With the Cook County/Grand Marais Economic Development Authority (EDA) owing $100,000 each to Cook County and the City of Grand Marais that it doesn’t have the money to pay back, a glimmer of sunshine might be breaking over the horizon. The Cedar Grove Business Park, developed by the EDA, has 5.15 acres of wetland credits it might be able to sell for over $100,000.
According to Dave Demmer, who handles land use permits and provides wetland oversight in the county’s Planning & Zoning office, those involved in developing the business park knew the project would impact wetlands. Working with the U.S. Army Corp of Engineers, they went through the process of mitigating those impacts through the purchase of wetland credits.
Demmer said EDA Director Matt Geretschlaeger wanted to make sure they purchased enough credits to cover all loss of wetland, so they bought 11 acres of credit from a wetland bank in Mower County. The credits will preserve 11 acres of wetland on a piece of property in Northfield.
Demmer said Geretschlaeger believes Cedar Grove will impact only 3.9 acres. A state-mandated formula requires each acre of wetland loss not replaced within the same county to be mitigated by the purchase of 1½ acres of credit from another county, however, so Cedar Grove’s loss of 3.9 acres will preserve 5.85 acres in Northfield.
The 1½-to-1 preservation ratio helps the state operate at a net gain. Since 1991, Minnesota’s Wetland Conservation Act has ensured that the state experiences no further net loss of wetlands. Prior to that year, the state had been losing wetlands for years through farming and development.
Demmer said that 80% of Cook County’s wetlands are still intact. An exemption called a de minimis (which according to Dictionary.com
means “so small or minimal in difference that it does not matter or the law does not take it into consideration”) allows up to 400 square feet of shore land wetland disturbance or 10,000 feet of other wetland disturbance without having to mitigate. Property owners must apply for the exemption. The state has determined that it can afford to lose this amount for small developments since it has the 1½-1 net gain for larger developments.
Buying wetland credits does not create new wetland or restore former wetland, Demmer said, although some people who own farmland are creating conservation easements by taking out or stopping up old drain tiles that farmers once put in to create tillable land. New wetlands created where none existed before are not considered as high in quality as natural wetlands, Demmer said.
Of the 11 acres of wetland credit purchased by the EDA for about $80,000, 5.15 acres are unused. According to Demmer, the EDA will be applying to put these credits back on the market. Nine of the acres were bought by the EDA at $8,000 an acre, and two were bought at $5,000 an acre, costing a total of $82,000. They are now worth approximately $20,000 an acre. Prices are set by the Minnesota Board of Water & Soil Resources. As the Rochester area continues to be developed, Demmer said, prices have gone up. Selling the credits involves various fees, however, so the amount the EDA could get for its 5.15 acres is unknown at this time. Demmer is working on getting those numbers for the EDA.
Even though wetland credits for the Cedar Grove Business Park have already been purchased, businesses that locate there may be required to build retention ponds. Dave Saethre of Nordic Electric had to build a retention pond on his property, but that was for managing storm water runoff, a separate issue from wetland impact.
In the meantime, the EDA is expecting $100,000 from the Township of Lutsen near the end of January, which it can use to help pay its debts to the city and the county. Lutsen was the fiscal agent for an Iron Range Resources grant for the paving of Superior National golf cart paths and will be passing the grant money along after its January 19 meeting.
The EDA borrowed $100,000 from both the city and the county to keep Superior National open until summer 2009 golf course revenue came in. Business did not turn out to be as good as expected, however, perhaps partly due to the very cold summer.
TheEDA continues to struggle to pay its bills. In December, the EDA asked the county for an advance on a $31,000 loan the county had agreed to give the EDA in 2010 as an alternative to increasing the EDA levy for 2010 expenditures. The county board denied that request. At the December 22, 2009 county board meeting, Commissioner Bob Fenwick expressed frustration after finding out that the EDA had not budgeted for repayment of the $31,000 in 2010.
Commissioner Jan Hall said, “They need to disband.”
At the subsequent county board meeting on January 5, the county did pass a unanimous motion to release the $31,000 loan, on the condition that it is repaid in full in 2010.
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