duluth, MN: City of Duluth.
Duluth-Superior Metropolitan Interstate Committee. 2001. Long Range Transportation Plan: Comprehensive Plan Component. Duluth, MN: City of Duluth.
Minnesota Public Radio. Steel Plant Memories. September 23, 2002 radio broadcast. Duluth, MN: Minnesota Public Radio.
St. Louis County. 2001. Statistical Portrait of St. Louis County. Duluth, MN: St. Louis County Planning Department.
Industrial History: MPCA website: www.100megsfree4.com/adam11fulton/geology/history.htm
Ecology and Recreation:City of Duluth, Western Waterfront Trail brochureIron Trail Convention & Visitors Bureau: Winter-Birding
Urs Geiser, Woodridge, IL, USA, and Bob Fisher, Downers Grove, IL USA, Trip Report: Duluth, December 27-30, 1996
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Appendix B: Planning, Land Use, and Market Analysis Data
This appendix provides additional planning, land use, and market information that informed the Market Analysis section (pp.. 19-21) of the project’s fi nal report.
A. Community Goals & Priorities
City of Duluth: Vision StatementSource: City of Duluth Comprehensive Plan
• Duluth’s 2003 Comprehensive Plan includes a broad vision statement for the future of the City and its neighborhoods: “Duluth’s unique physical beauty and diverse cultural environment creates our competitive advantage. Our people will work together, with respect for each other, to ensure that development is consistent Duluth’s future as an urban wilderness, as a neighborly and safe place to live, and as a place of high-skilled, high-wage employment.
Neighborhood Planning District 1: Community Goals and Priorities Source: City of Duluth Comprehensive Plan Component-Neighborhood District Plans • Maintain and improve important public facilities, particularly neighborhood schools.
• Preserve and enhance recreational amenities in the District, including public access to the St. Louis River.
• Consider new residential development opportunities, particularly in-fi ll and senior housing projects.
• Consider new commercial development opportunities.
• Redevelop the US Steel Duluth Works site as an “asset to the neighborhood,” with consideration given to mixed-use development opportunities.
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B. Existing Land Use Present Land Use: City of Duluth
Land Use Category City of Duluth(except District 3)
Percent of Total District 1 Percent of Total
Low Density Residential 4,754 13.25% 354 5%Medium Density Residential 3,950 11.01% 283 4%Multi-Family Residential 393 1.10% 38 1%High Density Residential 173 0.48% 60 1%Commercial & Offi ce 752 2.10% 26 0%Manufacturing 320 0.89% 106 2%Light Industrial 497 1.39% 72 1%Educational 793 2.21% 20 0%Hospital, Clinic, or Nursing Home 81 0.23% 0 0%Transportation 1,020 2.84% 22 0%Park, Golf Course, or Cemetery 6,924 19.30% 2,615 39%Open Space/ Undeveloped Land 15,273 42.58% 2,980 45%Institutional 938 2.62% 105 2%
Total 35,868 100% 6,681 100%
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C. Market Analysis Data
City-Wide Assessment Data from the City of DuluthSource: Lynn Duncan, City of Duluth Assessor’s Offi ce
City of Duluth: Total Taxable Market Value, 1993-2003
Fiscal Year
Real Estate and Personal PropertyTotal Taxable Market Value
Percent Change
Tax Capacity Tax Capacity as Percent of Total
1993 $1,750,550,500 $35,132,174 2.0%1994 $1,962,310,300 12.1% $37,566,843 1.9%1995 $2,029,369,200 3.4% $39,741,369 2.0%1996 $2,133,020,200 5.1% $41,565,117 1.9%1997 $2,337,380,600 9.6% $41,806,869 1.8%1998 $2,418,809,000 3.5% $39,587,883 1.6%1999 $2,509,647,000 3.8% $39,781,799 1.6%2000 $2,675,003,600 6.6% $43,824,866 1.6%2001 $2,899,770,100 8.4% $35,491,474 1.2%2002 $3,162,476,800 9.1% $37,886,927 1.2%2003 $3,637,655,800 15.0% $43,598,110 1.2%
• Between 1993 and 2003, the total taxable market value of property in Duluth rose steadily from $1.75 billion to $3.64 billion, an increase of 108%.
• The 2002 Minnesota Department of Revenue Assessment Sales Ratio Study indicated that the average market value of properties (land and improvements) in Duluth increased by 20% between 2003 and 2004.
• Tax capacity is a property’s market value multiplied by its property “class” rate, which is determined by the Minnesota legislature. Each class of property (home, cabin, business, etc.) is then taxed at a different percentage of its value.
