Hauschild says state relief will save Two Harbors, Lake County on Highway 61

Highway 61 is still set to be torn up in Two Harbors, but the state is taking a bigger share of the bill before crews ever break ground. Sen. Grant Hauschild said policies approved in the 2025 legislative session will save Two Harbors $808,500 and Lake County $730,000 on the corridor project, a combined reduction of about $1.54 million for local governments that had been facing a major infrastructure cost on the city’s main commercial spine.

That matters here because Highway 61 is more than a state route. It carries school traffic, downtown access, deliveries, and the north-south flow of residents and visitors through the center of Two Harbors. Every dollar shifted away from city and county taxpayers changes how much pressure local leaders face on property taxes and how much room they have to fund other needs while the corridor is rebuilt.

MnDOT says the Two Harbors corridor project has been in development since 2018 and is now in final design. The current plan calls for some utility work in 2026, full construction in 2027 and 2028, and traffic detours during construction. The final design includes roundabouts at Highway 61 and 7th Avenue and at Highway 61 and 11th Street, a separated multi-use trail from Scenic Drive into town, protected pedestrian crossing refuges, sidewalk improvements, and trail connections to the Gitchi Gami Trail.

The state relief does not change that work scope. The highway still moves ahead on the same basic timeline, with the heaviest disruption ahead in the next two construction seasons. What changes is who pays more of the cost. The 2025 transportation bill included a new local government funding gap assistance account, and a University of Minnesota policy summary said the legislation also changed cost participation policy for roadway funding, signaling a broader shift in how Minnesota shares the burden on large projects like this one.

Local officials and business owners have already been planning around the rebuild. At a Sept. 23, 2025 business meeting, MnDOT laid out a three-year phase schedule with the outer sections starting in 2027, the middle stretch between 11th Street and 4th Street in 2028, and landscaping and finishing work in 2029. Lake County Chamber of Commerce President Janelle Jones said the project would affect businesses but that the payoff would be worth it, and chamber leaders discussed ways to keep locals and visitors coming through the corridor during construction.

For Two Harbors and Lake County, the practical question is not whether Highway 61 changes. It is how much of the financial load lands locally while the city waits through detours, traffic shifts, and a rebuilt downtown corridor that will shape commerce on the North Shore for years.