The St. Louis County Board is debating whether or not to settle a $190,000 lawsuit filed back in 2017.
The St. Louis County Board will meet soon to vote on whether to approve a $190,000 settlement agreement to end a lawsuit filed back in 2017 by Paul King and Eric Ringsred, the former owners of the building that once housed Kozy Bar and Apartments and St. Regis Apartments. According to the lawsuit, the “county foreclosed on the property too quickly, denying any chance at a repurchase, as well as unlawful seizure and sale by the county to the Duluth Economic Development Authority (DEDA) in 2016.” The suit further argued the property was seized when “King still held partial claim to the tax-forfeited property” located in downtown Duluth.
DEDA is listed as the defendant in the suit, and the proposed settlement would cover claims detailed out against it in the lawsuit by the plaintiffs. Additionally, the settlement “would allow the county to avoid the expense and risk associated with further litigation.“
What happened, though? How did the plaintiffs lose the property in the first place? Was there anything wrong with the building?
The property at the center of the suit is Pastoret Terrace, which is located in downtown Duluth on the corner of First Street and Second Avenue East. The property is an 1887 Oliver Traphagen-designed building and “long housed the Kozy Bar and Apartments.” Unfortunately, the building became damaged by multiple fires over the years. The most recent fire happened back on November 1, 2020.
In a letter about the proposed settlement, the county board said, “The settlement terms are reasonable given the facts and circumstances of the action.” It added, “St. Louis County is entering into the settlement agreement solely to avoid further burden.” As part of the settlement, a portion of the funds “will be used to pay the outstanding taxes, assessments, penalties, interest, and costs assessed against the parcel of property once known as the St. Regis Apartments.” Any funds leftover will be used to “reimburse the plaintiffs for certain costs incurred in maintaining and repairing the St. Regis Apartments.”
Back in January, DEDA was court-ordered to “temporarily stabilize the facade of the Pastoret Terrace building” until the case reaches closure or a settlement is approved. St. Louis County took over control of the property soon after Ringsred lost ownership of the building due to tax forfeiture. From there, the county sold the damaged building to DEDA for $75,000, “and later provided DEDA with $325,000 in funding for the property.”