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Welcome to in business.

I'm Ken Beller.

Thank you for joining us.

We're at 521 West 2nd Street here in downtown Duth in front of the old St.

Louis County Jail.

Ah, the jail.

So many fond memories.

Oh, no, not of me.

I'm talking about the fond memories being made by the people and family that live here and now call Leyona Apartments, not the jail, but Leona Apartments their home.

Because that's our topic this week on In Business.

We know that Duth is facing a housing crisis.

We need thousands of more units by the end of this decade.

One way to do that is to repurpose old buildings into new uses, like the jail for instance.

And another one that we'll visit, the Northwestern Bell building, again being repurposed, an historic building with a new reuse.

Now, a lot of property owners and developers will tell you that, well, that's impossible.

The infrastructure isn't there to take a building like a prison and turn it into something that has the plumbing, has the electrical that could be made into apartments.

We'll introduce you to some developers that say that's wrong.

You can do it.

And that's why we'll introduce you to Leyona Apartments.

We'll also take you to Northwestern Bell building and again show you how some developers have turned old buildings into new properties to help the city's housing.

And at the same time, we'll take you to a robotics place, a new special space just for that purpose.

It'll be a lot of fun to see.

It's all this week on in business.

Welcome to In Business.

I'm Ken Ber.

This week, we're looking at building reuse and how old buildings can help address the need for more housing.

Across the region, developers are finding new uses for buildings that are no longer serving their original purpose.

First, let's visit the Northwestern Bell Telephone Building in its new role.

This is in business.

I'm Ken Buer.

Mike Pupar is with me.

Mike is the owner of Blue Stone Construction and we're in the Northwestern Bell building here in the Indian neighborhood of Duth.

We're talking about reuse of old existing buildings into what Duth is allegedly in need of and that is more housing.

One survey done said 6,000 new housing units will be needed by the end of this decade.

And one of the ways to find them is in old buildings like this one.

The Northwestern Bell building was built in the 1920s and it was the Hemlock Exchange building and served as a hub for the telephone company back in the day, but today it's housing.

And Mike, congratulations on the renovation of this great space.

Thank you.

I appreciate it.

And yeah, it's been a long haul and uh we had a lot of great people behind me, everyone from bankers to the city to everyone else that were behind me and steadfast with me and um yeah, it's really it was a fun journey.

So that journey started back in how long ago?

like 2015.

So that's when you bought the building.

That's when I bought the building in 2015 and uh bought this building and then there's a home right behind us as well.

And so and that was part of the deal that he wanted to sell both at the same time.

So I bought both properties and it used to be the rectory for the old unarian church.

So which is next door which is right next door.

So now this of course went through several different u uses over time.

It was the recycler bell which was a performance uh space uh for emerging artists for a couple of years.

Yeah.

And then it sat vacant for a while.

Yeah.

Um there's Yeah.

Like like I said, there's been a number of owners through here since uh Northwestern Bell sold it.

Um back in the early 80s, I believe it was.

Um there's I was thinking it might even been earlier than that in the 70s when they actually decommissioned it, but it was in the 80s that it sold.

And yeah, there was a group in here that um they called it the Recycl.

And cuz this whole structure was just wide open spaces, there weren't any walls or divisions and stuff like that.

And they actually used to have concerts down on that lower level where there's 16 ft ceilings and um so yeah, there's talk of that low was here at some point and all kinds of different uh musicians have come through here and things.

So got their start here.

Got their start here.

Yeah.

Let's start with the process that you went through to convert this.

Now, some people say that uh converting an old building is very difficult because you don't have the plumbing for every unit you need for each apartment.

How did you tackle that problem?

Um, well, the greenest building that that that is out there is the one that's already built.

Um, and that was kind of my approach to this.

Um, you know, I had a shell here to begin with.

Um, you know, and it took, you know, when I bought it in 2015, we took three years just to put the plan and the financing together just to get it, you know, underway.

um you know and so and even new buildings don't have plumbing or electricity or anything else or infrastructure.

So um it was with this structure it was pretty easy to come up with because we had these natural divisions with columns and uh stuff like that to create divisions between apartments and things like that.

