Tiny Tower, Minn., has big tourism hopes

TOWER, Minn. – A new harbor dug at the south end of this Iron Range town has awakened hopes that bustling summer tourist seasons, new commercial development and fresh growth for the depressed mining region could be just a few more investors away.

It would be a welcome change here, where locals over the past few years have weathered the loss of their high school, a main street dotted with boarded-up storefronts and even the shuttering of their storied watering hole, Margie's Iron Ore Bar, which closed four years ago when Margie passed away just shy of her 91st birthday. And now mine layoffs in nearby towns have all of the Range on edge.

Or maybe it's because of all of those things that Tower Mayor Josh Carlson crackles with excitement whenever he talks about the harbor project.

"This is going to be big," he said on a recent morning, standing on the shoreline of the 2-acre spot dredged out of the East Two River this winter. The project, first dreamed of decades ago and finally begun in 2007, restores the town's historic connection to scenic Lake Vermilion, the 61-square-mile lake that's home to some 7,000 cabins and Minnesota's newest state park.

Soon, Carlson said, floating docks will offer slips for dozens of boats as contractors create a green space and prepare the harbor area for the main tenant, a 36-room hotel that could begin construction this fall. By this time next year, he said, Lake Vermilion boaters will cruise into town via a channel that passes under Hwy. 169 and moor boats within a short walk to Main Street. Drawings show the completed project with sidewalks, gardens, condominiums and shops.

The would-be shot of adrenaline for the faltering Tower economy isn't a done deal yet — more private and public money is needed — and even then it's difficult to know what will become of it all.

"Economic development in general is really hard to do in rural towns," said Senate Majority Leader Tom Bakk, whose district covers a portion of the harbor area. It's taken $8.1 million of federal, state and local funds so far to dredge the channel, reroute a state highway and build the Hwy. 169 bridge over the harbor entrance. Those things were critical to development taking place, said Bakk, DFL-Cook, whose Lake Vermilion house sits about 20 miles by water from Tower.

For now, the project won't proceed until the city has a signed development deal with Cobblestone Hotels. The chain has grown from one hotel in 2008 to 64 today in 13 states, including in Crookston and Faribault. The hotel's financing requires the sale of 20 shares at $50,000 apiece, Keith said. They're about halfway there.

The Cobblestone Inn & Suites originally was to be built this spring, but this isn't the project's first delay. The harbor project broke ground just as the country fell into a recession, setting schedules back years.

"Once that happened we really had a tough time getting things going," said Carlson.

If private funding is secured, the city would move ahead with the next phase of permanent docks, a boardwalk, parking lot and infrastructure at a cost of about $1.4 million, Keith said. The city wants to split the cost with the Iron Range Resources and Rehabilitation Board and the state Department of Employment and Economic Development, she added.

Early in Tower's history, the harbor was a transportation hub, with steamboats coming in off the lake to ferry train passengers out to resorts. A steam engine still sits nearby at the city's historic depot. A hotel, outfitter and boat builder filled the harbor as well.

The harbor was partly filled in when Hwy. 135 went through. It wasn't until the slowdown of the mines in the 1960s that someone first suggested reopening it, said Hanson. "They had huge plans but of course a lot of them didn't come to pass," he said.

Groundbreaking in the summer of 2007 featured local officials and the late U.S. Rep. Jim Oberstar, D-Minn., who championed restoring the harbor.

But any effect has been muted so far. A marina just across Hwy. 169 from the new harbor has 100 boat slips but remains shut down. It was listed for $3.175 million last summer; the price dropped to $1.2 million in January, according to a realty listing.

To the harbor's southeast stands a hulking concrete building that once served as a three-story icehouse for a local brewery. The former home of Margie's bar is adorned with a "for sale" banner hanging over the front entrance.

Even if the harbor comes along, some locals say it's asking too much of the tourists to help float the town's economy.

Gary Goede, who runs a barbershop along Main Street, said he's heard mixed opinions from some of the town's 500 residents. His customer on a recent day, Don Doroff, said the city doesn't have a lot of options.

"There's no industry, there's nothing here," said Doroff. "All you've got here is tourism." He's bullish on the harbor, especially if it includes the 90 condominiums envisioned in the original plan.

A few like-minded people have put money into the town's future, including two businesses expected to open up in long vacant Main Street storefronts this spring.

Antiques dealer Victoria Meloche said she was motivated this winter to open an antiques shop after seeing the harbor project's progress.

"I was like, 'Oh dang, they're getting close,' " she said.

"There's a few people who have been watching what's been going on," she said. "We're going to make things happen in Tower."

Matt McKinney • 612-673-7329