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Business and Economic News
Dan Kraker
Duluth

Backers of proposed resort expansion near Ely drop plans amid state lawsuit

Farm Lake shoreline
The Silver Rapids Lodge in Ely, Minn., on Aug. 5. Developers behind a proposed $45 million expansion of the century-old property have asked a judge to withdraw their permits following a lawsuit from the Minnesota Department of Natural Resources.
Derek Montgomery for MPR News

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The backers of a controversial, $45 million proposed resort expansion outside Ely and near the Boundary Waters Canoe Area Wilderness have asked a judge to withdraw their permits, after the Minnesota Department of Natural Resources sued to block the project.

Owners of the more than century-old Silver Rapids Lodge, between White Iron and Farm Lakes, proposed building a new lodge and restaurant, renovating a motel, and building 49 new “fractional share” cabins, each of which would have four different owners.

While some area residents supported cleaning up and updating the historic resort, others decried the development, saying it would bring increased visitor and boat traffic to a quiet area near the wilderness.

Lake County officials approved the project in September after a series of public meetings, but a local conservation group, along with the Minnesota DNR, sued, arguing that the proposal violates county ordinances developed in the 1990s in conjunction with the DNR to regulate shoreland development.

A few weeks after the lawsuits were filed, project developers submitted court documents to surrender and terminate the conditional use permit and planned unit development approvals they had received from Lake County.

In an email, Duluth-based developer Sandy Hoff confirmed that he and his partners — along with the county — had voluntarily rescinded the permit approvals.

Judge Eric Hylden has not yet ruled on the request. The Minnesota DNR wants the case to continue, out of concern that the permits could still remain in effect, and the developer or the county could move forward with similar plans at a later date.

Hoff said the developers “do not have alternate plans at this time.”

In court filings, project developers said they planned to pursue improvements to the resort that were “allowed under existing rights or a scaled down project with fewer units.”