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Minnesota Taxpayers Spent $4M on Harbor that Doesn't Exist

Updated: 06/04/2014 5:20 AM
Created: 06/03/2014 2:55 PM KSTP.com
By: Jay Kolls

It's supposed to bring new jobs to a small Minnesota town along Lake Vermilion, but so far the Tower Harbor Project has cost taxpayers millions of dollars with no harbor - seven years later.

A little more than $1 million of the project was spent on a new Highway 169 bridge over the East Two River, which flows from Tower into Lake Vermilion. The rest of the money has been spent on land acquisitions, environmental studies and engineering costs.

The Tower Harbor Project is designed to dredge the East Two River for a new harbor replete with a hotel, shopping, restaurants and docks for up to 100 boats.

The project started in 2007 with four phases, which were to be finished within 10 years. Seven years later, millions have been spent and phase one, according to the Master Plan, is not even finished.

Right now, there is no contract with a developer and money from the state of Minnesota and the Iron Range Resources and Rehabilitation Board has dried up.

The new Highway 169 bridge is nice, but even the price of that construction went up by $30,000 to build a frog crossing under the bridge at the request of the DNR," Tower City Council Member William Hultinen said.

Hultinen says he's "confident" the state will help with more money and the harbor will eventually be built. But, Hultinen says, "it has been frustrating up to this point to have millions spent and nothing much to show for it, so far."

Tony Sertich, head of the Iron Range Resources and Rehabilitation Board (IRRRB), which has contributed over $300,000 to the harbor project, tells 5 EYEWITNESS NEWS, "There will be no more money coming from the IRRRB until more matching money is raised by the city of Tower."

The IRRRB gave Tower a $120,000 grant to buy solar panels and two electric cars. The solar panels are already installed, and Tower has also purchased the two electric cars. The idea is to use the electric cars to shuttle tourists between downtown Tower and harbor when it is built. The city of Tower put in a bonding request in the last legislative session but did not receive any additional money for the project.

An internal email from the Minnesota Department of Employment and Economic Development (DEED) obtained by 5 EYEWITNESS NEWS indicates there is a lot at stake, politically, for Iron Range politicians.

The email, sent in June of 2013 from a DEED employee to the Commissioner of DEED, Katie Clark-Sieben, says, "Can we touch base on this as soon as you have a few moments? This project is politically sensitive, being that the project is in Majority Leader [Tom] Baak's district, and Senator [David] Tomassoni has been following up on the request." 

The request appears to be for more financial help, at taxpayers' expense, to keep the Tower Harbor Project on track.

We reached out to both Senator Baak and Senator Tomassoni for an on-camera interview, and we were told they were too busy during the legislative session. After the session, we again requested interviews with both Senators, but did not hear back from their media relations manager.


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