3rd Street construction set to begin in Grand Marais this summer

After several years of discussions and iterations of the proposed Bjorkberg housing project, the city is moving forward with improvements to 3rd St.

With the recent approval of a bid from KTM Paving Inc. during the May 20 city council meeting, construction on 3rd St. is slated to begin in July.

The street improvements will include widening, adding curb and gutter on the south side of the street, and installing sewer and water infrastructure.

For several years, the council has continued discussions about potential improvements to 3rd St., prompted in part by the proposed Bjorkberg housing project from developer Jon Petters.

Proposed Bjorkberg housing project location in Grand Marais

The Bjorkberg project has undergone numerous iterations since the initial proposal as a 21-unit townhome development on 3rd St. between 6th Ave. and 7th Ave. The plans for the latest rendition of the Bjorkberg have not been presented to the city council or approved, but the project is expected to be a smaller version of the proposed housing project.

One of the main areas of focus for the city council in the past year, before any housing project moves forward, has been determining the cost of the needed improvements to 3rd St. and the associated costs for extending utilities between 6th Ave. and 7th Ave.

City officials have stated that the road is substandard and needs to be widened to accommodate additional housing density and increased traffic.

3rd St. in Grand Marais will undergo construction this summer | Photo by Kalli Hawkins

“We’re doing our best to make it a little bit better for people and more people coming in and out of those driveways,” Grand Marais Mayor Tracy Benson said.

In August of 2025, the city council voted unanimously to approve a developer’s agreement with the Bjorkberg developer, contingent on coordination with the City of Grand Marais and the final costs of infrastructure for 3rd St. Once the city received the estimated project costs, the council will amend the developer’s agreement to reflect the identified costs.

Earlier this winter, the city reviewed draft construction plans for the street improvements, presented by Jon Loye, the public works project manager with MSA Professional Services.

Then during the May 20 meeting, the city council reviewed bids for the project and the estimated costs. Ultimately, the council approved a $428,900 bid from KTM Paving Inc.

The city bid the various components of the project together for efficiency purposes, although several parties, including Petters, will be responsible for their respective portions of the project’s cost.

Benson said, “Everyone’s responsible for their own respective piece.”

Petters will cover the costs for the majority of the western portion of the project, including running sewer and water infrastructure into his property. A property owner on the south side of the street opted to connect to the sewer and water infrastructure once installed and will also be responsible for a portion of the project costs.

WTIP’s Kalli Hawkins spoke with Grand Marais Mayor Tracy Benson about the summer construction on 3rd Street, the recent news from the legislative session about $1.9 million in state funding awarded to the City of Grand Marais, an update on the transfer of the U.S. Coast Guard station property, and more. Audio is below.

Kalli Hawkins May 30, 2026