Funding setbacks threaten North Shore harbor project

02/07/2006

BY JANNA GOERDT
Duluth News Tribune

A safe harbor and marina along Agate Bay in Two Harbors, Minn., that’s been in the works for a decade is suddenly on shaky financial ground.

A federal funding squeeze and stiff competition for state bonding money has left the project “in limbo,’’ said Larry Killien, harbors program coordinator with the Minnesota Department of Natural Resources.

The safe harbor is a collaborative project between the U.S. Army Corps of Engineers and the DNR. The federal and state agencies each will contribute about half of the estimated $6 million to $9 million to plan and build the breakwater and basin.

The Two Harbors project is one of a series of safe harbors planned along the North Shore. Other harbors are planned or under construction at McQuade Road, Knife River, Silver Bay and Grand Marais.

The setback could be a big one for Two Harbors. The safe harbor and marina have figured prominently in plans to revitalize the waterfront and downtown areas.

“It was a real blow,’’ said Chet Bianco, chairman of the Harbor Advisory Committee in Two Harbors. “Without this money, there is very little we are able to do. This could set us back a couple of years.’’

Gordy Anderson, president of the Two Harbors Area Chamber of Commerce, said the marina alone wasn’t going to bring life back to the industrial-looking areas of Two Harbors’ waterfront, but it would be a step in that direction.

“It’s time we pull together as a community and influence our legislators to seek this funding again and not take it as if this isn’t going to happen,’’ Anderson said. “If we’re serious about having a marina, we have to find that funding.’’

The Army Corps of Engineers approved about $3.5 million for the Two Harbors project in 1998, said Gary O’Keefe, chief of planning for the Detroit district of the corps. Some of the engineering and design work already has been done.

But continued delays in buying the waterfront property needed for the harbor meant that most of the allocated money was spent on other corps projects, O’Keefe said.

The Two Harbors project remained an approved project, but it was bumped toward the bottom of the funding list, O’Keefe said. Instead, corps projects that had been selected more recently or already were under construction received money.

Killien learned of the funding freeze in November during a routine conversation with an Army Corps of Engineers official. The news filtered down to Two Harbors in recent days.

For its share of the project, the DNR is seeking $3 million in state financing through the 2006 bonding bill. However, the $3 million request hasn’t been included in Gov. Tim Pawlenty’s $897 million bonding proposal. Area legislators are working to get the safe-harbor request included in the bonding bill, Bianco said.

The DNR began with nearly $4 million for the project but unexpectedly had to spend $3 million to buy the 27-acre parcel on Agate Bay.

A bill authorizing money for the Two Harbors project and other harbor projects has been passed in the U.S. House but is languishing in the Senate, said Mary Kerr, press secretary for U.S. Rep. Jim Oberstar, D-Minn.

Plans for a marina would include a collaboration between the DNR and Two Harbors, Killien said. Those plans are preliminary, and the marina ultimately could be owned by the city, the DNR or an intermediary.

The most recent plans called for design and engineering work on the safe harbor to be done by August 2006, with construction beginning in May 2007.