And so we were able to you know bore through the concrete and stuff like that you know for each floor and you know to install all the plumbing and electrical and things like that and bring and serve each unit that's in here.

So, and let's talk about the units that are in here.

Um, what's the configuration on each of the three floors?

Uh, well, on the first floor there's four units and then, uh, the second floor there's six units, and then on this third floor there's a single unit up here.

So, um, we didn't put closets in because nowadays everyone's into these modular units and stuff.

We didn't want to take up the footprint and stuff.

So, so this would be the bedroom.

This would be the bedroom.

Um, right here is the bathroom as well.

full shower and all the accutrans with it, you know, handhelds and everything else.

And then here's the kitchen uh you know living space kind of a shared kitchen living space uh with loft area above and uh tenants are welcome to use that for storage or whatever they want.

Mike Pupory, developer of the Northwestern Bell building.

We're talking about reuse of existing buildings, old historic structures and finding new uses like apartments here in the city of Duth.

And you're also in a neighborhood setting, which I think is nice.

Yeah, this was great here.

Um had enough room behind the building to um provide off- streetet parking and stuff.

And I mean, we have the plaza, you know, just blocks away.

Walgreens and hospitals just blocks away.

Um so, yeah, really, really a great location.

and really fortunate to have come across this.

So Mike, you mentioned that Duth has a wealth of old buildings.

People come to see them, appreciate them.

Now we're trying to find reuses for them.

What advice would you give to somebody that possibly is looking at taking an old building such as you did and try to find a new use for it in the housing realm?

Um in the housing realm, I would say just patience.

um you know to come up with a plan um and have the financial wherewithal too because it does take a little bit to um well even new new construction it takes financial wherewithal and um you know so patience um you know to get the plans together.

Um I mean this the city was great to work with.

Um they you know bent over backwards to accommodate me.

They we had this joke that I had one of the longest standing building permits out there and so they keep giving me a hard time about that but you know I deserve it.

Um you know so we got that and um you know and a a bank a financial institution that you know just went over backwards for me you know and um I'm just really fortunate in all those respects.

Um and not everybody's gets that lucky.

Um, you know, I think with going into, you know, an older building and things like that, you got to have some type of foresight and, um, you know, with what you want to do with it and, you know, so that you can make it work financially as well.

So, stick tuitiveness.

Absolutely.

Yeah.

Yeah.

Took a long time to get this done to this point.

So, Mike Por is the owner of Blue Stone Construction.

We're talking about rehabbing old buildings into new uses, in this case, apartment buildings.

Mike, thanks for being on In Business.

Thank you.

I appreciate it.

Appreciate you coming out.

That's one example of an old building getting a new life.

Next, we're taking a look at another building reuse project.

This one in a former jail.

Our guest is Megan Elliot.

She is the founder and CEO of Jill Pine and several other companies that specialize in the reuse of old buildings for multiple purposes.

And the one we're talking about is the old St.

Louis County Jail, which has now been repurposed as living quarters for people as we try to solve the duth housing crisis, which we are told needs 6,000 more units by the end of this decade.

Megan, thank you very much for being a guest on In Business.

My pleasure.

Thank you for having me.

Now, you have a reputation for finding ways to rehabilitate older historic structures into multiple uses, and we're talking about apartments at this particular point.

What attracted you to this kind of work as your career?

Yeah, I appreciate the question.

Um, I get this question a lot.

I was in school in California in 1989 during the LMA Pria earthquake.

And a lot of people think about this as being a San Francisco earthquake, but it was actually epicentered in a small town called Santa Cruz.

And that's where I was going to high school.

And that town lost nearly all of its historic downtown during that, you know, 5-second event.

And I remember in the days following that event, of course, everyone's feeling an incredible sense of loss.

They've lost homes.

They lost properties.

Our our whole downtown is wiped out.

But I also remember a lot of people walking around feeling frankly just physically lost.

And I started thinking about how much we use the physical world around us to navigate.

And the fact that we I think we build ourselves, our memories, our our community into the buildings that are around us.

And when we lose those buildings, we lose a sense of self.

We lose a sense of place.

And so at that point in my life, that early point in my life, I decided that it was going to be my goal, my mission to try to retain and reuse as many of these buildings as possible.

