The Duluth Economic Development Authority approved a land sale Wednesday night that is expected to lead to the construction of a new 5,000-square-foot warehouse/office facility in Gary-New Duluth.
The proposed building would be occupied by TruGreen, a yard-care company that is expected to provide the equivalent of seven full-time jobs paying $14 per hour. The business provides lawn, tree and shrub care. It's now located in Superior, but Operations Manager Eric Larson said the firm is eager to relocate to Duluth.
Larson said the Pequot Lakes-based venture is not corporate-owned and acquired the Superior operation 10-12 years ago, roughly doubling its customer base since then.
"We need a bigger shop, and we'd much rather be in Minnesota than Wisconsin," he said. "We're looking to grow. We would like to double it (our business) again from where we're at to get it on pace with our other branches."
The would-be developer of the facility, Sumday LLC, is expected to close on the property, which was formerly part of the Atlas Cement site, by July 1, purchasing the parcel for $20,200.
"We arrived at the price through a long and arduous process," said Chad Ronchetti, a business developer for the city of Duluth, noting that the pending sale to Sumday is DEDA's first at the Atlas Industrial Park since Ikonics Corp. moved there several years ago as its anchor.
"As I think many of you know, we started out at $25,000 an acre for Atlas. But through a series of hard knocks, we learned quickly that price wasn't quite at market rate. We have some geotechnical challenges at the site. We also have some existing soil conditions at the site that, should the soil be exposed, could lead to some high pH levels in the water system," Ronchetti said.
DEDA initially offered the property to TruGreen at a price of $5,200 per acre, and the company countered with only a slightly lower offer.
"Given that DEDA has held the property for so long, and holding costs are going to start stacking up, we thought it was in the best interest to move that property and to relocate a business from another operating location to Duluth," Ronchetti said.
The developer has pledged to invest at least $250,000 in a new facility for TruGreen. Construction should be completed by no later than Nov. 1, 2021.
As part of an agreement, DEDA will hire a firm to complete an environmental assessment of the formerly industrial property. If that assessment reveals conditions Sumday considers unacceptable, the developer will have the right to terminate the purchase agreement within 30 days of receiving the report.