Economic Development Authority researching bonding options for Superior National at Lutsen golf course improvements

Following up on the resolution passed at the February meeting allowing Treasurer Scott Harrison to work with Ehlers& Associates and bond counsel Fryberger, Buchanan, Smith & Frederick on the issuance of bonds for $2,350,000 for improvements and additions to the Superior National at Lutsen golf course, Harrison reported that Ehlers had only two replies to the RFPs.

The bond rates from those firms were high, ranging from about 5½ to 6 percent, Harrison told his Cook County - Grand Marais Economic Development Authority (EDA) colleagues on Tuesday, March 11. Harrison said Ehlers suggested that the golf course seek a tax abatement bond, which would drop the rate to 2½ percent.

“In short,” Harrison said, “We’re going back to the county.”

By obtaining a tax abatement bond, Harrison said the golf course would see $1.4 million in savings over 15 years. He explained that the rate is significantly less because of the certainty. He said, “Golf course revenues are pledged to pay the bonds, but if those revenues are not sufficient, the bonds are backed by the county. Basically, taxpayers are on the hook.”

However, Harrison asserted that the golf course has covered bond payments since they were first issued in 1998. He said the cash load for the new bonds would be the same.

Harrison and bond attorney Bob Toftey appeared before the county board on March 18 to introduce the idea to the commissioners. Commissioners asked for more information such as examples of successful tax abatement bond projects, options for other collateral, and the possibility of reducing the cost of the project.