As many parents struggle to find childcare in the area, one recent closure has some placing blame on the owners. Several parents reached out to WDIO in September upon finding out that Building Blocks Learning Center was being evicted for being behind on rent payments. The business was renting the lower level of Duluth Vineyard Church.

On September 20th, Building Blocks Learning Center closed with plans on eventually finding a new space. Like other childcare centers, the owners say the finances and the lack of funding in the field are to blame for the closure.

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“We were struggling financially on how, you know, what do we do? Do we pay rent? What do we pay our staff so that we can continue to give care, that quality care that we did?,” said owner Lucas Petrich.

Court documents show that this is the second time Building Blocks Learning Center has been evicted from a building for not paying rent.

Previous Lease Termination

Lucas Petrich and Building Blocks Learning Center LLC rented a commercial property on Haines Road in Duluth from BellaGrace Properties LLC starting on July 1, 2019. According to court documents, the lease was for five years with rent of $9,000 a month. The court claim alleges that Building Blocks fell behind in rent payments and entered into a rent modification agreement in April of 2020. Rent was going to be modified for March through December of 2020, but, according to court documents, Building Blocks again fell behind in payments.

In January of 2021, Building Blocks entered into Lease Modification and Forbearance Agreement with BellaGrace Properties. Court documents state, “Building Blocks confessed to judgment in favor of BellaGrace in the amount of $57,580.00 in a Confession of Judgment attached to the agreement.

The agreement provided that BellaGrace “could file the Confession of Judgment with the St. Louis County Court in the event of a default.” The court documents continue, saying that Building Blocks agreed to “pay and reimburse BellaGrace for all of its attorneys’ fees and expenses incurred in connection with a default.”

According to court documents, Building Blocks failed to pay the money owed to Bella Grace, and their lease was terminated. Building Blocks vacated the property by September 10, 2023 but are accused in the court documents of leaving it with “with damage beyond commercially reasonable wear and tear.” There are also allegations in the court documents of damage to door frames, sheetrock, and landscaping. The total amount owed, with damages included, is stated as $70,058.90.

Petrich disagrees with the claims, claiming that the eviction was done so that another renter could expand within the building. He also disputes the amount owed.
“He [the building owner] is trying to- his argument is that we didn’t leave it broom ready, which we did. He’s actually remodeled the space,” said Petrich. “And he’s trying to put some of that bill on me, even though he’s taken down walls, redid the carpet and repainted for the vet center. But he’s trying to pin that on me. And then some of the ground was ripped up when he fixed the foundation, and he’s trying to pin that on me too.”

Recent eviction

On July 19, 2023, Building Blocks Learning Center entered into a new lease agreement with Vineyard Christian Fellowship in Duluth. The agreement was for Building Blocks to rent the lower-level space from September 1, 2023 to August 31, 2024 for $4,500 a month.

Court documents show that on May 20, 2024, the office manager of Vineyard wrote a letter to Luke [Lucas] and Holly Petrich that provided Building Blocks with a notice of non-renewal of the lease agreement. The letter stated, “You have not made any payments toward your April or May rent and you currently owe $12,018.94.” and gave Building Blocks 90 days to move from the premises.

Vineyard offered a payment plan, saying, “If you are able to get caught up on your payments before September 1, 2024 we would consider the possibility of establishing a new lease with you but, first we need to see commitment from you to make your payments as agreed to in the lease.”

“We were told in May, if we couldn’t correct it, we would have to look somewhere else or come up with a plan to leave. Then we met in June, same conversation, and this is our plan to get going. July and August, same conversations with the church to try to make things right,” said Petrich. “Then when I finally got enough to satisfy what everybody was looking for to stay, it was two weeks after their deadline, when that money was finally caught up from everything. And at that point, they just can’t do it anymore.”

On September 4, Vineyard filed an Eviction Action Complaint in District Court and put up signs to provide families with information on the impending closure.

