EDA settles with engineering firm regarding now defunct Sawtooth Cottages project

The Cook County - Grand Marais Economic Development Authority (EDA) has finally reached a financial settlement with an engineering firm for work that had been done by that company for the Sawtooth Cottages housing project that never happened.

In 2008, after many months of considering a residential subdivision with some affordable housing units adjacent to its Cedar Grove Business Park in Grand Marais, the EDA halted its work with the Northern Communities Land Trust on the project. At that time, EDA board members expressed concerns about the small size of the proposed footprints of the homes and about how the economic downturn would affect potential buyers when they attempted to obtain mortgages. In September 2008, EDA board members regretfully passed a unanimous motion to not proceed.

However, before deciding to discontinue the housing project, the EDA had contracted with Short, Elliot, Hendrickson (SEH) of Duluth to create engineering plans for the proposed 13-lot development. In August 2008, after bids were let and came in much higher than anticipated, stakeholders in the Sawtooth Cottages project met and discussed downsizing the project. Bonding options, tax-increment financing, and reducing the number of donated lots were discussed. SEH said it could reduce its fees to draft a new proposal with decreased lot sizes and clustered homes, which would save on infrastructure expenses.

SEH provided engineering and surveying for the plan under a development agreement. Since no lots had been developed or sold, SEH received no reimbursement at the end of the agreement in 2012 and sought legal action to be paid $126,000 for its work on the now defunct project.

At the June 11, 2013 EDA meeting, the EDA board passed a motion to accept a settlement recommended by its attorney, of $30,000.