Duluth hotel opponents fail to post $1.6 million bond to halt construction

DULUTH – Opponents of a Duluth hotel project failed to post a City Council-imposed $1.6 million bond to halt construction while the state appeals court decides their environmental review case.

The Duluth City Council last month approved a hold on work for a hotel near the Miller Hill Mall after opposition from neighbors, but said a bond was necessary to cover potential losses to the Iowa-based developer.

The group has appealed to the Minnesota Court of Appeals a previous City Council decision that said an Environmental Assessment Worksheet [EAW] isn't necessary. They argue it wasn't the council's decision to make, contending it's up to the state court, per local and state laws. A city-appointed group of citizens that make up a commission for city development had initially directed developer Kinseth Hospitality Cos. to conduct an EAW, prompting the developer's appeal to the City Council.

Now, the neighbors are asking the appeals court to halt construction and waive the bond requirement, saying the amount wasn't backed by proof. Attorneys for both the city and the developer have asked the court to deny that request and uphold the City Council's decision.

Court documents filed by Kinseth attorneys detail how the company arrived at the bond amount. In its filing, Duluth attorneys say that councilors were within their purview to both require a bond and reverse the Planning Commission's initial decision.

In the meantime, Kinseth is free to seek a building permit and go forward with its project.

Becca Mulenburg, who filed the state court appeal, said a pause of the project — a planned 100-room hotel near the impaired trout stream Miller Creek — was necessary while the EAW issue was decided. If a review is done after construction begins, she said, the landscape will have already been altered by construction.

"It's frustrating" that their appeal to the state court may not be decided before land is cleared, Mulenburg said.

"The whole reason for an environmental review is about the sensitivity of the land in the Miller Creek watershed, where the proposed hotel would be built," she said.

An attorney for Kinseth has said the bond amount would cover a minimum of its losses for stopped work, likely to include an entire construction season.

City administration has said potential effects of hotel construction, such as warm-water runoff, would be controlled through provisions in the city zoning review and building permit process.

Kinseth has said it will go forward with its plans even if required to do the review.