Major development slated for Marjo site

TOWER— Luke Kujawa couldn’t resist the potential. The Twin Cities businessman, along with his business partner Michael Jellish, closed just last week on the 18-acre parcel of mostly upland property lodged strategically between Tower’s harbor and Your Boat Club, which Kujawa and Jellish co-own.
The site, previously owned by Tom and Joe Mesojedec, includes the Marjo Motel and the former Mesojedec home located next door. Both existing structures are expected to remain, although they are likely to be renovated.
The site has long been eyed for possible development and last week’s sale lays the foundation for a plan that is expected to bring dozens of new residences and a small hotel to the site, along with the possibility of a new home manufacturing plant.
“It’s such a fantastic piece of property,” said Kujawa. “There’s probably no other place in the state where so many trails come together in one place.”
Kujawa isn’t exaggerating. The property sits next to the junction of the Mesabi bike trail, the Prospector ATV trail, the Taconite and Arrowhead snowmobile trails as well as the channel that provides direct boat access in summer and snowmobile access in winter to Lake Vermilion. Popular hiking and cross-country ski trails lie within just half a mile.
“There’s so much opportunity that wasn’t happening, it just didn’t seem fair not to move this forward,” Kujawa added.
Kujawa and Jellish have formed a new LLC, Marjo RE, to oversee the project, and Kujawa said he hopes to move forward with the project with deliberation. “Once we finalize the best concept, we’ll set a steady plan to get it done.”
While plans for the site are still under development, initial concept drawings show a primary access off of Marina Drive, which will lead to the hotel along with several tiers of homes that will follow the elevation contours of the property, which slopes gradually toward the East Two River. The site includes more than 1,100 feet of river frontage and the plan envisions a series of cabins aligned along the river. A paved path would connect the site to both the harbor and Your Boat Club.
“The final plan is obviously a ways away, but I like the current concept,” said Kujawa. The synergy between the boat club and the development is obvious, since the site is likely to include a number of short-term rental units or hotel rooms that will be available for use by members of the boat club. “It will certainly add more traffic to the marina,” said Kujawa. With the marina renting both boats and ATVs, “the marina will really become a hub of that activity,” he added.
Orlyn Kringstad, of Tower, who helped arrange the sale, has signed a consulting agreement with Kujawa and Jellish to assist in managing development of the site. Kringstad is also expected to continue to lease and operate the Marjo Motel.
“This goes back to the original Tower Vision 2025 plan, which was to do the harbor first and then hop over and do harbor north,” said Kringstad. “It may be five years later than we had hoped, but I’m pleased to see it finally moving forward.”
TEDA role likely
The Tower Economic Development Authority may also play a role in shaping the development. A five-acre parcel that TEDA purchased from St. Louis County in 2020 provides a convenient access point and additional developable property for the Marjo group and Kringstad has already submitted a letter on the group’s behalf asking to purchase the 5.02-acre TEDA site. The letter describes “an affordable home development, senior living housing, riverside cottages, and a 16-unit Marjo Hotel.”
Any potential sale of the TEDA property would likely be subject to a development agreement which would give TEDA input into the design and the timing of construction. Kringstad’s letter confirms that the group is interested in meeting with TEDA soon to present their development concepts as part of reaching an agreement for acquisition of the acreage.
The development, once completed, would likely bring well over $10 million in tax base to the city of Tower.
TEDA officials and Kringstad have already met with officials from the Department of Iron Range Resources and Rehabilitation to discuss a water and sewer extension to the site.
Local plant a wild card
Kringstad said the years of delay in the development at the harbor may ultimately yield an unexpected benefit— the importation of a Norwegian-based small home and cabin manufacturer to the area in another potential deal being brokered by Kringstad and his Norwegian business partner Lars Hanstad.
The Norwegian company, Tinde Hytter, manufactures several models of high-quality homes and cabins, ranging from 500-1,200 square feet. With a Scandinavian design and super-insulated for energy efficiency, the company has proven successful for decades in Norway— so successful, in fact, that it may be close to saturating the market there.
That has given the company a strong interest in exploring other markets, including gaining a foothold in the U.S. Kringstad and Hanstad met with the company’s CEO in Norway last November and the connection appears close to yielding a deal, first to import some units to the U.S. to test the market interest, followed by the possible opening of a Tinde Hytter plant as soon as next year. Company management has expressed strong interest in the idea and pledged a financial commitment to equip a new facility here.
The plan still faces challenges, not the least of which is finding or building a facility large enough to house the operation, which would likely employ 15-20 people, not including local contractors.
Given the region-wide housing shortage, the possibility of bringing a manufacturer of well-designed and energy efficient homes to the area has piqued the interest of development officials as far away as Duluth as well as area trade unions, which are excited at the possibility that the location of a plant in the region could help jump start new home construction in the region. Given that possibility, a second Tinde Hytter plant, most likely located in Duluth, is already under consideration.
While the price tag for the Tinde-Hytter homes isn’t known at this point, Kringstad is hopeful that the relatively small square footage of the units will keep the price affordable.