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IRRRB approves funding for Tower projects

Includes new home for Lamppa Manufacturing, support for Lake Vermilion Cultural Center

Marshall Helmberger
Posted 5/23/18

TOWER— The Iron Range Resources and Rehabilitation Board approved funding to build a new home for Lamppa Manufacturing and to continue to advance work on the Lake Vermilion Cultural Center here. …

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IRRRB approves funding for Tower projects

Includes new home for Lamppa Manufacturing, support for Lake Vermilion Cultural Center

Posted

TOWER— The Iron Range Resources and Rehabilitation Board approved funding to build a new home for Lamppa Manufacturing and to continue to advance work on the Lake Vermilion Cultural Center here. Funding for the projects will be directed through the city’s Economic Development Authority, or TEDA.

The IRRR board gave approval to the funding contingent on a resolution of acceptance from TEDA for the cultural center and the completion of a Lamppa business plan that’s consistent with the IRRRB’s format requirements. The board acted on the requests and other business during their quarterly meeting held Monday in St. Paul.

Funding for the Lamppa project was approved in two pieces, the largest in the form of a $1.85 million non-recourse loan to build a 9,000 square-foot commercial building in the city’s industrial park, on the west side of Hwy. 135. The loan should be sufficient to cover the construction costs and related engineering. Lenci Enterprises, of Virginia, provided the low construction bid of $1.591 million.

Lamppa Manufacturing, which manufactures top-of-the-line wood furnaces and sauna stoves, will initially occupy 4,500 square feet, leaving the remainder available for another business or for future expansion by Lamppa. The company is the only stove manufacturer in the world that currently meets strict federal emissions standards that take effect in 2020, which means the business is poised to show significant growth in market share. The company has been manufacturing its stoves from a tiny former creamery in Tower for decades, and the new facility is expected to allow the company to significantly ramp up its production capacity. The company expects to increase its workforce from eight employees to twenty by next year.

The IRRRB approved a separate reallocation of $350,000 in grant funding previously approved for the city of Tower’s harbor project infrastructure to fund infrastructure costs associated with the Lamppa project. The city had sought an extension of the grant, given delays in advancing the harbor project, but the IRRRB had wanted funding assurances for the project before granting an extension. With the private project funding still in process, the city opted to redirect the funds to the Lamppa project. IRRRB spokesperson Sheryl Kochevar said the agency anticipates the city will make a new funding request for the harbor when the project is ready to move forward, which is expected to happen later this year.

The reallocation of funds caught the harbor developers by surprise. Developers Orlyn Kringstad and Jeremy Schoenfelder had not been informed by city officials of the plan to reallocate the harbor dollars. The city recently provided an updated development agreement to the developers indicating that it had obtained grant dollars to fund at least a portion of the infrastructure work the city had agreed to undertake for the effort. In fact, the city does not have that funding in place at present. City officials did not respond to questions on the issue.

Lake Vermilion Cultural Center

Meanwhile, the IRRRB approved a separate $268,000 grant to TEDA to help fund ongoing work on the Lake Vermilion Cultural Center building. The center will be housed in the former St. Mary’s Episcopal Church, which was moved to the city’s Main Street in 2015. The building has experienced some structural problems and it has taken time to address them. Center organizers are now hopeful that the grant, which they plan to match dollar-for-dollar from private contributions, will enable completion of the center building in the near future.

The cultural center applied for $300,000, and the agency was able to provide the bulk of the request.

The money is being directed through TEDA because the agency is authorized to provide funding to a nonprofit organization, which is something that neither the IRRRB nor the city of Tower are authorized to do. TEDA officials were unaware of the funding request and will have to approve a resolution accepting the funds at their June meeting in order receive the money.