Zipline project appears to be at the end of its line

If statements by developer Matt Geretschlaeger are taken at face value, his more than two-year effort to make Superior Zipline a reality has ended and the Gunflint Trail property he obtained from the City of Grand Marais at a bargain basement price will be up for sale.

City Administrator Mike Roth stated the city has received no formal notification that the parcel is being offered for sale, however he is aware of rumors to that effect. Roth did confirm that the right of first refusal by the city, while normally included as part of city land transactions, had been removed at Geretschlaeger’s request. This condition allows for open bidding between any buyer and the seller.

There is a lot of conjecture and speculation surrounding the Superior Zipline issue and we’ve tried to put together a brief, but by no means complete series of events.

The Superior Zipline saga began in February 2012 when Geretschlaeger proposed a change in zoning and annexation of a 21-acre parcel on west Hwy 61 to accommodate a commercially operated zipline.

Public opposition blocked that plan and at the April 11, 2012 meeting of the city council, Geretschlaeger offered a new proposal to purchase approximately 20 acres held by the City of Grand Marais along the Gunflint Trail.

With little public discussion and acting with surprising speed, the Grand Marais City Council obtained an appraisal from Ramsland & Vigen Inc. of Duluth, set an asking price of $75,000, and convened on April 30 to finalize the deal with a unanimous vote. Councilor Jan Sivertson was not present at that time.

Up to this point, Geretschlaeger was employed as director of the Cook County/Grand Marais Economic Development Authority. At the May 8 meeting of the EDA, he made clear his intention to resign that position. Board member Mike Littfin was quoted in the Cook County News Herald as saying:

"We all know Matt has been involved in a private business enterprise. To avoid the appearance of conflict of interest for our director, I recommend that we lay him off, effective 30 days from today. "

Acting on this recommendation, the board agreed Geretschlaeger would continue through June. At the July, 2012 meeting of the EDA it was noted that Geretschlaeger, having been laid off rather than resigning, was now collecting unemployment.

In a business plan Geretschlaeger submitted in late 2012, the total zipline project cost was given as $825,000. It was to employ 26 people during its open season from June through October and its projected financial performance was based on operating 10 hours per day, seven day a week with an average of 22 zipline riders per hour. Additional revenue would be generated through unspecified retail sales.

A planned completion date of Spring 2013 came and went as various arrangements for financing failed to prove workable. Site work finally began in August, 2013.

In an apparent case of miscommunication, a road that had been platted was re-routed further into a designated wetland without prior approval or securing of wetland credits. This resulted in a DNR cease work order being issued in October, 2013 and affected any further construction on the lower portion of the property. Resolution of the wetland violation is expected in 2014.

One source of funding cited by Geretschlaeger was the Cook County Revolving Load Fund in the amount of $250,000. After an initial commitment by the county in July, 2012, and an extension of six months in July, 2013, Geretschlaeger still failed to provide needed documentation to obtain access to the funds.

In a letter from Assistant County Attorney Molly Hicken to Geretschlaeger and his attorney, the loan request agreement was voided as of January 24, 2014.

This project was not Geretschlaeger’s first dealings with the revolving loan fund. In February, 1998, he and his wife Vicki Geretschlaeger, doing business as North Oaks Construction, purchased Thomsonite Beach Resort for $322,000. Partial funding for that purchase was provided by the loan fund. The property was sold to the current owners 21 months later for $671,000.

The zipline project did receive funding from another source. In something of a surprise, the City of Grand Marais received $191, 552 for "an economic development project" through a public works project fund disbursement of the Taconite Production Tax. The funding was included in the House Omnibus Tax Bill along with dozens of other projects funded by the production tax, and not through IRRRB as previously represented by Geretschlaeger.

The City of Grand Marais has been overseeing disbursement of those funds for work contracted at the zipline property. As of February 2014, almost $159,000 had been spent on site preparation. According to City Administrator Mike Roth, the approximately $40,000 remaining was being retained by the city to bring electric service to the site.

When speaking to the Cook County News Herald, Geretschlaeger said he didn’t know what price would be put on the property, but that his interest was only in recovering his costs. According to his business plan, he had up to that time invested $115,000. Of that  $80,000 is in land purchase costs and $35,000 is in-kind labor.

In that same business plan, he states "The value of the new development will result in a property value of $531,000 which does not include $350,000 in zipline equipment costs." To date, no zipline equipment has been purchased.

 

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