Two Harbors Weighs $17 Million Apartment Project Amid DNR Waterfront Dispute

Two Harbors Mayor Lew Conner has a concrete example of what a housing shortage costs a small city: "We've lost school teachers. We actually lost somebody offered a position at the city because there was not a place for them to live."

That shortage is now driving a push to approve North Shore Flats, a $17 million, 75-unit apartment project proposed by Vision Incorporated, a Superior-based developer that recently completed the Gunflint Vue Apartments in Grand Marais. The company has committed $15 million of the total project cost and is seeking tax abatements from the City of Two Harbors, Lake County, and the local school board to close the financing gap.

The project would rise on a five-acre parcel near the corner of Omtvedt Boulevard and 15th Street. Most units would be offered at market rate, with a small percentage set aside for affordable housing. Supporters also argue the development could prompt seniors to downsize, freeing up existing single-family homes for younger workers and families.

Two public funding sources are already committed: the Iron Range Resources and Rehabilitation Board has awarded an $850,000 grant, and the Lake County Housing Trust Fund is contributing $1 million. But Lake County Housing and Redevelopment Authority Director Matthew Johnson says the tax abatements are non-negotiable for the project's survival.

"Without the tax abatements, this project wouldn't happen. But second and maybe most importantly to some of the local stakeholders is that without it, the rents would be that much higher," Johnson said.

Johnson described the housing shortage as a community-wide concern, not simply a municipal one: "That's been echoed from the chamber, from the medical facility, from the school district, from the city, the county, and employers small and large."

The city, county, and school district will each hold public hearings before voting on the abatement requests. No hearing dates have been publicly announced.

North Shore Flats is not the only housing-adjacent issue before Two Harbors officials. On March 10, city leaders debated the project alongside a separate conflict with the Minnesota Department of Natural Resources over a waterfront commercial development ban. The Lake County Press reported that a height proposal for North Shore Flats was advancing even as the city pressed the DNR on the ban, though the specific height and details of the city's position toward the DNR were not available from the publicly accessible portions of that reporting.

The outcome of both the tax abatement process and the DNR dispute will shape what, if anything, gets built on that five-acre lot near Omtvedt and 15th.