Dear families and staff of Building Blocks,

Building Blocks Learning Center, Inc (BBLC) was leasing the lower level of our church to provide daycare for area families. Our heart was to help fulfill a very real need within our community for childcare. In May, BBLC was in default of their lease agreement and was delivered a notice of non-renewal effective August 31, 2024. We have worked with BBLC to find a solution and allow them to remain operational in our space, but unfortunately a resolution could not be reached. We have been asking BBLC to make necessary arrangements and notify families and staff of their plans. It is our understanding that this has not happened. We have authorized the filing of an eviction complaint with the court and felt that we needed to alert
families and staff of the situation. This situation is heart wrenching and not what we had envisioned. We are truly sorry. If you have any questions that the church may be able to answer please call 218-525-3462.

Respectfully,
The Duluth Vineyard Church

Lucas and Holly Petrich sent a letter to parents on Sunday, September 8 to notify them that September 20 would be the last day for their childcare services until a new facility is found.

“We were trying to figure out what we were doing, because we were trying to extend our deadline here with our attorney,” said Petrich. “We were also trying to figure out where we could possibly move to in the shortest amount of time.”

Several parents contacted WDIO about this announcement, upset to have not been told sooner. Most parents refused to speak on record out of concern that doing so would make it more difficult to find another childcare spot for their child.

One parent spoke anonymously with a variety of concerns expressed, including the lack of transparency.

“Luckily, we had already heard some rumors of other financial situations going on. Some of us had already started seeking other child care facilities. But it was just horrible thinking that in the meantime, Building Blocks was filling our spots,” said the parent. “Other parents had to kind of transfer on the fly or figure out something to do because they gave us the notice less than two weeks in advance. So to try to find child care in less than two weeks is almost impossible.”

The anonymous parent had been with Building Blocks since they were at the previous facility and questions how there were two evictions, both due to late rent.

“I guess for me, knowing as a parent that I’m paying almost $1,000 a month, roughly, in child care fees, and also seeing, because, again, I’ve done some research, that I think their highest-paid teachers are getting paid $17 an hour, roughly. It just makes you wonder, when you start crunching the numbers, this much per child per classroom, this many teachers per classroom, unless those teachers are making over $20 an hour, there’s no way that the money’s, where did the money go?,” said the parent.

Vineyard declined the request for comment.

Future plans

Lucas and Holly Petrich plan on finding another space for Building Blocks to rent, emphasizing the need for childcare in the Duluth area.

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“We are going to have our license is going to change from open to pending reopen which means that we will have time to look for a new facility if we wish to continue to do this. I just had a conversation this morning with a developer who’s redeveloping an old building and has a sprinkler system and we could have space on a main level to grade. So it’s going to be a clean slate so we can come in and potentially redesign or design it in a way that is going to be financially feasible for everybody,” said Petrich. “This is a big lesson. This is a major hurdle that we’ve had to overcome you know but who doesn’t love a good comeback story right?”

Petrich also emphasized the need for childcare funding at a state level, encouraging others to vote accordingly.

“Look at who you’re voting for this fall, look at that because they are the ones who make these decisions on what can be paid for and what isn’t. Get on your local legislation, get on them hard that this needs to be subsidized,” said Petrich.

After a phone interview, Petrich emailed the following statement:

“Two weeks ago we announced the devastating news that we were going to have to close Building Blocks Learning Center. Unfortunately, we are drained, emotionally, mentally, and financially. This decision is heartbreaking for us, our families, and most importantly for the children we have loved and cared about for the last ten years. Yes, our lease wasn’t renewed, but this is due to the fact that we had to choose between paying our hard working, dedicated, and loyal teachers or paying our rent, an impossible decision. A disruption in funding created an impossible decision, one that we shouldn’t have to make but we were forced to because the business model of childcare doesn’t work. We were left with no choice, no financial stability, and deep heartache. The only way to stop childcares from closing around the state is a publicly funded multi-delivery system that can support the providers, like us, that so deeply care about the families and children we cared for and the teachers that worked alongside us. We wanted to provide affordable care, but we couldn’t afford it.

After working with our licensor from MNDHS Building Blocks’ license is set on a pending reopen status. This means when we find the right space we can begin the process to reopen and retain our status with the state, retain our 4 star Parent Aware Rating, the highest the state awards, and continue to care for the children in our community.

BBLC has also begun initial conversations with a developer to rehab a new space that could be designed specifically for the needs of the center which would maximize the space in order to be fully staffed and fully enrolled in order to meet the financial obligations associated with operating a childcare center.”