Duluth's Radisson Hotel listed for $15.8 million (2024)

DULUTH — The Radisson Hotel Duluth-Harborview was recently listed for $15.8 million by California-based commercial real estate company Marcus & Millichap.

Built in 1970, the Radisson has been an iconic structure of the city’s skyline.

Jed Carlson / Duluth Media Group

“It's a one-of-a-kind building,” said co-owner Carl Kaeding, principal of Kaeding Development. “Canal Park was just the shipyard back when this hotel was built, and so that was where you went in Duluth for many, many years.”

Located at 505 W. Superior St., the 16-story, full-service circular hotel has 196 rooms, six event spaces, an indoor heated pool, hot tub, sauna and business center.

On average, rooms are booked through the Choice Hotels revenue management system for $100-$350 a night, depending upon occupancy and demand.

The price nearly doubles for a room like the Legends Suite, where Elvis Presley rented the entire 15th floor and stayed in while performing in Duluth in 1976 and 1977. Others of noteworthy status have opted for the larger room as well.

Jed Carlson / Duluth Media Group

Jed Carlson / Duluth Media Group

“Back in 2016, we had Mike Pence here,” Radisson Hotel Duluth-Harborview General Manager Jordan Dols said. “The Secret Service has been here numerous times.”

The top floor features a rotating restaurant, Harbor 360, which provides views of Duluth’s hillside, city, harbor and Lake Superior. A five-horsepower motor runs the wheel that spins the restaurant during its hours of operation.

“It takes 72 minutes for a full rotation,” Dols said. “When it first opened, it took 60 minutes, but they had to slow it down because it was getting people seasick.”

The hotel has on-site parking and is connected to the skywalk system, which enables guests to access the Duluth Entertainment Convention Center’s Amsoil Arena without having to endure the outdoor elements.

The property received $3 million in extensive repairs and restoration work in March 2013 to fully replace the hotel’s mechanical components after a water pipe burst.

Jed Carlson / Duluth Media Group

“There was a city project going on Superior (Street), a water main break that flooded the lower two levels of the building. It took it out of service for a number of months,” Kaeding said. “I assume a rather large insurance claim ensued, and they replaced a bunch of switchgear and a bunch of equipment down in the basem*nt.”

Jed Carlson / Duluth Media Group

The property was purchased in April 2014 for $8.2 million, according to St. Louis County tax documents. The Radisson is currently owned through a tenancy in common among four partners: Duluth Associates SPE, Duluth Holdings SPE, Duluth Kaeding SPE and Empire IV Duluth.

After a decade of ownership, the group has decided to check the market for potential buyers.

“It's either time for us to start renovating again or sell it and let somebody else's mind's eye renovate it into what they think it should be,” Kaeding said.

The sellers have begun the application process for historic tax credits, which they hope will entice a new buyer thinking of future renovations.

“The state of Minnesota has a 20% credit, and the feds also have a 20% credit," Kaeding said. "So you can get a 40% tax credit, which, by the time you go through all the red tape, is a little bit more like 30%. But it's still a very reasonable credit in exchange for placing the hotel on the Historic Register.”

The hotel’s guest rooms last received a top-down renovation during 2015-16.

“Every room is a pie-shaped room, and they're tricky to design around,” Kaeding said.

Jed Carlson / Duluth Media Group

During tax season 2022 (payable in 2023), the taxes for the property increased by 83%, when a group of similar properties that compete for the same market and customers increased by 10% that year, according to Kaeding.

“That's what made us sit up in our chairs and go, ‘Well, what's going on here?’ he said.

On Feb. 28, the Radisson owners filed a property tax petition with Minnesota District Court to appeal the assessed property value for taxes payable this year, alleging the estimated market value is greater than the actual market value, the subject property is unequally assessed when compared to other property, the classification is incorrect and the subject property is exempt from taxation.

Jed Carlson / Duluth Media Group

“Any hotel sale that happens, a portion of it is the sale of personal property to the next buyer, and that portion should not be taken into account when arriving at an assessed value,” Kaeding said. The case remains open.

When the property was acquired, the ownership group inherited the rotating restaurant atop the Radisson which operated as JJ Astor.

“We left it as that for probably the first seven or eight years,” Kaeding said. “Then I worked with Brian Ingram at a couple different sites down here in the Minneapolis metro, and his organization wanted to dip their toe into the water that is Duluth and give it a try.”

Ingram is the chef and CEO of St. Paul-based Purpose Restaurants, a family of restaurants with an emphasis on charitable contributions through its nonprofit, Give Hope.

Ingram signed onto a one-year lease at the Radisson, with the option to extend, as he gave its top-floor rotating restaurant a spin as a second location for The Apostle Supper Club. The space underwent a complete renovation.

However, it turned out that the outlier Duluth site was a black sheep to the rapidly growing Purpose Restaurant family, which also included Hope Breakfast Bar, Hope Express at Gillette Children’s Specialty Healthcare, The Gnome Craft Pub and The Apostle Supper Club — all located in the Twin Cities.

When the lease ended, Ingram returned the restaurant keys and the Radisson ownership group renamed it Harbor 360, which they continue to operate today. The listing states the sellers are also open to leasing the restaurant to maintain management of the food and beverage operations.

“That was just to open up the buyer pool a little bit to those who either don't have the management capacity in their office for food and beverage or just absolutely don't like doing it,” Kaeding said.

Jed Carlson / Duluth Media Group

Having internal competition with the experience of a rotating restaurant, the hotel’s lower-level bar, Bowery Brothers, halted its regular operations before 2020. It is still booked occasionally for private wedding parties and larger groups as part of a catering package.

Following the COVID-19 pandemic, Kaeding noticed a shift in the city’s hospitality industry from visitors coming for the nightlife in Canal Park to a growing interest in the great outdoors. While alcohol sales may have declined, the hotel’s occupancy remained steady — in line with growing wellness trends.

“We do see a lot of people headed up there that were reintroduced to nature through COVID, and they've still hung on to it, which is great. Duluth has a lot of that to offer,” Kaeding said. “Drive up (Interstate) 35 on a Friday afternoon, and every 10th car is going to have a mountain bike strapped to the back of it. That didn't happen four years ago.”

According to the listing, Radisson operates in conjunction with an adjacent building with 72 units, in which the sellers plan to retain ownership and repurpose with a use outside of hospitality.

The rooms currently serve as an overflow for busy summer weekends and winter hockey tournaments, but Kaeding said this doesn’t offset the cost to operate the annexed portion of the building.

Jed Carlson / Duluth Media Group

“Hats off to the Duluth Area Hockey Association. They host a number of tournaments up there in the winter that help break up the long, long winter that is slow business time up in Duluth,” Kaeding said. “The summer is usually kicked off by Grandma's Marathon, and from that point forward, we’re pretty well full on weekends in the summer.”

The owners are considering repurposing the annex as housing for J-1 students in the summer, who make up a large portion of the hospitality sector in Duluth’s summer tourist season.

“We'll wait and see what an inbound buyer wants to do, and then from that point, we'll figure out what the future of that addition is,” Kaeding said.