City Council denies Bjorkberg conditional-use permit, further discussion about 3rd St. improvements needed

A proposed 21-unit townhome development remains in limbo after the Grand Marais City Council voted 3-2 to deny a conditional-use permit during the Aug. 14 meeting.

The Bjorkberg project is a proposed planned unit development (PUD) located at 601 and 651 West 3rd St. in Grand Marais, a location commonly referred to as Birch Mountain to many area residents. The property totals approximately 2.4 acres and will be completed in two phases.

The Bjorkberg project and one of the developers, Jon Petters, previously went before the Grand Marais Planning Commission on Jul. 3 for a conditional use permit (CUP), which was unanimously approved. On Jul. 31, the city council reviewed the CUP and ultimately decided to table the matter until details regarding accessory dwelling units and needed improvements to 3rd St. were further researched and discussed.

Then, on Aug. 14, the city council again reviewed the CUP with the updated changes. The accessory dwelling units were removed from the project, and a proposal to widen a portion of the 3rd St. at the developer’s expense was included. The widened portion would occur between 6th and 7th Ave to address safety concerns adjacent to the development and avoid assessments or modifications to neighboring properties.

After reviewing the updated changes, Grand Marais Mayor Tracy Benson said that was not an adequate solution. Instead, she said, an engineered plan to widen and improve the entire road was needed to support the densely populated housing development.

“3rd Street is not a well-developed street. It can’t take two-way traffic,” Benson said. “I think already it may have issues before we even talk about development, whether it be yours or someone’s elses. It means that 3rd Street does need some attention.”

Benson added, “I would not feel comfortable leaving 3rd Street as is.”

Councilor Ben Peters said, “I know nobody wants to pay more money for those improvements, but it’s what we have to do. We can’t allow 3rd Street to be 12 feet wide and accommodate another 30 vehicles.”

“I would agree with that,” Councilor Michael Garry said. “We do need to do something.”

Councilor Craig Schulte agreed and said the additional problem is that bordering 6th Ave and 7th Ave are dead-end streets, and the only access to this property is 3rd St.

After much discussion, City Administrator Mike Roth proposed the city proceed with a feasibility study and cost estimate of the 3rd St. improvements.

Concerns over increased traffic on an unsuitable road were among the handful of concerns raised by surrounding neighbors during the planning commission and city council public comment periods. Other concerns highlighted the issue of significantly reducing or removing green space, the affordability of the townhome units, construction concerns due to the challenging topography, and a change in the neighborhood’s culture.

The council voted 3-2 to deny a resolution approving the Bjorkberg CUP. Voting against the CUP were William Lovaas, Benson, and Schulte. Voting in support of the CUP were Garry and Peters.

Towards the end of the meeting, the council discussed scheduling a work session to have a larger discussion about the city’s role and responsibility to increase access or provide improvements to roads and infrastructure for future development.

Bjorkberg Phase 1 & 2

The proposed 21-unit project will be divided into two phases.

Phase one will begin this fall, pending approval from the city council. It will include 9 townhome units sold to interested buyers at market-rate value on the west side of the 2.4-acre lot.

The timeline for Phase two, on the other hand, which will take place on the east side of the property, is somewhat unknown at this time. Phase two includes 5 subsidized affordable or ‘attainable’ townhomes sold to qualified individuals and 7 more market-rate townhomes. According to the Housing and Urban Development (HUD), affordable housing is housing that costs 30 percent or less of a household’s income, including utilities.  

Petters said in the Aug. 14 meeting that he has a purchase agreement with the property owner, Tony Everson, for the east portion of the property. A condition of the agreement is that Everson’s parents, Wally and Sandra, are allowed to continue residing in their home for as long as they choose.

During the meeting, Mayor Benson asked Petters about expected price points for the market-rate townhomes. Petters said he couldn’t speak to the expected market-rate units as the cost is still unknown at this time. He then said, “I’ll defer the question to my team.”

A member of his development team responded to the council and said the price points are not finalized, given the challenges they are experiencing with securing contractors for the project.

However, the team member said, a ballpark estimate of more than $400,000 per unit is expected.

For Phase two of the project, Jason Hale, the executive director of the Housing Redevelopment Authority, said during the meeting that the five subsidized affordable or ‘attainable’ townhomes have a homestead requirement. In addition, Hale said, “They have to show proof that they are employed in Cook County.”

View the Aug. 14 city council meeting here.

Listen to a WTIP interview with Jon Petters about the proposed Bjorkberg development below.

Kalli Hawkins August 15, 2024