Grand Marais denies hillside townhouse project, but developer has a backup plan

The Grand Marais, Minn., City Council denied a proposed townhouse project Wednesday night, with no commentary after voting.

A developer had proposed 19 Scandinavian-influenced townhouses on a largely undeveloped block on the city’s hillside, a few blocks from downtown. Five of the homes would be designated for buyers who meet moderate income requirements and are employed in Grand Marais, a stipulation that helped developer Jon Petters secure more than $400,000 in local grants and apply for a larger state housing grant.

The North Shore city has experienced a housing shortage for years.

Petters said Wednesday night that he’d move ahead with a different proposal.

“We respect the city’s decision and we are looking forward to working with them on our new plans,” he said.

Under current zoning, Petters can still build single-family homes but needs certain city permissions to move forward. New plans will likely not include homes priced lower than market rate.

Mayor Tracy Benson didn’t immediately respond to a request for comment Thursday morning. But she said at a recent meeting that she was unsure whether what’s envisioned would help the community.

Neighbors say they are concerned about a lengthy construction period, city assessments for road improvements, the blasting of the region’s signature bedrock and increasing density in the neighborhood. Some say it’s the wrong site for that kind of development and fear long-term implications of more second-home owners in the city of about 1,400 residents.

Council members had expressed concern that the road in front of the block is too narrow to support increased traffic, and they are now exploring its widening.

Petters said his project would have kept open 60% of the more than 2-acre site. A grant had been secured to help pay for new infrastructure, and part of his agreement to receive funding from the Cook County Housing and Redevelopment Authority included a ban on owners allowing vacation rentals.

While new zoning wouldn’t have allowed the construction of more units, it would have allowed builders to work around difficult terrain.

Requirements of a homeowners association would protect the city’s dark sky initiatives, Petters said, and he had intended to widen the road near the development.

On Wednesday, Visit Cook County Executive Director Linda Jurek told the council that the project would attract workers and allow residents to age in place.

“We should be open to working with outside developers, especially those that have secured dollars to improve infrastructure,” she said.

The city’s planning commission had approved the townhouse project.