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Editorial: Don't abandon plan for Vermilion park

U.S. Steel, state negotiators should keep working on a deal.

Last update: April 18, 2009 - 10:49 PM

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PAWLENTY ON PARKS

"If the Legislature will allow some additional authority, we might be able to close the deal. But in fairness to the Legislature and to the appraisal process, I don't think it's responsible to pay more than the fair market value for the property."

Gov. Tim Pawlenty

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Minnesota's tight budgets over the last several years have prompted state leaders to focus more on semiannual budget forecasts than on any lasting legacy.

A rare exception was Gov. Tim Pawlenty's proposal -- backed by bipartisan support in the Legislature last year -- to add the first new state park in 30 years.

The proposed park was to occupy 2,500 acres currently owned by the U.S. Steel Corp. on Lake Vermilion, adjacent to the Boundary Waters Canoe Area and Superior National Forest. The new park would abut Soudan Underground Mine State Park, and together the two parks would provide more than 10 miles of recreational shoreline on a lake that includes 365 islands spread over 40,000 acres of water.

But a dispute over the value of the land may have doomed the deal.

Not that the state is unwilling to pay a premium for such a premium piece of property. The state is authorized -- and willing -- to pay up to 12 percent more than the assessed land value.

Apparently that isn't enough for U.S. Steel. Negotiations with the state have broken down, and the company is pursuing a private development option, with the latest step in that process approved by the St. Louis County Board last Tuesday.

So instead of creating Lake Vermilion State Park -- which, according to initial estimates, would generate over $8.5 million in visitor spending and would be open not just to Minnesota's 5.2 million residents, but people worldwide -- the land could be sold off as 148 private lots.

The breakdown in negotiations is more a dollar dispute than a policy problem. Both parties are accountable to constituencies, with U.S. Steel a publicly traded company and the governor and legislators representing constituents. Like all private entities, it has the right -- indeed, may have the fiduciary responsibility -- to maximize revenue received for its assets.

But U.S. Steel, a Pennsylvania-based company that makes money in Minnesota through the extraction industry, has the chance to give something back to the state. It would help accomplish the company's stated priority of building "value" for several key constituencies, including "the communities in which we operate using the same responsible approach that has positioned us as a leader in our industry."

U.S. Steel reportedly assessed the value of the property at $20 million, or $6 million more than the state assessment. But the leadership at U.S. Steel, a Fortune 500 company with $23.8 billion in revenue in 2008, is no doubt aware that there is more at stake in Minnesota than a few million dollars. If the two sides can reach an agreement, U.S. Steel will have earned public relations points by playing a key role in the development of the first major park in Minnesota in 30 years.

The deal isn't dead until the private-development contracts are signed. Now would be the time for Pawlenty to use the considerable good will he has with the business community to put pressure on U.S. Steel to reconsider.

And if that fails, considerations should be given to adding a new park in a different location, which would fulfill the governor's and Legislature's good intentions of doing this generation's part to preserve and protect portions of this beautiful state.

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