Long haul for NorShor: Restoring historic theater required complex effort

When the restored NorShor Theatre officially reopens its doors to the public Thursday, it will mark the completion of an arduous journey.

That odyssey began in 2010, at a time when the once-stately downtown Duluth theater had devolved into a run-down strip club.

In a bold gamble, former Mayor Don Ness' administration struck a deal with the building's owner, Eric Ringsred, to purchase the theater and associated properties. The Duluth Economic Development Authority would pay $2.6 million for the NorShor Theatre, an annex and the adjacent Temple Opera Building.

But then what?

Rather than attempt to renovate the theater entirely on the public dime, the city enlisted the support of a partner: George Sherman, founder of Sherman Associates, a commercial developer with substantial holdings in Duluth, including the Sheraton Hotel and Greysolon Plaza, located just east of the NorShor.

Sherman recalled that with the NorShor operating as a venue for nude dancing, and the nearby head shop Last Place on Earth openly selling large quantities of synthetic marijuana, downtown Duluth was not the kind of place many people would choose to invest in at the time.

"It (the NorShor) was a lot like the Last Place on Earth. It was a cancer that was killing all the properties around it," he said, noting that the strip club created an unsavory atmosphere.

"Families didn't want to come down here," Sherman said.

Duluth Mayor Emily Larson credits her predecessor for taking on a difficult situation.

"It takes a very, very strong vision and a very committed and inspiring leader to get people to see the potential. That is the gift that Don Ness gave this community," she said.

Larson said she doubts the NorShor's renovation would have come to pass without Ness.

"This project was so complicated. ... It required so much risk and investment and partnership and co-investment and leveraging of dollars and state money. ... It was so complicated from that standpoint that without that driving vision of Don's, there would be no way to get everybody on board and excited and willing to take that step," she said.

Funding for the $31 million project came from a myriad of sources, including $7.5 million in equity and new market tax credits assembled by Sherman & Associates, $7.1 million from the state of Minnesota, $7.4 million in federal and state historic tax credits and $4.5 million to be raised by the Duluth Playhouse, with Local Initiatives Support Corp. chipping in as well.

In April 2016, after months of delays as legal details of the complex deal were ironed out, DEDA and the Duluth City Council signed off on a development agreement with Sherman Associates that was more than 250 pages thick.

Richard Kieman, Sherman Associates' vice president of construction, said the NorShor project is one of the most complicated deals he has ever assembled.

"This has been hard. I mean really hard. I don't know what else to say. But talk about commitment and stick-to-it-iveness," he said, as renovation work finally began on the theater in June 2016 - six years after DEDA's original acquisition of the the NorShor.

Larson said that pulling the development together proved a challenge right to the end.

"When I came into this office (in 2016), I took the task of getting it over the finish line seriously, and we invested an enormous amount of time to make sure that - while there was a transition of leadership in this office - the commitment to that project remained robust. We just continued to stay the course of the work that had been done to date. So getting all of that over the finish line was not particularly easy, but it was made easier by the fact that the commitment and the investment that people had made was so sincere and so deep," she said.

Under the terms of the development agreement, DEDA handed over ownership of the theater to NorShor Theatre LLC, led by Sherman's team. The authority also provided $2.2 million in tax-increment financing to support the project.

NorShor Theatre LLC will own the venue for seven years after its opening, so as to qualify for all the available tax credits, but the building's primary tenant and manager will be the Duluth Playhouse. That same nonprofit theater organization is expected to eventually assume full ownership of the NorShor and continue its operation into the foreseeable future.

Reflecting on the project, Sherman said: "We are proud that our role and ownership is bringing the NorShor Theatre back to life. We want to thank the many partners involved, particularly the Duluth Playhouse and the city of Duluth. The theater will continue to add vibrancy and energy to downtown Duluth. Our personal and company commitment to Duluth is heartfelt and will continue in the years ahead."

Larson said the theater will connect people to the past and future.

"It really binds generations together," she said, predicting that it will spur further investment in Duluth's downtown theater district.

"An investment like that into our creative economy begets more," Larson said. "It's catalytic in the sense that this community really deserves a beautiful theater - a special, historic restored experience. I think the community is going to be so proud when they see it."

Coming Thursday

Thursday's News Tribune will feature a special section highlighting the history of the NorShor Theatre, and the extensive renovation and restoration of the venue.