• Tax capacity as a % of total taxable market value has been shrinking over the last 10 years. The Duluth assessor offi ce notes that the drop in tax capacity as percent of total market value from 1.6% to 1.2 % in 2001 is a result of class rate compression that has lowered the taxes for Commercial/ Industrial property in Minnesota.
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City of Duluth: Commercial & Industrial (C/I) Value (excluding railroads, utilities, or new construction)
Year C/I Value $ Change Percent Change1990 $274,608,300 N/A N/A1991 $277,446,500 $2,838,200 1.03%1992 $286,199,300 $8,752,800 3.15%1993 $310,335,200 $24,135,900 8.43%1994 $337,138,800 $26,803,600 8.64%1995 $338,908,000 $1,769,200 0.52%1996 $364,115,500 $25,207,500 7.44%1997 $390,284,200 $26,168,700 7.19%1998 $424,628,500 $34,344,300 8.80%1999 $441,108,100 $16,479,600 3.88%2000 $462,718,400 $21,610,300 4.90%2001 $483,842,600 $21,124,200 4.57%2002 $505,667,100 $21,824,500 4.51%2003 $611,988,900 $106,321,800 21.03%
• Average percent change, Commercial & Industrial value, in City of Duluth between 1990 and 2003: 6.47%.• Median percent change, Commercial/ Industrial value, in City of Duluth between 1990 and 2003: 4.90%.• Low interest rates and resulting heavy market activity account for the signifi cant 2003 increase.
City of Duluth: Average Residential Sales, 1996-2002
Multiple Listings City of Duluth OnlyYear # of Listings Average Sales Price # of Listings Average Sales Price1996 1,549 $80,722 1,242 $74,7001997 1,594 $81,792 1,228 $76,8001998 1,865 $91,097 1,275 $85,7971999 1,990 $95,362 1,437 $89,9942000 1,953 $102,715 1,412 $97,5382001 2,031 $114,313 1,411 $110,9932002 2,112 $130,714 1,467 $134,114
• The average sales price for homes in the City of Duluth and the surrounding region maintained similar levels of increase between 1996 and 2002, with City residences increasing in value at a slightly faster rate.
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• Factors infl uencing the value of property in Duluth include: location; availability of infrastructure; road access; contamination and stigma; proximity of community amenities (schools, shopping); property condition; condition of adjacent properties; available fi nancing; natural features; and waterfront location.
City-Wide Average and Median Land Values, 2000-2003 Sources: John Vigen, Principal, Ramsland & Vigen, Inc. (Duluth-based real estate appraisal company); City of Duluth 2003 Comprehensive Plan-Housing Analysis Component
Property Type Value Range Per AcreIndustrial $21,870 to $107,593
Commercial $26,136 to $105,851Residential $3,920 to $115,869
District 1 Average Land Values Per AcreSource: Sandy Hoff, Appraiser, F.I. Salter (Duluth-area real estate appraisal company)
Property Value Value Range Per Square Foot Value Range Per AcreIndustrial $.45 to $.65 $19,602 to $28,314
Commercial $1.25 to $1.65 $54,450 to $71,874Residential $.85 to $1.25 $37,076 to $54,450
Industrial
• US Steel is the only site recently offered for sale in Neighborhood Planning District 1. Accordingly, cost per square foot estimates were based on industrial sites with reasonable access and utilities in competitive districts in Duluth. Land values range from $.45 to $.65 per square foot ($19,602 to $28,314 per acre).
Commercial • There have not been signifi cant recent commercial property sales in Neighborhood Planning District 1 or the
City of Duluth. According to F.I. Salter, commercial land values in District 1 range from $1.25 to $1.65 per square foot ($54,450 to $71,874 per acre).
Residential
• Residences in Neighborhood Planning District 1 are located on small to mid-size lots, approximately 15,000 square feet in size. Land values range from $.85 to $1.25 per square foot ($37,026-$54,450 per acre).
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Long-Term Absorption Rates for Residential and Industrial Property in DuluthSource: City of Duluth 2003 Comprehensive Plan-Housing Analysis and Industrial Land & Brownfi elds AnalysisComponents
Approximate Acreage Developed in Duluth, 1990-2002Industrial 30 acres of new development
2,380 of 4,711 acres developedAverage: 2.5 acres per year
Residential Average of 54 new homes per year9,593 of 36,022 acres developed
Average: 27 acres per year
Realtor Interviews Interview 1 – Dave Holappa, Realtor, Holappa Real Estate, Duluth, MN According to Mr. Holappa, the City of Duluth has experienced an exodus of major manufacturing operations over the last 20 years, resulting in multiple brownfi elds within city limits. The City has adjusted to this economic shift by focusing on tourism and the service sector with some success, but has not been able to restore the number of jobs or economic growth previously provided by manufacturing operations. In terms of the demand for industrial land in the City, Mr. Holappa indicated that many potentially interested parties will not come to Duluth due to a lack of large, developable sites.
