Judge takes away operation of Superior Shores Resort from owner of fire-ravaged Lutsen Lodge

A judge has temporarily handed over the operation of Superior Shores Resort north of Duluth to a caretaker after its owner, who also ran nearby Lutsen Lodge until it burned down in February, missed payments toward the $15 million price tag for the massive property overlooking Lake Superior.

Lake County District Judge Steven Hanke’s emergency order, issued last week at the request of the seller and now in effect, removes Bryce Campbell from running the Two Harbors vacation destination for at least 60 days.

Attorneys for both parties — Campbell and his Shores Resort Co., and seller Joe Re and his Blue Waters Development Corp. — have yet to reply to messages for comment about the judge’s order. Both sides are due back in court Wednesday to debate the property’s operation under receivership.

The luxury resort is now being operated by Iowa-based Kinseth Hospitality Cos. The judge’s order notes that Re has initiated “proceedings to terminate the contracts for deed” that had allowed Campbell to control the resort ahead of paying for the property, and while the seller retains the title.

Campbell’s attorney wrote to the court two days after the judge’s order in opposition to the installment of a receiver. He argued that the “plaintiffs have not, and cannot, provide clear, strong, or convincing evidence that a receiver is warranted.”

Attorney Scott Witty’s filing added that “what plaintiff has done is obtain an extraordinary remedy from the court through the omission of essential facts surrounding the contractual payment terms between the parties and defendant’s unwavering compliance therewith.”

The judge’s order spelled out numerous instances of Campbell being in default. They include three missed payments as of June 1 totaling nearly $13 million, the failure to pay property taxes and other expenses, and the failure to keep “the properties in good repair, working order and condition.”

Campbell acknowledged in the days after the fire that he owed $150,000 to several people who own cabins and condominiums near the lodge that he managed for rental. Some sued Campbell, alleging he withheld proceeds from the rentals for many months.

According to its website, the resort offers an array of luxury amenities, among them: indoor and outdoor pools, hot tubs, a sauna, a fitness center and an on-site fine dining restaurant. Suites include natural gas fireplaces and private walkout balconies.

Along with Superior Shores, Campbell also owned Lutsen Lodge until fire leveled the vacation destination in February. The lodge had been in operation for nearly 140 years and billed itself as the state’s oldest resort.

The State Fire Marshal’s investigation into how the fire started is ongoing, a spokeswoman for the agency said this week.

Campbell has pushed back on rumors that he was somehow responsible for the blaze on the property that he and his mother and business partner, Sheila Campbell, bought in 2018.

Star Tribune staff writer Mike Hughlett contributed to this report.