Ely shed proposal sparks debate over Shagawa Lake shoreline access

A proposed 288-square-foot boathouse on Sandy Point pushed Ely officials into a broader fight over who gets to shape the city’s most visible shoreline, and what kinds of development will be allowed there next.

The Ely Board of Adjustment approved the conditional use permit for 751 North Pioneer Road by a 5-0 vote, with one abstention, after roughly 30 people attended the May 20 hearing at City Hall council chambers. The application came from KK & PI, LLC, submitted by Kelly Klun and Tanner Spawn, and city paperwork described the project as a 12-by-24-foot prefabricated utility building from Old Hickory Buildings to be used as a private boathouse and watercraft-storage structure for registered guests only.

City documents show the hearing notice was dated May 1, 2026, and nearby property owners within 350 feet were notified. The packet says the structure would sit at least 10 feet back from the original high-water mark and would be placed in the Residential R1 district, where boathouses are allowed only by conditional use permit under Shoreland Ordinance 11.42, Subdivision 2(D). The city’s May 20 planning and zoning agenda also listed the 751 N. Pioneer Road shoreland permit as old business, placing the proposal squarely in a larger local discussion about Sandy Point and Shagawa Lake.

That larger debate is what drew the crowd. Opponents argued the shed-like structure could be the first step toward more intensive shoreline development on Sandy Point, a place many residents view as ecologically sensitive and historically important. Others warned that incremental changes could chip away at wildlife habitat and alter the character of one of Ely’s most prominent lakefront areas. Several speakers also raised cultural concerns, referencing possible Ojibwe burial or other cultural significance and urging the board to proceed carefully before allowing construction.

Those concerns intersect with state law. The Minnesota Office of the State Archaeologist says unrecorded burial grounds that are at least 50 years old are protected under the Private Cemeteries Act, that only the state archaeologist can authenticate an unrecorded burial or burial ground, and that willful disturbance of a burial ground is a felony. For some in the room, that made the hearing about more than a storage shed. It became a test of how aggressively Ely will protect shoreline, cultural sites and public trust as pressure builds around Shagawa Lake.

The proposal also carried a governance wrinkle. Kelly Klun, Ely’s contracted attorney, is a member of the applicant LLC, though the clerk-treasurer said she would take no role in the matter. That detail sharpened concerns about conflict and accountability as the board weighed a decision that may now serve as a precedent for future lakefront development fights in Ely and across St. Louis County.