And that brings us to the building in downtown Duth, the old St.

Louis County Jail.

Uh built in 1923.

Uh Abraham Holstead and William Sullivan were the architects, but they were kind of following in the uh DH Burnham uh city beautiful plan.

He had uh laid that out for the World's Fair.

It caught on.

He did several buildings in Duth including the layout for the civic center where the old uh jail is just off from where St.

Louis County courthouse is, the federal building and Deluth City Hall.

What attracted you to this particular opportunity?

I think that there's a maybe a misperception that I I fall in love with a building or I fall in love with a piece of architecture, but actually what I fall in love with is I fall in love with a solution.

So, first of all, no one falls in love with a jail.

But second of all, I'm looking for ways of taking these I'm going to call it like obsolete white elephant buildings that are dragging down a community and finding a way of repurposing them to meet what I understand to be a city's goals.

In this case, we were talking about downtown housing.

So, reuse of that, the St.

Louis County Jail.

Yes, it helped solve a problem the city was tackling, which was downtown housing.

It also created jobs.

It generated economic development.

and it kept literally hundreds of tons of materials out of a landfill, not to mention retaining our heritage.

So, I'm looking for the right opportunity.

I'm looking for alignment of a city and a community around a set of goals.

Then, I'm looking for that obsolete building that I can use to meet those goals.

Megan, you mentioned one of the things of keeping the uh waste material from a tear down out of a landfill.

Uh keeping it green and reusing it.

Uh and that would have been the case with the jail.

It was closed in 1995 and was almost torn down twice.

Uh in fact a city council reprieve uh made it available for your work.

What did you actually do for this project?

Sure.

Um I am in this in this case I'm playing the role of real estate developer and as a real estate developer it's your job to orchestrate all of the many pieces that need to come together to make these projects successful.

That includes things like the planning of the project, the design of the project, the construction of the project, the team, and of course ultimately assembling the financing for the project as well.

And so you're really acting as a I'm going to say almost like a movie director pulling all of these different moving parts and pieces together.

And I've sometimes heard it described as you're trying to land a plane while the wings are falling off because there's so many things going on with these buildings and with these projects to put them together.

This had some particular obstacles in that one.

Oh, yeah.

It was a jail and the bars were a problem.

Yeah, you're exactly right.

This is a a very unique situation.

I'll say um every building that I work on and I I work as both a developer as well as a consultant.

Every one of these buildings has has a challenge, at least one, sometimes many.

In this case, this building had I'm going to say many challenges.

I mean, you noted that it was vacant for over 20 years and multiple development attempts on it, but you did also mention this the structure itself, and this is a unique building in the way that was built.

If if you've seen the building, you know that it has a a very um classic uh robust exterior granite facade that is is it's quite decorative actually for the original purpose it served as a jail.

But on the inside, what many people might not be aware of is it was stacked with steel cells and those steel cells were the structure itself.

So each set of steel cells held up the concrete floor above it and so on and so on.

And so one of the biggest things I think that kept people away from this building from a development perspective or a redevelopment perspective is that how do you work with literally 93 6tx 8 foot cells that are all holding up the floors.

And so one of our big challenges was to figure out how to open up the 6' by 8ft cells and to be you know modern I'll say modern dimensions for living while maintaining the structural supports of the concrete floors.

And so this was one of the key challenges we tackled with our design team, LHB, as well as our general contractor, Gardener Builders, to come up with both a structural solution, but also like a construction sequencing solution of being able to bring in the new steel and then take out the old steel, keep the whole building up.

And at the end of the day, if you've been inside of the building or when you go inside of the building, you'll see that we actually did keep as much of the structure as we could because that structure itself does hold up the floor.

So when you go into it, we're trying to make it homes, but it definitely you can see the history of this building as you walk through it with those bars that we've kept in place in some locations.

Transitioning uh the name from what may not be attractive to everybody as the St.

Louis County Jail.

You've renamed the project Leona.

What does that mean?

Yeah, thank you for the question because um you know, as a developer, I had some concern that I wouldn't get anyone who'd want to live in a building called the jail or the jail apartments.

So, we did uh work with a company called Fellow who helped us think about how to make this I'm gonna say very austere um institutional hard building into a place that someone might want to live.

