A
$500 million real estate project in Duluth, Minnesota, has hit a snag. Developer Luzy Ostreicher's Incline Plaza Development LLC is facing issues with its city contract due to missing financial information and construction delays. The project, which includes 1,180 apartments, 120 condominiums, and retail space, was touted as the city's newest neighborhood after a public groundbreaking in December.

    However, city officials claim that Ostreicher's companies have breached several pieces of an agreement with the Duluth Economic Development Authority (DEDA). The City Council had granted millions in tax increment financing for the project's first phase, intended for utilities and infrastructure. If problems aren't addressed within 45 days, the city will sever its agreement with Ostreicher.

    The issues listed by DEDA Executive Director Tricia Hobbs include inaccurate funding sources, missing evidence of project financing, and default on construction contracts. The site has not been maintained, and Ostreicher's companies are in breach of their agreements. A separate Ostreicher real estate venture filed for bankruptcy last year after falsifying financial statements.

    Ostreicher's company bought the 53-acre hillside property from the Duluth school district for $8 million in 2022. The project has been marketed as a new neighborhood, with prices ranging from $650,000 to $850,000 for one- and two-bedroom apartments.