Minnesota DNR sues Lake County to stop resort expansion near the Boundary Waters

State environmental regulators are suing the Lake County Planning Commission to try to stop a developer from building 49 new cabins at a century-old fishing resort on an entry lake to the Boundary Waters Canoe Wilderness Area.

The Minnesota Department of Natural Resources said that the planning board ignored local and state shoreline protection rules to allow the Silver Rapids Resort on Farm Lake to build the cabins. The project would accompany an extensive remodel and renovation to a motel and restaurant on the site that would also increase the size and number of docks.

The agency asked a District Court judge in a suit filed Oct. 3 to throw out the resort’s permit for the construction. A hearing is scheduled for November and no work will be allowed to start while the case is pending. A group of homeowners in the area opposed to the project filed a separate lawsuit that also seeks to overturn the resort’s permit.

Alexandra Campbell, the environmental service specialist for the Planning Commission, declined to comment on ongoing litigation. Commission member and Lake County Board Chair Rich Sve did not return phone calls seeking an interview. Sandy Hoff, one of the site’s developers, did not return messages seeking comment.

Silver Rapids opened in 1919 as a fishing resort on a stretch of shore where White Iron Lake meets the western edge of Farm Lake. The Boundary Waters begins on Farm Lake’s eastern shore a couple of miles from the resort. It has 12 small cabins on site, an 11-room motel, a restaurant and 21 campsites.

Developers asked the county Planning Commission for a permit to allow a $45 million expansion that would include a remodel of the restaurant, the installation of a tiki bar and the building of 49 new cabins that would each be sold to up to four owners apiece and rented out when those owners aren’t using them.

The expansion would increase the total number of dwelling units on the site from 13 to 62 and add 12 new docks with space for 75 boats.

But the county’s shoreline protection rules, which were written in the 1990s, allow the resort a maximum of 29 dwelling units and docks that could fit a maximum of 14 boats, the DNR argued in its complaint.

Exceeding those numbers could threaten the stability of the shoreline and the aquatic environment of both White Iron and Farm lakes, Danielle Braund, the DNR’s area hydrologist, wrote in a September letter to the Planning Commission.

“We understand the value of economic development by creating new tourist attractions in the county, however, because this project deviates so significantly from key protective provisions in the county’s ordinance, we would recommend denial of the proposal,” Braun wrote.

The lawsuit marks the third time in 15 months that the DNR has taken a local government to court for failing to enforce shoreline development rules. It sued the city of Fairmont in 2023 after council members tried to issue a permit for a restaurant to build a new dock and lake-front patio over the objections of the DNR. The city agreed to withdraw the permit a few months later.

In January, the agency sued the city of Minneapolis after it gave permission to a homeowner to build on a bluff of the Mississippi River. That case is still in court.

Lake County has stricter rules for commercial businesses to build on shorelines than much of the rest of the state. The rules were negotiated with the DNR in the early 1990s when County Board members felt the statewide protections adopted by most other counties were too lax for commercial planned unit developments and too restrictive in other areas. The DNR worked with the county for three years to develop the ordinance in place now.

The county needs to abide by the stricter local rules it adopted, rather than the less restrictive development rules used in other parts of the state, the DNR argued in its lawsuit.

The Planning Commission approved the expansion on Sept. 6, writing, “there is no clear language on commercial use” in the county’s shoreline development rules. So, the commission wrote, it used the more lenient statewide rules to make a decision.

Katie Smith, the DNR’s ecological and water resource director, wrote a letter to the commission shortly after the decision saying that simply wasn’t true.

Article 6 of the county’s shoreline protection ordinance “contains clear provisions regarding planned unit developments, both residential and commercial,” she wrote.

Smith added that even if the county ignored its own ordinance to the use more lenient statewide rules, the proposed development would still be too big. The statewide rules allow a maximum of 48 dwelling units, she wrote.