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Serving Northern St. Louis County, Minnesota

Major Ely projects jump-started with IRRR development funds

Keith Vandervort
Posted 5/5/21

ELY – The city of Ely received approval late last week for three community and development infrastructure grants from the Minnesota Department of Iron Range Resources and Rehabilitation …

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Major Ely projects jump-started with IRRR development funds


ELY – The city of Ely received approval late last week for three community and development infrastructure grants from the Minnesota Department of Iron Range Resources and Rehabilitation (IRRR).
Two development infrastructure grants include an expansion project at the Boathouse Brewpub and Restaurant and renovation of the former Shopko building by Zup’s Market, and the third grant is a match for funds dedicated to the first phase of the Prospector Loop ATV Trail. In all more than $650,000 will be coming to Ely this year from IRRR.
The Ely Boathouse Brewpub and Restaurant, one of the few eating establishments in the city to not only survive but thrive during the coronavirus pandemic restraints, is completing a $550,000 expansion project that will more than double their seating capacity on the second floor. The expansion requires the installation of a sprinkler system in the landmark building that was built in 1905.
A $73,449 grant to the city of Ely will help fund a water main replacement in the area of the downtown establishment necessary for the installation of a sprinkler system. The Boathouse is providing $476, 551 for the project. Costs associated with the project include expanding the bar and restaurant to the second level, engineering fees and a construction contingency fund.
Longtime Boathouse chef and Ely native Brian Tome “took a leap of faith” in early 2020 when he accepted an offer from Boathouse owner Mark Bruzek, of Duluth, to join in the ownership of the popular eatery.
Then COVID-19 hit.
“I had many sleepless nights wondering what I was getting myself into,” Tome said. “COVID closed us down so we took sledge hammers and went upstairs and started demolition.”
At first Tome and Burzek toyed with the idea of renovating the apartments that were on the second floor. They decided to go for a full-blown expansion project that will include expanded seating, a second, larger bar, private conference room, new restrooms, and an open floor plan with six-foot windows, exposed ceiling beams and refurbished original wood floor.
According to the grant application to IRRR, the Boathouse expansion is expected to create five permanent year-round jobs and three construction jobs for the project. “We have had contractors here on the job every day since November,” Tome said, who hopes to have the upstairs open for business by mid-summer.
“And we won’t be done with that. We purchased the former chiropractor building next door, and are making plans to relocate the kitchen and open a retail shop there so we can then expand our beer brewery in the back of the building,” he said. “We’ve been kind of under the radar, but we have been making progress. We have 21 employees now and we will likely be looking for as many as 10 more team members as we keep growing.”
Zup’s Brothers Inc. is consolidating their current store and the newly-acquired Northland Market into a new location at the former Shopko building. They plan to open the new facility this fall.
The project consists of infrastructure and site work for the redevelopment of the former retail facility. The total project cost is listed at more than $7 million, including $2,720,000 for land acquisition, $1,954,479 for facility reconstruction, $200,517 for addition construction, $1,631,000 for equipment, $128,000 for demolition, and $71,000 in engineering costs.
The city of Ely is working with Zup’s on the reconstruction and addition of a new 34,470 square-foot grocery and liquor store with a full pharmacy and meat processing center.
The city will receive $277,270 to help pay for infrastructure and site work, with $128,900 from the agency’s demolition fund and an additional $110,625 coming from the Highway 1 Corridor account.
The development project, according to the IRRR, will provide significant tax base increase for Ely and essential services to the region. The project is expected to create 49 permanent and 44 construction jobs.
In discussing the grant for the Zup’s project, State Sen. David Tomassoni said, “This seems like a pretty good package. These projects have a lot to do with jobs in the area and there is really good stuff going on here.”
State Sen. Tom Bakk questioned the number of new jobs expected to be created at the new Zup’s Market.
“It says here that they are expected to create 49 permanent jobs. I can’t imagine that’s possible by adding the meat processing on. Are we counting the jobs that (they) are moving from down the street to the Shopko building? I’m not sure we have the wordage quite right.”
Chris Ismil, IRRR development staff member, insisted that 49 new jobs will be added. “These are vetted. We meet with the companies and they provide what type of positions. In fact, they came back with a high number and we brought that number down a bit. This is based on the fact they are going to provide pharmacy jobs, liquor store jobs and meat processing jobs. They have 41 additional jobs and they will be expanding with an additional 49 jobs. Those are new jobs. They are permanent. Some are part time and some are union-type jobs,” he said.
IRRR Commissioner Mark Phillips added that Zup’s is adding “dry goods” to their expanded store. “You know, like Shopko used to provide, like a dollar store or something, where you could buy more than just groceries. They will be adding a different mix of merchandise as well,” he said.
The Ely Zup’s expansion project is also expected to provide more than 40 construction jobs.
The city of Ely will also dip into the IRRR’s Regional Trail Grant fund to match the $300,000 in remaining funds available for Phase 1 construction on the Prospector Loop ATV Trail. The Regional Trails grant program provides funding to assist with design, engineering and construction of various types of trails. Five regionals trails will see assistance totaling $1,918, 600.
The city of Ely funding will allow for the completion of an important connection between the Vermilion Lake State Park and the main Prospector Trail running between Tower and Babbitt. All permits are in place, a bridge has been acquired, and the trail needs to be completed and the bridge set.
The current balance of funds is not adequate to finish this segment, and the IRRR trail grant match is necessary to complete the project before the ATV Dedicated Account funds expire on June 30, 2021.
IRRR grants assist communities with projects that support residential and public facility development and support economic development. In all, 13 grants, representing an investment of more than $2.3 million from the IRRR will be added to a total private/public investment leverage of $29.4 million for northeast Minnesota.


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