TOWER— After decades of public investment, false starts, and dashed hopes, major development at Tower’s harbor and adjacent riverfront may finally be coming soon.
At a special July 20 meeting, the Tower Economic Development Authority received letters of intent to invest in Tower Vision 2025’s harbor proposal from Luke Kujawa, president of Your Boat Club, and Jamie Tatge, president of Leisure Hotels and Resorts, LLC, a multi-million-dollar company that owns and/or manages resort and hotel properties across the U.S.
Both individuals and their companies bring substantial financial resources to the development and Tatge brings a key component that has been missing from previous proposals— decades of experience in managing such properties.
The TEDA board had previously given Tower Vision 2025 principal Orlyn Kringstad until mid-July to show his proposal for a mixed residential and commercial development on the harbor had sufficient financial backing. In his letter of intent, Kujawa indicated that he had earmarked up to $1 million toward the project. While Tatge didn’t cite a number in his own letter, he has successfully undertaken significantly larger resort-style projects in the past and has indicated he has ready access to the funds necessary to move the project forward in Tower. His Twin Cities based company manages high-end resort properties from Vermont to Oregon and owns and/or manages resort properties on Lake of the Woods, the North Shore, and Ely. And his company recently purchased Silver Rapids Lodge, near Ely, where Tatge is advancing a major redevelopment of the site.
In a meeting with TEDA executive director Marshall Helmberger last week, Tatge indicated he was intrigued with the unique nature of the harbor site and surrounding riverfront, which combines direct water access to Lake Vermilion with a major highway. The site is also at the confluence of major snowmobile and ATV trails, as well as the Mesabi bike trail and dramatic, newly developed hiking trails. The Your Boat Club marina, located adjacent to the site, also offers boat and ATV rentals as well as club memberships.
RV park developer and building contractor Justin Renner is also expected to play a role in the project although he did not submit a letter of intent as of last week’s meeting.
At the meeting, Kringstad, who is expected to serve as the on-site project manager, outlined a preliminary concept that includes a coordinated development that extends from the harbor to the Marjo property to Renner’s RV park. The overall project, should it move forward, would likely entail a hotel, retail space, a restaurant, and dozens of residential units, many of which would likely be for short-term rental.
Kringstad told the TEDA board that further analysis of the harbor site has prompted him to significantly downsize the development there due to space considerations. His original proposal had suggested up to 80 condominium units but he said there isn’t room for that many units plus the garage space that many residents would expect.
The TEDA board had questions about the project, including which entity would end up owning the development. Kringstad said that once built, he would hope that the development would be sold or transferred from Tower Vision 2025 to another entity. Kringstad, who is nearly 80 years old, said he’s looking to finish the project and retire. He said Mr. Tatge’s involvement helps to ensure that the property will be managed effectively once built. “Now we have an expert involved who runs hundreds of hotels and resorts all over the country,” he said.
The TEDA board is expected to work with the new team over the next 60 days to define the scope and design of the project. TEDA owns the land surrounding the harbor as well as a key five-acre parcel along Marina Drive, which would provide additional developable property for the project as well as improved access to the Marjo site. Should the project advance, TEDA would likely sell its properties to the developers under a development agreement.
TEDA is also requesting more financial information, although both Mr. Kujawa and Mr. Tatge appear to have sufficient funds should they opt to move forward with the project once the concept planning is completed.
Water treatment capacity
One of the issues raised by the potential development is wastewater treatment capacity. The city and Breitung Township have made some progress on reducing inflow and infiltration into the sanitary sewer system, but TEDA board member Victoria Carlson questioned whether the proposed development might not push the joint wastewater treatment facility over its capacity.
The city and township are hoping to expand the treatment capacity in the longer term, but that could take several years.
Meanwhile, it appears that the work on inflow and infiltration has made a difference. As of April of this year, the three-year average flow had been reduced to 114,000 gallons per day. That suggests more than 30,000 gallons per day of capacity.
A note of dissent
While most members of the TEDA board expressed enthusiasm for the renewed potential for the harbor project, the final motion granting a 60-day extension was approved on a 5-1 vote, with Bob Anderson voting no, without comment.