Northeastern Minnesota rail town getting its first major development since the 1940s

PROCTOR, MINN. – A northeastern Minnesota railroad town that hasn’t seen major development since the war-fueled prosperity of the 1940s is now poised for growth, more than 80 years later.

A project spearheaded by local developers will break ground in Proctor next year and is expected to include up to 360 housing units, a sports dome, a hotel and a grocery store in a park-like setting. Proctor, a city of about 3,000, is near Duluth.

The scale of the development in the southern half of the one-mile-by-three-mile city amounts to a new neighborhood, city officials said. The 90 acres of land sit off Kirkus Street, built a little over a decade ago to give residents a second way to the western side of town that doesn’t cross railroad tracks. It allows access to an area the city has unsuccessfully marketed for sale for several years.

The rail yard that dominates the western side of the city, which began with owner Duluth, Missabe and Northern Railway in the 1890s, built the town and helped it survive long after the demand for steel fell, said Eric Madson, head of the Proctor Economic Development Authority (PEDA).

But it’s no longer driving progress, he said, with the city “stagnant for decades.”

The project’s effect will be “like Proctor is being reborn,” Madson said.

The city unveiled plans at an open house in its community center this week, with developer NGP taking questions. Residents had concerns about Proctor’s ability to support all the new construction, along with questions about the city’s share of the cost.

The city’s economic development arm sold the land to NGP, a limited liability company, for $223,000, but it’s a private project, officials said. PEDA approved a development agreement with NGP last week, which lays out timeline terms.

Developer Beth Wentzlaff, also of Duluth real estate firm CMRA, said her group is spending about $14 million for the first phase, but she declined to disclose the estimated investment for the entire project. The other involved companies are paying for their own construction, she said.

Wentzlaff said an initial estimate was more than $120 million, but the amount of housing included in that number has been reduced.

Her and partner Shaun Marline’s interest in the site stems from available land and converging plans with the city for that land.

“No place has what Proctor has,” Wentzlaff said.

The city and school district swapped some land to make it happen, and NGP is paying for necessary sewer and water infrastructure, PEDA members said, noting that initial studies show public infrastructure is adequate.

A mix of apartments, single-family houses and townhomes is planned — all at market rate.

Marline, an Esko, Minn., resident and financial adviser, said he’s been researching the need for a sports dome in the area for several years and shopping for land.

Some nearby cities wanted a smaller dome, he said. The one they expect to build will be 156,000 square feet and large enough to hold two softball games at the same time. Developers say it will be the only one of its kind north of Forest Lake.

Feasibility studies show the dome and fields will have regional demand, drawing in tourists and families for youth- and college-level tournaments, PEDA member Jim Schwarzbauer said.

The project, to be built over three phases, is expected to also include a child care center, two to three restaurants, outdoor athletic fields, ice rinks, multi-use trails heading to nearby Spirit Mountain, space for camping and an orthopedic clinic.

Coined Nexus, the development is to be situated near the Aspirus St. Luke’s Sports and Event Center, which houses a hockey rink.

Wentzlaff said they have yet to hire a construction management firm.

The project brings multiple benefits to the city, including an increased property tax base and housing, Mayor Chad Ward said.

Area hospitals, Cirrus Aircraft and other larger employers “are constantly looking for housing, whether it’s apartment buildings or up to executive houses,” he said. “This is going to attract a lot of people to the community.”