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Tower’s harbor

City should resist calls to throw in the towel on economic development

Posted 8/5/20

Ten years ago, there was broad public consensus in Tower on the future of the city’s harbor zone. As we reported two weeks ago, that original vision for the harbor was the culmination of …

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Tower’s harbor

City should resist calls to throw in the towel on economic development

Posted

Ten years ago, there was broad public consensus in Tower on the future of the city’s harbor zone. As we reported two weeks ago, that original vision for the harbor was the culmination of considerable community input, both from a broad-based harbor committee, as well as from the general public, which was able to weigh in during open house events that the city held to take input on the direction of the plan.
Most residents indicated they wanted to see a mixed development, with both traffic-generating retail businesses as well as housing. They also wanted to see a clear connection between the harbor and the city’s downtown, located three blocks away. Those elements should continue to be part of whatever plan ultimately comes to fruition at the harbor.
There have been some in the community who have pushed what is essentially a “do-nothing” approach to the harbor. They complain that the city has already invested a lot on the harbor (which is true) and that city officials should simply abandon hopes for development there in favor of minor amenities, like a pavilion and picnic tables.
While there certainly may be the possibility for some green space at the harbor, to throw in the towel at the exact point that development is actually in a position to happen, is reckless and self-defeating for the community. The lack of progress at the harbor over the past decade-plus, isn’t due to lack of interest from developers— it’s the result of a project that was clearly not ready for prime time. When the city first issued an RFP, before the dredging of the harbor, developers said they needed to see an actual harbor, not the promise of one. Other developers requested market studies, both for a hotel and a mixed commercial-residential development before moving ahead. Those studies are still of interest to prospective developers.
The city spent hundreds of thousands of dollars on engineering and soil testing at the site. And most importantly, the city spent three years developing a plat and addressing a laundry list of restrictions and other deed limitations that had muddied the land title in much of the harbor zone. Developers couldn’t have advanced a project until these pieces were in place, no matter how much they might have wanted to do so.
And now that the city, finally, has the key in the ignition, we should throw in the towel and put up a pavilion? Such suggestions ignore the fact that other funding agencies, including the Department of Iron Range Resources and Rehabilitation, have made significant investment in the harbor as well— on the city’s promise that it would vigorously pursue economic development there. Tower would be hard pressed to ask for future funds from the IRRR, or other funding agencies, if it backed out of those promises now. What’s more, the city of Tower needs to show that it can be a trustworthy partner in economic development, both with public funders and private investors, if it has any hope of a sustainable future.
There’s no doubt that the money the city has spent on the harbor over the past several years has contributed to its financial constraints. The way to address that concern is to move forward with a worthwhile development that allows the city to recoup its investment in added tax base, new housing, new employment, and an improved business climate.
The city clearly made false starts and took some wrong turns along the way. Much of that can be chalked up to inexperience and a lack of vision by some prior city officials. The three-person harbor committee that drove the project from 2014 until it disbanded in 2018 failed to follow through on the community’s original vision. They made a wrong turn with a prospective hotel development, then turned around and pushed for high-end town homes with no associated retail. It never really fit the needs of Tower— a fact that even the developers who ultimately agreed to advance the project acknowledged.
While we still don’t know the future for the harbor, one thing is clear. Any future development needs to be tied to the real needs of the community. That includes additional retail and/or dining that brings people to town and offers connection to downtown. Housing that at least some residents in town might be able to afford. And an attractive, pedestrian-friendly setting that gets people to stop as they drive through on their way to Ely. These are things that drove interest in the harbor so many years ago— and they can restore interest and community support if those same principles are followed today.

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Lee Peterson

Below I have copied the headline article from the April 5, 2017 Timberjay front page, which also included quite a drawing of the "harbor" and the townhouses. My point is to try to keep the record straight and to not let revisionist history creep in. The article starts out claiming "With the funding nearly all in place, and close to a third of planned town homes either sold or nearly so, the first major development around the city's harbor appears set to begin actual construction later this year." That was in 2017. Please, how many of those town homes are sold? Who is holding that money? Was it true, in the first place? Everyone involved, including the granting agencies, need to set aside the nonstop illusions and face reality. $6.5 million in public money has tidied up a pond area, built a nice walkway around it and bought a few docks. Things sure sounded different in the 2017 headline below.

Down to the details

Tower Harbor town home project close to launch

Posted Wednesday, April 5, 2017 5:11 pm

Marshall Helmberger

TOWER— It’s down to the details with the town home project at the city’s harbor. With the funding nearly all in place, and close to a third of planned town homes either sold or nearly so, the first major development around the city’s harbor appears set to begin actual construction later this year. And the city and the developers were focused on the fine details of the project during a meeting at city hall this week.

Details like the cost and management of boat slips, who would cut the grass and maintain the vegetation, and who would issue the actual building permits. They are the kind of questions that highlight the progress over the past year as Orlyn Kringstad and his Tower Vision 2025 organization move quietly to the launch pad on their multi-million dollar project. Kringstad said his team is now on track to have foundations built and initial structures in place by late fall and early winter, which will allow his construction team to finish much of the interior work over the winter months. The first new town homes should be ready for buyers to move in as early as mid-2018, with the rest expected to follow shortly.

And Kringstad hopes to begin work shortly thereafter on the next phase, which includes a restaurant and as many as ten upstairs apartments located near the East Two River rapids. A small retail complex at the opposite end of the harbor would also be built as soon as prospective tenants are identified.

It’s been a long time coming. City officials and the late Rep. Jim Oberstar held a groundbreaking for the harbor project back in 2007, just before the financial collapse brought most real estate investment to a halt for several years. But times have changed and after more than a year of work, Kringstad’s team now has the pieces in place.

It turns out that Kringstad’s Norwegian connections paid dividends for the project. One of his partners, Lars Hanstad, of Lillehammer, Norway, not only invested in the project, he brought another Norwegian friend into the project as well and the two of them comprise a significant percentage of the private investment in the project. Hanstad, the current CEO of Glamitec, also brought substantial business expertise to the venture.

The Iron Range Resources and Rehabilitation Board is also bringing considerable funding to the table, providing the city with $350,000 for roads and other related site prep for the project. The agency is also providing a $125,000 grant to the Tower Economic Development Authority, which is earmarked for a small funding gap loan to the project.

The Department of Employment and Economic Development is also expected to provide about $220,000 towards the project, although that award is not yet certain. The city expects that all project-related roadwork, utility extension, and site prep will cost $570,000. While DEED has not yet committed to its share, the agency has given favorable indications in the past. DEED did take back $400,000 in harbor-related funding in 2013, for expected harbor development that didn’t materialize. “There was always the understanding that we would come back for that at a later point,” said Tower Clerk-Treasurer Linda Keith.

Kringstad said he may still receive additional private investment, but that any extra funds would go towards advancing the timeline on either the town homes or the restaurant and apartments. “Any additional investment will simply speed up the development,” he said.

Wednesday, August 19