The Fond du Lac Band of Lake Superior Chippewa has purchased an old downtown Duluth hotel for expansion of the Fond-du-Luth Casino, but those plans are on hold as the band and city continue to fight over casino profits.
The move has sent 20 low-income
“This was all I needed. Nothing fancy, but decent, and a low price,” said resident Tom Wiles, who said he paid $300 a month for rent that included all utilities. “I was able to save a little money up now and maybe I can buy a van or truck or something.”
Wiles said he plans to move back to Lawrence, Kan., where he lived before moving to Duluth last year.
Tribal Chairwoman Karen Diver said Monday that the band wants to upgrade and expand the casino and plans to use the hotel property at 27 N. Second Ave. E., across the alley from the casino. But she said any expansion is on hold pending an outcome of the band’s effort to change a 1994 agreement with the city of Duluth that gives the city a share of the casino’s profits. The city is pushing the dispute into court arbitration.
“We want (Fond-du-Luth) to get bigger and better,” Diver told the News Tribune. “But we aren’t going to go to that expense if we have to hand over a third of our profits to the city.”
The band closed the deal to purchase the hotel at the end of December, Diver said. It had been owned by an estate through Wells Fargo Bank in the Twin Cities and managed by a local company, she said. The purchase price was $318,000, according to city records.
Squeeze on low-income housing
Residents said they found out just last week the hotel is closing. They have been told they have until March 31 to find new housing, “but we can work with people if they are having problems finding a place,” Diver said. “They were all on month-to-month leases, so we gave them proper notice.”
The single-room occupancy hotel serves about 20 low-income residents who have little extra money available to rent traditional apartments, and the closure continues a trend of lost housing for low-income residents. The apartments were not subsidized by any agency.
“I feel I was luckier than others because I was able to find a place right away,” said Daisy Ostman, a resident. “A lot of people haven’t found anything yet. I’m also luckier because I have two jobs and can afford a little more.”
Many of the Carter Hotel’s residents are on Social Security disability, she said.
Cully Peterson, a housing advocate for Churches United in Ministry downtown, said the hotel originally served tourists, especially Canadians, who came to Duluth to shop at the old Sears Roebuck store where the casino is now located. For the last couple of decades, the hotel has served several local agencies that seek housing for low-income residents who don’t receive federal housing subsidies.
“The integrity of the building hasn’t changed, inside and out; it’s in pretty good shape,” Peterson said.
While Peterson feared some residents might wait until the last minute to find new housing, most should find a place to stay.
“It’s going to be a challenge,” he said. “But there’s all good people involved in (the sale), so I’m confident this will work out for everyone.”
While residents like Wiles used the Carter as short-term housing, some people lived at the hotel for years, said Steve O’Neil, St. Louis County commissioner and a housing advocate who works with CHUM.
The Carter “has been reasonable housing for a very low cost, and there are fewer and fewer of those options available” in Duluth, O’Neil said. “The band will work with them to find places, I’m sure. … But the supply of that kind of housing is not great. No one is building that kind of low-income housing.”
O’Neil noted that about 40 other low-income people lost their apartments in November when fire struck the Kozy Bar and Apartments on the next block up the hill from the Carter.
Businesses affected
Dan Johnson operates Johnson Auto Repair out of the lower level of the three-story brick building. He said he’s having a hard time finding another shop downtown at a reasonable price.
“My customer base is people downtown who work in the offices, so I need to be down here. But I haven’t found anything I can afford yet,” Johnson said. “It’s going to take me a month to (move everything) out of here, so I need to find something fast.”
Johnson said he heard the hotel building might be used for casino offices or parking.
Diver said it’s not yet clear whether any casino expansion, if it happens, would involve remodeling the existing hotel building or tearing it down.
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