TOWER- A recent lawsuit by a division of Wells Fargo Bank against the owners of Your Boat Club has drawn attention across Minnesota’s lake country, including here in Tower, where the company operates a marina along the East Two River. But co-founder Luke Kujawa says the filing won’t affect the company’s operations in Tower or its nearby marinas in Ely.
Kujawa joined Tower’s waterfront scene in 2017, when he purchased and redeveloped a privately owned marina along the East Two River into what became the Your Boat Club Tower location. Today, the marina serves members and short-term renters with direct access to Lake Vermilion, anchoring a small cluster of growth on the city’s southwest side.
“It’s business as usual,” Kujawa said in a phone interview with the Timberjay on Wednesday morning. “I don’t expect any disruption of service in any way, shape, or form.”
The company, which operates more than 40 marinas in Minnesota, Wisconsin, Illinois, and Florida, was the subject of a Minnesota Star Tribune story last Thursday reporting that Wells Fargo Commercial Distribution Finance had filed suit in Hennepin County District Court seeking to repossess 269 boats over an alleged $4.5 million loan default. The Star Tribune also reported that Kujawa said he was surprised by the filing.
Kujawa said that description leaves out key details.
“This negotiation has been going on since early summer,” he said. “The only surprise was the mechanics of it, the timing and the fact it became public so quickly. The loan was cured before or about the same time, within a day or so, of the lawsuit being filed.”
Kujawa described the filing as a procedural step that occurred while refinancing discussions were still underway.
“It’s really about finding the right financial product,” he said. “We’ve been working on getting boats refinanced and finding the lender that fits our model better.”
Members of Your Boat Club pay an annual fee, typically between $5,000 and $5,500, for access to boats at participating marinas, or can book daily or weekly rentals. According to the Star Tribune, Your Boat Club has a fleet of nearly 400 pontoons, fishing rigs, and runabouts. Wells Fargo’s lawsuit names 269 vessels in its filing, ten of which are linked to the Tower marina. However, Kujawa emphasized that the lawsuit does not impact the club’s ability to continue regular operations in either Tower or the two Ely-based marinas it maintains.
“There’s no limitation on leasing boats to our members,” Kujawa said. “Operations are normal. And there’s a lot more to that facility than just the boats, the marina, the slips, the storage, the service, all that. We expect no disruption in service in any way.”
Kujawa said customer reactions have been encouraging after he’s taken time to explain the situation.
While the article about the Wells Fargo filing stirred speculation online, Kujawa said the company remains solidly positioned. He emphasized that Your Boat Club has continued meeting its financial obligations and hopes to complete new financing arrangements soon.
“We’re moving forward,” he said. “We certainly are approaching and in discussions for various long-term solutions. The short-term fault has been cured, and we have every intention of continuing to be there.”
Separate tracks
The attention surrounding the lawsuit also prompted questions about another venture involving Kujawa, the large residential project now under construction immediately behind the Marjo Motel in Tower. The site, owned by Marjo RE LLC, is being developed by Kujawa and business partner Michael Jellish.
Kujawa said there’s no financial connection between the Marjo RE project and the Wells Fargo matter.
“There’s absolutely no cross-over impact,” he said. “They’re completely separate projects and separate businesses.”
He added, “Wells Fargo has no part in any of the financing or anything for the Marjo RE property.”
The Marjo RE development, called The Village at Vermilion, covers about 18 acres between the Marjo Motel and Your Boat Club’s marina. Three homes have been framed up to date and one has been completed and are awaiting final plat approval before sales begin. Full build-out of the property is expected to include between 42 and 48 units, Kujawa said.
“I absolutely love that project,” Kujawa said. “It’s a really underutilized resource for the city. There’s a shortage of housing in the area, and also a shortage of properties on the lake. I love the project, and I’m still 100 percent committed to it.”
Distinct from harbor redevelopment
Because the Marjo RE site lies near the harbor and the Marjo Motel, residents have sometimes confused the project with the city’s ongoing harbor redevelopment plan. Kujawa clarified that he has no role in the harbor project being pursued by the Tower Economic Development Association and another private developer.
“I am not part of that,” he said. “My sole focus has been on the Marjo RE side.”
He added that he supports the harbor initiative and the city’s wider economic growth.
“I want the town to thrive, because that’s good for everybody,” he said.
A steady outlook
The combination of a court filing, complex financing language, and fast social-media chatter was enough to make the Wells Fargo story sound dire when it first appeared in the state’s metro press. But Kujawa maintains that Your Boat Club remains stable and forward-looking.
“The whole way the thing went down was just kind of bizarre,” he said. “We’re moving forward. We’ve invested a lot here. We’re committed to Tower, committed to the project, and committed to our members. That’s not changing.”