And one of the strategies that we took was to try to bring life into the building, including changing the name of the building.

So, we do refer to it as Leyona now.

And Leona is the Finnish word for lion.

And the next time you're at the building, if you look up on the exterior of the building, up in those upper corners, you'll see that there's lions carved into the building.

You'll also see throughout the whole civic center district that there's quite a few lions carved.

Financing has got to be one of the hardest parts of this.

How do you attack that?

And what are some of the keys to making that successful?

Yeah, let me start by saying that uh these projects are hard and especially housing projects and you don't have to look look too far to hear someone saying that it's really hard to create housing today and certainly creating housing in a historic building and not and not just any historic building but a historic building that served a very different purpose add some additional challenges.

Projects like this are only possible when we have alignment of multiple stakeholders around the table.

And I I can say I bring, you know, the private developer both perspective as well as resources.

I can access things like state and federal historic tax credits for a project like this.

But I also need key players to the table like the city of Duth.

The city of Duth was a key part of this solution because they were able to bring sources that they can access as a public entity.

So, for example, they were instrumental in bringing tools like tax increment financing, a housing trust fund loan, as well as environmental cleanup funding, and I'm going to need as a developer all of these different pieces to stack on top of each other to make these projects work.

In the explanation for financing, you mentioned the state historic credits.

Explain what those are, and I know that you were very instrumental in having those renewed in the nick of time, I might add.

That's right.

Actually, not just in the nick of time, but we did actually lose our program for a year.

And I should point out that we we in the state of Minnesota, developers, people who live here, we are very fortunate that we have one of the best states for our state historic tax credit program because our state has um a program that is uh honors any project that accesses the federal historic tax credits.

We don't have an annual cap.

We don't have a per project cap.

And so what this means as projects like Leyona as well as projects like the book match, they can access this important tool that frankly these buildings wouldn't be possible to do without our state historic tax credit.

That being said, as you mentioned earlier, this is a legislated program and we do need our legislators to support this program.

In fact, every 8 years it comes up for renewal.

And so I would I always tell people that if these buildings are important to them, this is a great tool and please let your Minnesota legislator know how important this tool is.

How can you tell at the end uh whether you were successful?

I mean, obviously if it's a housing uh development and they're all full, well, that would be part of it.

But how do you measure success in the world that you work in?

Yeah, that's an interesting question because I think in our world and I'll say our world of you know design and construction and building reuse sometimes we we get so we're so focused on the project.

We're so focused on the architecture design and and the contractor and the construction and was it on time when we delivered it?

Was it on budget?

But we forget that we're not just building for today.

We're building for the next generation on these buildings.

So I have to measure success not only in the context of the project itself but I also need to measure your success in what does it look like today what does it look like tomorrow what's going to look like in 10 years and that comes down to well first of all did I solve the problem I set out to solve like are there people living there one two do people like living there and those are two slightly different questions but then you know also um these buildings have to be financially sustainable and it's it's no secret that it is hard to keep housing affordable today and it is hard to I'm going to say um walk down icy sidewalks in Duth in the winter.

So there's a lot of things that go into making a building livable and I think that is like I said one of the measures of success that we forget about is that this project is not just about today but it's about tomorrow and the next generation.

Megan, thank you for joining us.

Thank you for having me.

Now let's take a look at some of the latest business news from around the region.

First, Msabi Metallics is planning an $18 billion investment that would connect its iron ore mine on Minnesota's glorious Msabi Iron Range with a new steel complex in Iowa.

The company says $15 billion would go towards the Iowa facility with another $3 billion being spent to complete the Minnesota mine.

Two major Minnesota health systems are planning to combine.

Health Partners based in Bloomington and Essentia Health based here in Duth have announced an agreement to merge pending regulatory approval.

The combined system would include 22 hospitals, more than 135 clinics, and about 45,000 employees.

The organizations expect the combination to take effect January 1st, 2027 if approved.

And finally, a sweet way to support local military members.

Rocky Mountain Chocolate Factory in Duth is bringing back its annual fudge for troops promotion.

Throughout the month of October, for every pound of fudge purchased at the Canal Park Store, Rocky Mountain will send a matching pound to military personnel from the Duth area who are serving overseas.

