01-0685R

RESOLUTION AUTHORIZING THE ACQUISITION OF LAND FOR AN ADDITION TO SPIRIT MOUNTAIN RECREATION AREA AUTHORITY, AUTHORIZING SETTLEMENT OF COMPLIANCE ISSUES WITH MINNESOTA DEPARTMENT OF NATURAL RESOURCES, AUTHORIZING EXECUTION OF A CONTRACT WITH SPIRIT MOUNTAIN RECREATION AREA AUTHORITY AND HOVLAND SPIRIT RIDGE, LLC.

BY COUNCILOR HOGG:

        BE IT RESOLVED, that the proper city officials are authorized to execute and implement a contract, in substantially the same form and having the terms and conditions as set out in the contract on file with the clerk as Public Document No. ____, between city of Duluth, Spirit Mountain recreation area authority, Hovland Spirit Ridge, LLC, and any other party required to join in the transfer of land which is a subject of the contract.

        BE IT FURTHER RESOLVED, that the proper city officials are authorized to negotiate with Minnesota department of natural resources and national park service in order to settle outstanding issues of whether land use at Spirit Mountain recreation area is in compliance with Public Law 88-578, as amended, and in such negotiations they may use the provisions of the contract authorized by the resolution.

        BE IT FURTHER RESOLVED, that the proper city officials are authorized to do acts necessary to make the newly acquired land under the control of, or a part of, Spirit Mountain recreation area, including the execution of contracts, transfer documents, and a request for legislative action.



STATEMENT OF PURPOSE:  In 1965, Congress passed Public Law 88-578, the land and water conservation fund program. The program is administered by Minnesota department of natural resources pursuant to an agreement with national park service.

When Spirit Mountain recreation area was created, four grants were given under the LWCF for development of the area. Minnesota DNR considers the city of Duluth to be responsible for compliance with the grant agreements.

Since its inception, SMRAA has planned a hotel on the premises, and for decades there have been privately-owned vacation houses on the premises.

Within the last year, Minnesota DNR has expressed concerns: SMRAA, by law, manages the area, while DNR believes that Duluth should have power to enforce grant conditions there; a land lease to a developer does not contain recitals of the grant conditions; the privately-owned homes are not an allowed public use; a time share dwelling is not an allowed public use.

City officials have met with DNR and NPS agents.

If land subject to LWCF grant conditions is converted to public use, then the grantee must replace it with other land. The replacement must be newly acquired land that is of equal or greater value than the converted land, and, also, of equal or greater recreational value.

The DNR contentions put the city in a difficult position. SMRAA has legal power to develop the land without city approval. The building owners have property rights. DNR asserts that the city must pay if development uses are not in compliance with LWCF regulations, and that existing buildings are not. The cost of replacement land is in the many tens of thousands.

Officials sought a solution. Hovland Spirit Ridge, LLC has ownership, or ability to secure ownership, of about 150 acres of undeveloped land adjoining SMRA. This land is suitable for the same outdoor recreation uses as the existing recreation area. It is currently planned to be used as a golf course. Future uses can include hiking, skiing, camping, nature, and any other outdoor use. It appears to be perfect substitute land.

The owner will transfer this land to the city for use as conversion substitute land under LWCF. The city, SMRA, and the public will receive a valuable addition to our public recreation resources.

The owner will make the transfer free of charge, but conditioned upon its ability to continue with its current project.

This resolution authorizes the city to approach DNR with a viable solution to the compliance issues without incurring the huge cost that a purchase of substitute land would require.