TOWER— One of the potentially most impactful residential developments in decades in Tower has finally broken ground, marking the first significant private investment associated with the city’s harbor and riverfront project.
An initial access road is now in place next to the Marjo Motel and the sites are prepared for the first three units in a project that could eventually include as many as 50 residential units, some for sale with others planned for short-term rentals. The investment is being undertaken by business partners Luke Kujawa and Michael Jellish, operating as Marjo RE, LLC. The two are also partners in Your Boat Club, which maintains dozens of marinas across the U.S., including the former Standing Bear Marina, located adjacent to the Marjo RE property.
Project manager Orlyn Kringstad said he expects the first three units to arrive at the port of Duluth on July 15, with three more units to be ordered and on their way during the current construction season.
The residential units will range from small cabins to larger two and three-bedroom homes and will be spread across a 23-acre parcel, including a five-acre piece the partners recently bought from the Tower Economic Development Authority. They purchased the 18-acre parcel that includes the Marjo Motel last year.
The residential units are on order from Tinde-Hytter, a Norwegian firm that manufactures smaller homes primarily for the seasonal recreational market in Norway. The units coming to Tower represent the company’s first entry into the U.S. market. They’re an initial test to determine the market viability of opening a new manufacturing plant in Minnesota, most likely in Tower.
The project has been on a fast track, as city officials have tried to smooth the way for a project that could add several million dollars to the city’s tax base. Per the city’s zoning ordinances, the owners of a property subject to a conditional use permit, or CUP, are allowed to expand their operation by up to six units without revising their CUP or conducting environmental review.
The city itself used that same interpretation of the ordinance back in 2018, when it added six RV lots at Hoodoo Point Campground, without environmental review or an updated CUP.
It’s not clear whether the Marjo Motel, which was built in 1957, ever had a CUP, since the facility pre-dated most of the city’s current zoning ordinance. City officials have been unable to locate any record of permitting for the Marjo Motel. Nonetheless, city officials are interpreting the ordinance to allow for some expansion of a commercial development without having to engage in a lengthy permitting process, that could involve environmental review and public hearings.
Tower Clerk-Treasurer Michael Schultz acknowledges that the permitting process for the project is unclear given inconsistencies between Ordinance 82, the city’s primary zoning ordinance, and Ordinance 80, which governs shoreland areas. City officials note that the two ordinances appear to be in conflict, and that’s made even more complicated by the fact that only a portion of the Marjo RE project is within the shoreland zone covered by Ordinance 80.
City officials have tried to merge the two ordinances in the recent past but the effort lost momentum as the scale of the necessary revisions became clear.
Schultz acknowledges it’s a “gray area,” but that city officials have determined they don’t have a good case to block the development from proceeding, even if they wanted to. “Do we really have the grounds to say no?” asked Schultz. “At the same time, we want development. We want homes. We’re not interested in shutting everyone down.”
Under the city’s current zoning for the Harbor North district, it appears that the Marjo Motel could be built today with a standard building permit, without requiring a CUP. And the council recently revised that ordinance to allow for the construction of single-family homes within the harbor district.
According to Schultz, the city has issued building permits for the first three units and has indicated the developers can add three more ahead of platting of the site.
The city is allowing the project to take initial steps even as work is underway for the necessary platting. While such development typically waits until final platting is complete, city officials have indicated the developers can move forward with the initial six units, at their own risk. While the pending plat will presumably take the location of the new units into account, there is always some risk that one or more of them may need to be relocated.
The initial units, however, are being placed consistent with the project design developed by Duluth-based architect Ryan Arola so a final plat consistent with that plan should not require any relocation of units.
The development is fully consistent with the city’s longstanding vision of the harbor as a walkable community that will provide direct access to Lake Vermilion as well as a walkable mixed commercial and residential neighborhood. The Marjo RE site is already connected to the harbor via a walking trail and will eventually be connected by an extension of that trail to Your Boat Club, which will provide dockage and boat rental for residents or short-term clients staying at the Marjo RE development.