Local Property Owner Sues Duluth Over $9.25M in Permit Fees

URGENT UPDATE: A local property owner in Duluth has just filed a lawsuit against the city, claiming the building permit fees are not only excessive but also illegal. Joe Kovich initiated the suit on January 2, 2024, arguing that the case extends beyond his interests as the owner of a commercial property at 1105 E. Superior St..

Kovich’s complaint asserts that for years, Duluth has “grossly overcharged applicants” and unlawfully collected over $9.25 million in building permit fees from 2018 to 2024. This staggering amount is reportedly still increasing, raising alarms about the city’s financial practices.

City officials have declined to comment on ongoing litigation, with Public Information Officer Kelli Latuska stating that policy prohibits them from discussing active cases. Kovich, advised by his attorney, has also refrained from making public statements.

Under Minnesota’s building code, local municipalities are permitted to set and collect building permit fees, including charges for inspections and other necessary services. However, the code mandates that these fees must be “fair, reasonable, and proportionate to the actual cost” of the services provided. Kovich’s lawsuit claims Duluth’s fees far exceed these requirements, with revenues being funneled into the city’s general fund rather than covering service costs.

In a bid to undertake some construction on his property, Kovich faced a hefty fee of $1,292.71 for necessary permits, which he deemed unacceptable. His legal action not only seeks redress for himself but also for “all others similarly situated,” potentially marking a significant moment for property owners across the region.

This lawsuit could gain momentum as it appears to align with other similar cases currently in motion, including Patrick Bollom v. St. Paul and Berney Salzer v. Minneapolis. On December 23, 2025, Minnesota Supreme Court Chief Justice Natalie Hudson agreed to consider consolidating these cases, suggesting that coordinated judicial management may be necessary for addressing pretrial matters.

While there are no guarantees that these cases will remain consolidated, the potential for additional litigants joining the fray is high, as attorneys for the plaintiffs express expectations for similar actions against various Minnesota cities.

This developing situation highlights the urgency for residents and property owners to stay informed about potential changes in local government practices regarding building fees. As Kovich’s challenge unfolds, it raises critical questions about the financial responsibilities of municipalities and the rights of property owners across Minnesota.

Stay tuned for more updates as this story develops, impacting both local taxpayers and property owners alike.