Holappa Real Estate listed the St. Louis River/Interlake/Duluth Tar (SLRIDT) site, located north of the US Steel site, when it was placed on the market, initially asking $1.25 per square foot ($54,450 per acre) then reducing the asking price to .75 cents ($32,670 per acre). Holappa indicated that companies were interested in portions of the property, but not the entire site. The largest parcel of land under consideration for purchase was 15 acres.
Interview 2 – Andy McDonough, Business Development Director, Duluth Seaway Port Authority
According to Mr. McDonough, new industrial growth in Duluth has been minimal – 30 acres in the past 12 years – due to a lack of available land in the City. Currently acreage available in the City includes a 30-acre waterfront site with deep-water access currently available, an 11-acre, infrastructure-ready property at the city’s industrial park, and 55 acres of land suitable for light industrial uses.
The Port Authority shares the City of Duluth’s interest in new industrial development, emphasizing that the lack of large sites in Duluth is a signifi cant issue. Mr. McDonough maintained that, despite the apparent lack of market demand, industrial uses would locate in Duluth if sites were available. Mr. McDonough also indicated that maritime industrial operations in Duluth should be protected and sustained. Once waterfront acreage is developed for recreational uses, it can never return to maritime uses, and the City has fi nite waterfront acreage and deep-water harbor space.
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The Port Authority does not track the demand for maritime land uses in Duluth or in surrounding localities, but Mr. McDonough reiterated the importance of Duluth’s port to the City’s economy – the port provides 1,944 jobs, generating $170 million in annual regional economic impact.
D. Duluth: Social and Economic Characteristics General • Duluth and St. Louis County share several characteristics in common. Both localities have faced long
transitions from industrial and resource-based economies to economies built around services and tourism, with jobs and population levels only rebounding between 1990 and 2000. Both localities rely on educational, health, and social services, retail trade, and entertainment and tourism as their core economic sectors, with the port serving as a continued economic mainstay. The economic resurgence of the 1990s resulted in soaring home values and low unemployment until the recent recession in both localities, with City residents increasingly moving into the County. The population in both localities are predominantly white and aging rapidly, with the baby boomer generation on the cusp of retirement.
• Between 1973 and 1982, Duluth lost three major employers: US Steel, which served as the primary economic
mainstay for the City’s economy for 75 years, closed its plant facilities in 1973. In 1981, the Department of Defense closed the Duluth Air Force Base. Finally, in 1982, a local food processing company moved its operations from Duluth to Ohio, resulting in the loss of 950 jobs. By the mid-1980s, Duluth had the second highest metropolitan unemployment rate, and the highest worker out-migration rate, in the United States.
• Recent economic revitalization efforts in Duluth included the conversion of the Duluth Air Force Base into
a federal prison, a $75 million downtown revitalization effort fi nanced by converted federal transportation funding, and an economic restructuring that focused on the expansion of the city’s wood products industry, back offi ce business support operations, and aviation-related technology companies. Today, manufacturing jobs remain at 50% of pre-closure levels, with service sector jobs having fi lled the gap.
Population • Duluth is part of the Duluth-Superior Metropolitan Planning Area (pop. 145,166), the second largest MPA
in Minnesota. The Duluth-Superior MPA’s population peaked at 164,000 in the 1960s. Some communities surrounding Duluth and Superior have doubled in size since 1950, but most are all small cities or townships, with populations less than 8,000.
• 1970s-1980s – Duluth experienced high levels of population out-migration due, in part, to declines in several
key industrial sectors.
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• 1990s-2000 – Duluth’s population begins to stabilize and the City experiences some job growth recovery. Population increases are primarily due to increased enrollment in local higher education institutions and from in-migration.
• City’s 1990-2000 population growth was primarily centered in its outer Neighborhood Districts (4 & 10) while
population declined in its inner Districts. • Portions of the City’s young population (25-39) and elderly (60-79) declined between 1990 and 2000, by
approximately 20%, while the City’s baby boomers (40-59) surged by 60%. Economy • New business sectors in City of Duluth include technology, health care, aviation, and higher education. • The City of Duluth is now a center for tourism, education, fi nancial services, health care, aviation, high-
technology, and international shipping. 3.5 million people visit the city annually, generating $260 million in tourism revenues.