Next, we'll wrap up this week's show by shifting gears and taking a look at a new robotic space in the city of Duth.

My name is Patrick Mke and I am the general manager.

I run um 3D Robotics DUTH and it's a local nonprofit that uh kids K through 12 can be a part of.

It's not affiliated with any school.

So we have kids a lot primarily from Duth but we have Hermantown, Cloquet, Renshaw, Esco, Two Harbors, Superior, South Range and probably some other towns I'm not remembering right now.

Um but we have a wide v variety of students um from around the area.

Um and we run K through 12 program in this suite.

This is our tech space.

Um we call this the forge.

Um, and this is for 7th through 12th graders.

And you're building robots that compete on a 12t x 12t field.

And those robots are traditionally made out of metal.

Um, students also learn CAD and they do 3D printing of their parts.

And then some students are even doing custom manufacturing with some of our sponsors.

So they'll help cut aluminum parts and stuff like that.

We just moved into um the tech village downtown.

Um, and so we are as centrally located in Duth as you can be.

Um, and so we're super happy to be here and hope that we have a bunch of people come and take a look.

Oh, I'm so excited.

So, um, we love life and vibrancy in downtown, especially in our vacant spaces.

Um, it's always fun for me to meet and greet new tenants, but I think when, um, you know, younger generations, especially children's are in a building, it makes such a difference between the feel and the vibe.

So to see the kids here and see what they're doing and interacting, you know, before and after schools.

We had a little taste of it throughout the summer, but now it's kind of starting to come full on board.

So it's just it's fun to see.

I'm Kirby Underberg and I'm the vice president, general manager of the Great Lakes region for IMON Communications.

We're a technology based company and we embrace technology.

So in Duth, we're coming up here, we're building uh fiber network across Duth and Superior.

We're spending $120 million of our own money to build this.

This is an opportunity for us to serve the community.

Uh give the residents and the business here a choice on different services.

We're very excited to be part of the 3D robotics in Duth.

STEM is so important for our youth these days to you know learn those skills of the engineering the you know I just asked over here they they uh make the components and they compete.

Uh it's a tremendous skill for these kids to learn growing up and it translates as they get older and we're in a technology business and we are very much part of growing the next generation of technology leaders.

We're uh committed to the communities we serve.

Uh we have an IMONSS give program that got us involved with this where we're uh donating $100,000 to nonprofit organizations across Duth and Superior.

And I was just over here talking about it.

I'm excited to see how it goes and sounds like they they do very well in competition.

So, we're excited to be sponsors of it and learn more about it.

And once you get here, I always say it's like running a small business um for each of these teams because they so they get a challenge um so that's the customer let's say and then they are building a product, their robot um to meet the demands of the customer.

So whether they have to pick balls up off the field like last year and shoot them um or they have to pick other artifacts in various places and put them somewhere else um that's what the customer wanted.

So that's what they're building.

Um and then they need to document their process.

Um they need to market it.

So they go to um judging sessions where they'll have two to three judges.

um they'll need to talk about the process that got them from kickoff to what the judges see in front of them.

Um and it's more than just robots and programming.

Um they also talk about how many um business connections did you make in the community?

How many STEM professionals came in and talked to you about your robot ideas?

um at the younger level they even do an innovation project and that's where um every year kind of has a theme.

So there's a professional that might talk to them about archaeology or what their solution is to a problem in the field of whatever the theme is.

Um and so it's it's ways for students to really interact with adults in a kind of different way than what they're used to in a school setting.

Um, and that all leads to, um, when you get older and you're graduating high school and you're going to college and jobs and, you know, whatnot.

Um, everyone's always looking for what makes you different than than the person next to you.

Um, and if you can say, "Hey, I've learned how to respond to my customers, um, and do these challenges, and I've learned how to talk about how to like the process that I use, and, um, I know how to document, and I can put together a 15-page portfolio to show you the evolution of our robot and, um, whatever else we've done that season."

Um, that sets you really far apart.

Thanks for watching In Business.

Now, if you missed any parts of tonight's show, you can always watch it at pbsnorth.org or listen on Mondays at 5:30 on the North 1033.

Thanks again for watching and until next time, let's take care of each other.