16-unit workforce housing project in Grand Marais moves closer to construction

A proposed 16-unit workforce housing project in Grand Marais is moving closer to construction after the Cook County/Grand Marais Economic Development Authority approved a developer’s agreement this week.

The 16-unit workforce housing project was first proposed more than two years ago, but moved closer to becoming a reality this summer after local officials shifted to a new developer because of concerns about meeting a deadline tied to $1.3 million in state funding. The Minnesota Housing Finance Agency awarded the project the funding in 2025, with completion required by January 2028.

Arboda Lofts, LLC, is now the developer for the project, which is planned for the former Tomteboda Motel site next to the WTIP radio station. Arboda Lofts, LLC is registered to Ryan Nelson, co-owner of Duluth-based P&R Properties, the same company behind the Gunflint Vue apartments in Grand Marais.

“So we know already that they can do a really good job and a really wonderful addition to the community,” said Cook County Economic Development Authority Director Lucas Wakefield.

Wakefield said the EDA is serving as the fiscal agent for the state funding, while the Cook County Housing Redevelopment Authority handles the operational side of the project.

The HRA approved the developer’s agreement at a special meeting on July 29, followed by unanimous approval from the EDA on Aug. 18.

The remaining major step is approval by the Grand Marais City Council. The city owns the property and is expected to convey it to the HRA for $1, after which the HRA will convey the property to the developer.

HRA Executive Director Jeff Brand said the final signatures on the developer’s agreement were being completed this week, with the project expected to come before the city council in about two weeks.

Once the property transfer is complete, the developer will finalize engineering and design plans. Brand said the developer is now working with engineers to determine how the housing units, parking and green space will fit on the property.

Additional site work is required, including installing a new sewer system, because the previous one was removed when the motel was demolished, Brand said.

Throughout the process, the HRA and the city will review the project’s schematic designs and plans.

“We’ll make plans available as soon as I get them as well, so we can all have that conversation at once,” Brand said.

Preliminary exterior of 16-unit workforce housing project | Cook County HRA

The developer intends to begin site work and construction this fall and be making good progress on the project before winter’s arrival.

The project will include a mix of housing affordability levels. Of the 16 units, five will be designated for households at 60% of Area Median Income (AMI) and six at 80% of AMI. The remaining five units will be offered at market rate. The AMI affordability requirements will remain in place for a period of 10 years after the units are made available, according to the developer’s agreement.

The combination of AMI and market-rate units is similar to The Heights and Gunflint Vue apartments.

Minnesota Housing Finance Agency determines the AMI by county, which is used to establish reduced rent parameters. The agency uses wage surveys to determine the maximum annual gross income for an individual and sets housing costs at no more than 30% of that income.

Brand said the HRA also plans to use American Rescue Plan Act funding previously designated for the project to cover upfront development costs. Those funds must be spent by the end of this year.

Wakefield said adding another apartment and workforce housing project to Grand Marais is directly connected to the county’s economic development goals.

“If you’re trying to add new jobs, create new businesses, spin up new workplaces, you need people to staff and work and to be here and present,” Wakefield said. “And it’s very difficult to do that if you don’t have workforce housing units available.”

Wakefield said with the development of the Gunflint Vue and The Heights in the past couple of years, the city and broader Cook County have made “really good strides in that direction.”

Kalli Hawkins August 21, 2026