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Pawlenty announces deal on Lake Vermilion state park

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Lake Vermilion
Lake Vermilion, near the Boundary Waters in northeastern Minnesota.
MPR photo/Tom Weber

Gov. Tim Pawlenty announced Friday that the state has reached an agreement with U.S. Steel to acquire land for a state park at Lake Vermilion in northern Minnesota.

It's a deal that's been bantered about for almost three years. The plan ran aground last year when the state and owner U.S. Steel couldn't agree on a price. 

If things fall into place this time, U.S. Steel gives up a high-end waterfront housing development it planned for the site and it tosses in $2 million worth of property as a donation to the state.

Gov. Pawlenty proposes what he calls a "next generation park" on Lake Vermilion's shore.

"It would be a wonderful thing for the state," Pawlenty said.

The Governor and the steel company have settled on a cash price of $18 million for about 3,000 undeveloped acres.  It includes 5 miles of waterfront, wetlands, and hard- and soft-wood forests.   Pawlenty said it can provide public access to a premier lake and the outdoors for Minnesotans.

"So this will provide an up-north, at-the-lake experience at world class-quality levels in ways that are accessible and affordable for everybody for many, many generations to come," Pawlenty said.

But it's far from a done deal.   The $18 million price is more than the land's value according to a state appraisal.  The state can't pay more than a certain percentage above the appraised value under current law. 

So, the Legislature needs to lift that cap for the deal to proceed.  But the chair of a key legislative committee said she isn't interested in doing that.

The plan has some supporters.

"While each of our state's 72 state parks represent their own legacy, there is no doubt that future generations will look back with gratitude on the day that our elected officials had the vision and determination to create what may become the crown jewel of our state park system," Brett Feldman, acting executive director of the Parks & Trails Council of Minnesota, said in a written statement.

But reaction was more subdued from lawmakers representing the park's St. Louis County home base.  The housing development planned there instead would have provided lucrative property tax revenue for a county that, like so many others, is struggling to pay for services.  

The state would provide payments in compensation, but skeptics say the funding may not survive the state's deep budget problems.

The St. Louis County Commission has already zoned the housing development, which is expected to result in 63 lakeshore homes and another 82 inland.

St. Louis County Commissioner Mike Forsman of Ely said he likes the park idea, but never expects to see it completed because the state can't afford to do it.

"The proposed Pawlenty paradise park that he wants to have is something that would be desirable if it was built the way it was proposed to be built," Forsman said.

DFL Rep. David Dill of Orr questions the state's predictions the proposed park would attract 100,000 visitors a year.

"I've been down this road before with parks in both the case of the federal government and the state government where the promises weren't fulfilled, so I guess I'm cautiously awaiting to see what the details are," Forsman said.

DFL Rep. Tom Rukavina of Virginia asks where the money will come from to improve a property changing hands from private owners to the state.

"We are the third largest land owner in the United States of America, and we have a lot of property off the tax rolls up here, and our schools need funding, and our county needs funding," Rukavina said.  "Those funding sources have been cut."

DNR officials said in an afternoon press conference with the legislature's approval, some public access could be in place by 2012; but that development of infrastructure like roads, water, and a visitor center will cost $25 million to 30 million.

Gov. Pawlenty was blunt about what happens if the legislature balks.

"The representatives from U.S. Steel made it very clear that if we can't get this transaction consummated they're going to begin developing the property this summer," Pawlenty said. "So, if we don't get this done this spring, you'll see bulldozers and the beginning of a residential housing project be developed on that land."

And that would really put an end to a three-year effort to create Minnesota's newest state park.