Employment • One to three hundred new job openings are projected for most of Duluth, with 301-600 new jobs projected in
the Port area by 2025.
• 64% of Duluth’s population (>16) is in the labor force. The City’s available labor force increased by 12.7% between 1990 and 2000, while the population not in the labor force decreased by 8.6%.
• The majority of people in Duluth are employed in educational, health, and social services (29.5%), retail trade
(14.3%), and entertainment, recreation, accommodation, and food service (11.6%). Employment decreased in the farming, fi shing, and forestry sectors of St. Louis County between 1990 and 2000.
Port • The Duluth-Superior port is one of the largest inland seaports in the world, ranking #1 in the United States
in iron ore and grain loading and 5th nationally in coal loading – 40 million metric tons of cargo (90% bulk) exchanged annually. The port is located within a 100-mile radius of over three-fourths of U.S. iron ore deposits.
• The Duluth-Superior port provides 1,944 jobs, generating $170 million in annual regional economic impact. The port is operated by Duluth Seaway Port Authority.
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Housing • Development “hot spots,” as measured by the number of residential building permits granted in 2000, were
located to the south of the City of Duluth, as well as the Superior Township, Parkland, and Lakeside areas. • Average household size in Duluth has been decreasing due to shrinking family size and aging of the baby
boomer generation. • Housing density is greatest (> 10 units per acre) in the City’s original core area, less dense to the north,
south, and west. • The City’s home-ownership rate of 64.1% is below both state (74.6%) and national (66.2%) averages. This
means that there is a greater number of rental units than ownership units in Duluth. • The City of Duluth has an older mix of housing stock – 71.5% of structures were built before 1960.
• The City’s median housing value increased by 79%, from $45,500 to $81,600, between 1990 and 2000. • Household and family income levels in Duluth increased substantially between 1990 and 2000, but remain
signifi cantly below state and federal averages. • Household income levels are highest in the northern and western portions of the City, extending into St. Louis
County. • The Duluth-Superior MSA ranks as the 41st most affordable housing market out of 191 MSA’s tracked in the
United States.
• Planning documents indicate that there is a continuing demand for new senior housing to meet needs of Duluth’s growing elderly population.
• In 2002, Neighborhood Planning Districts 1 and 2 experienced the lowest rental vacancy rate in Duluth (the
Districts have virtually no rental units). • Duluth gained 115 new housing units in 2000 and 2001, with demand projected at 80 units annually. • According to the Housing Analysis Component of the City’s Comprehensive Plan, Duluth has 16,646 acres
of vacant land, 13,815 acres of which are zoned residential. Taking into account fl ood plain and wetland areas, slope, and the availability of sewer services, 3,071 acres in Duluth were identifi ed as suitable for new residential construction. The analysis also indicated a potential need for apartment buildings and townhome developments, as only three percent of the city’s undeveloped residential areas are zoned for these uses.
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• In Neighborhood Planning District 1, 943 acres are available for residential construction, with 486 acres
considered suitable for residential development due fl ood plain and wetland areas, slope, and proximity to utilities. Based on the current zoning of the these 486 acres, a maximum of 2,344 dwelling units could be built in the District.
E. US Steel Site: Adjacent Land Uses
Adjacent Land UsesSource: 2000 Land Use Maps from the City of Duluth’s Comprehensive Plan
North • Morgan Park Neighborhood (low to medium density residential, lesser amounts of multi-family residential, a
small amount of offi ce, commercial, and manufacturing space, a mid-size education area [Goodfellowship Community Center], two neighborhood parks and recreation areas [Blackmer Park and Morgan Park Community Recreation Center], and a large natural area [Magney Snively Park]).
South and East
• St. Louis River and the City of Superior, Wisconsin
West
• Universal Atlas Cement site, a 75-acre brownfi eld site that abuts the northwest border of US Steel; the site is being considered for a tax abatement program aimed at encouraging new industrial development.
• Large manufacturing and light industrial site opposite the Universal Atlas Cement site.
• Gary-New Duluth Neighborhood (Primarily low to medium density residential, lesser amount of multi-family residential, two mid-size education areas [Stow Elementary School and Gary-New Duluth Community Center], one neighborhood parks and recreation area [Gary-New Duluth Community Rec Center], two mid-size manufacturing and light industrial areas, and a mid-size institutional area [LSC Fire Training School]).
• West of Gary-New Duluth there is an extensive amount of vacant land and parkland.
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