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It was one of the tougher assignments in state government: sending a Republican to oversee a traditional DFL fiefdom on the Minnesota Iron Range.
Tapped for the job by Gov. Arne Carlson, James Gustafson brought a critical eye to spending by the Iron Range Resources and Rehabilitation Board (IRRRB), an economic development agency in northeastern Minnesota.
“He caught a lot of flack,” recalled Carlson. “You had to have somebody who had the personality as well as the courage to work in a pretty tough environment.”
Gustafson, a prominent Duluth politician for decades, died late last month from complications of heart surgery. He was 75.
Gustafson earned a degree in economics and history from Ohio Wesleyan University and returned to his hometown of Duluth to run the family business, A&E Supply Co.
He served on the Duluth City Council and was elected three times in the late 1980s and early 1990s to the Minnesota Senate.
Carlson picked him in 1992 to become commissioner of the IRRRB, which uses taconite taxes from the region to fuel business ventures. The agency has long been dominated by Iron Range DFLers protective of projects subsidized with the regional taxes, and Carlson was something of a foreigner.
“Jim Gustafson was out of Duluth and not part of the Iron Range, but he understood it,” Carlson recalled.
When Gustafson was appointed, the agency was recovering from some high-profile setbacks, like investing in a chopsticks factory in Hibbing that went belly up.
Gustafson vowed that future ventures get more careful study before subsidies.
“The first thing we say is, ‘Does it really make sense for your business to be in Hibbing [or] Grand Rapids?’ ” Gustafson said in a 1996 interview.
“If we don’t see economic reason … we know we’re doomed to failure,” he explained. “When the subsidy expires, the business leaves or says, ‘We have to have more subsidies.’ ”
Said Carlson, “He was insistent that the project had genuine validity from the perspective of the community and not just a favorite item for local legislators.”
DFL Iron Range legislators on the board saw it differently. When Carlson announced that he was appointing Gustafson, then board chairman Rep. Joe Begich, DFL-Eveleth, predicted “political confrontation” and the demise of some major initiatives.
“There was a lot of tussling over who actually was in control of the agency and who has the final say,” said son Eric Gustafson.
At the time of his death, Gustafson was CEO of Chester Creek Technologies in Duluth.
In addition to Eric, he is survived by son Stephen, daughter, Jill, and grandchildren Halle, Carlie, Ben and Charlie Gustafson.