DNR and residents sue to block controversial resort development outside Ely

State environmental regulators and a group of northeastern Minnesota residents have filed separate lawsuits to block a controversial $45 million resort development proposal near the edge of the Boundary Waters Canoe Area Wilderness.

The lawsuits were filed by the Minnesota Department of Natural Resources and by Community Advocates for Responsible Development, or CARD.

They allege Lake County planning officials violated their own rules to protect shoreland when they approved permits to expand the more than century-old Silver Rapids Lodge, located along the channel between White Iron and Farm Lakes east of Ely.

Project developers propose to add 49 one-fourth “fractional share” cabins to the site, renovate existing cabins and a motel, and build a new lodge with a restaurant, bar and indoor pool. They also propose creating dock space for up to 75 boats.

The proposal sparked an outcry from nearby property owners when it was unveiled this summer. One resident wrote it would create a “mini Disney” at a location just a two-mile paddle from the edge of the canoe wilderness.

Others worried the complete facility would encourage a Lake Minnetonka, party-like atmosphere in an area residents and tourists value for quiet and solitude.

Push back

The developers pushed back against those claims, saying the development would cater toward a clientele that also appreciates the area’s wilderness character. They add the aging resort required a major refresh and environmental upgrades to remain viable.

Lake County officials approved the resort expansion on Sept. 6. They also denied a petition signed by hundreds of local residents asking for a more stringent environmental review of the proposal.

The Minnesota DNR and residents argue the proposal violates ordinances Lake County developed in the 1990s — in conjunction with the DNR — to regulate shoreland development.

“The planning commission’s recent approval of the project appears to disregard these ordinances in key areas,” wrote Katie Smith, ecological and water resources director for the DNR, a week after the county approved the plan.

In its suit, the citizens’ group made up of local residents said the developers “mischaracterized the permitted use of the resort property, and exceeded — by double — the maximum densities permitted for such property under both local and state law.”

Both Lake County and the project developers denied those allegations in court filings. They both declined comment during the ongoing litigation. A hearing in Lake County district court is scheduled for Nov. 27.

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