DULUTH — With its first three vacation homes now standing in the background and much more ambitious plans placed squarely on the drawing board, investors in the Spirit Valley Land Co. paid tribute to Eric Shaffer, former chief engineer of Duluth’s water and gas operations, as they unveiled a new city street named in his honor Tuesday.

“The RiverWest development has been many years in the making, and Eric Shaffer was a big part in making that vision a reality,” said Jim Benning, Duluth’s director of public works and utilities. “Until recently, this was woods, as you see behind you, and now it’s transforming into this wonderful addition to this west Duluth neighborhood, with residential housing, retail stores coming in the future, and a kickoff point for adventures on the river, trails and at Spirit Mountain.”

“What you can’t see is the utilities, and utilities are the lifeblood for this development,” Benning said. “It’s easy to forget that each structure needs water for drinking, sanitation and fire suppression; sanitary sewer to carry the waste away; natural gas to heat the building; and storm sewers to convey and treat the stormwater runoff into the river.”

“Eric and his team were instrumental in getting these utilities designed and constructed on this very challenging site,” Benning said. “But most of you who knew Eric were well aware that he was the right person to do this. He was a doer. He could be relied on to get the job done. I don’t recall ever hearing him say, ‘It can’t be done’ or ‘It’s too difficult.’”

In unveiling Eric Shaffer Way, developer Brad Johnson described the street as a testament to its namesake’s can-do attitude.

Shaffer died in February

following a snowmobile accident.

Johnson said the development will bring $100 million of investment to the area by the time it is completed, with a 100- to 120-unit apartment building, a hotel, retail businesses and a restaurant as part of the mix.

Scott Neustel, a partner in the land company and owner of Ski Hut, noted that Outside magazine previously recognized Duluth as the No. 1 outdoor city in the nation.

“And this place, RiverWest, delivers the No. 1 outdoor experience not only in the city, but in the country and in the world. I truly believe that. And why do I believe that? It’s because RiverWest provides direct access to no less than 12 world-class trails, right from this place right here,” Neustel said.

He pointed to the biking, hiking, skiing and paddle-sport opportunities that abound in the area.

Besides investing in housing for the 26.8-acre development, Neustel said he also aims to break ground this summer on a new Ski Hut store at the corner of Riverwest Drive and Grand Avenue. The new “adventure center” is expected to cost more than $3 million and will offer an array of outdoor gear for sale and rent.

“It’s going to be something that will provide the supplies and the rentals for outdoor enthusiasts who are coming to Duluth to enjoy our trails,” he said.

“My store and the other businesses that follow will be a perfect complement to both Spirit Mountain and these beautiful homes that you see here: the RiverWest Vacation Homes,” Neustel said.

Three of those four-bedroom vacation homes are already up and operating, with the owners routinely renting the properties to visitors for around $600 per night when they’re not staying there themselves, Johnson said.

He said the homes were sold for around $750,000 apiece before they were even built. Three more are slated to go up this summer. Phases 2 and 3 of the development are poised to bring another 35 or so vacation homes to RiverWest over the next two years.

“I’ve been investing in real estate here in Duluth now for a little over 30 years, and this is by far the most exciting project I’ve been involved in,” rental investor Daniel Legg said.

While the adage about real estate values being driven by “location, location, location” still holds, Legg said he would add “license” to that list, as an investor.

“I’ve been trying to expand my portfolio of real estate here in the Duluth area for the last few years, and it’s been a painful process with the limited supply that’s out there. And as we all know, vacation rental licenses in Duluth are very hard to come by,” he said.

“So, that’s the big thing here. Yes, we have the location, and I’m excited about it that we’re in this fun playland. That gives me pleasure. But we also have the license to do business,” Legg said.

The RiverWest Vacation Homes will be licensed as a hotel operation, and as such will not be subject to the city’s cap on vacation-rental properties, explained Adam Fulton, deputy director of Duluth’s planning and economic development division.

“The demand is here in Duluth for vacation rentals. We know that. We know that the supply is not changing much. So, it’s not rocket science, folks. It’s supply and demand. And right here, I think we’ve got something that’s really really special,” Legg said.

Peter Passi covers city government for the Duluth News Tribune. He joined the paper in April 2000, initially as a business reporter but has worked a number of beats through the years.