City challenges owner to ‘step up’

Miner’s Inc. is planning a new 55,000- to 60,000-square-foot Super One Foods facing East Second Street.

In fact, the Hermantown-based company had hoped to have the new store in the ground about 1½ years ago, after 27 of 28 property owners sold homes and a business to make way for a project that many see as a boon for Superior and the East End Business District.

The problem is a single homeowner has refused to sell his 1,248-square-foot house on a little more than a quarter-acre of property in the center of more than five acres of land amassed by Miner’s Inc. in the 2200 block of East Second, Third and Fourth streets.

“For an ideal Super One store, the house would be right at our front door,” said Bruce Anderson, general counsel for Miner’s Inc.

That’s left a $10 million to $11 million investment in the East End Business District in limbo as Michael Stranko, owner of the house, holds onto a home built in 1979, a house with a fair market value of $117,900 according to tax records.

Stranko declined to comment on his decision to retain ownership of his home.

Now city officials say enough already.

Next week, city officials plan to ask the council to consider moving ahead to vacate alleys and streets for the project by referring the matter to the city’s Plan Commission. Hagen said the city will have to maintain access to Stranko’s property, although “he may not like it.”

If approved by the council, Port and Planning Director Jason Serck said the Plan Commission would consider the matter during its Sept. 19 meeting.

Hagen said the city hasn’t ruled out eminent domain after numerous offers — including “significant dollars” above the value of the house — have been rejected.

While company officials didn’t cite specific numbers, Anderson said the offer was sufficient that Stranko would never have to worry about a mortgage to buy a new home, which the company is willing to buy if he didn’t like it.

“The bottom line is we’re going to do all we can to make this happen,” Hagen said. “We’re leaving all our options open and we have legal counsel at several levels looking at those possibilities. He has been treated extremely fair.”

Company officials, however, say they would like to resolve the issue amicably, and if anyone has ideas on how to present an acceptable offer, they would be glad to hear it.

“The offer we put on the table is still out there,” Anderson said, an offer for assistance that “beyond the norm” in an effort to resolve the issue.

“We’ve been part of this community for over 30 years, and we’ve reinvested in it a number of times,” said Greg Borash, chief financial officer for Miner’s. “We’re very happy here. We think the community is happy with us as partners. We’ve tried to be real honorable and respectful with how we’re dealing with this. We don’t think it’s been respectful back.”

In addition to offers made by the company, the city is offering $25,000 for relocation assistance — an offer that will be pulled off the table at the end of business Sept. 7, Hagen said.

Serck said the city has offered land to move the house to another area of East End.

After all, Hagen recognizes that Stranko is committed to East End where he grew up, lived and worked.

“In essence, we’re buying his house, but he can take the house with him,” Borash said. He said after three years, the company still doesn’t know what Stranko’s concerns are or how to put together an acceptable offer.

And the company only proceeded with purchasing homes and motel in the area because they heard from neighbors that Stranko would sell the property, Anderson said.

“This has been going on a long time,” Hagen said. “The Miners’ have a lot of interest in this, and we do too. The city believes that beyond the construction, this would be key to total revitalization of that business district.”

He said an estimated 12,000 vehicles a week are projected to stop at the new store and another 4,000 vehicles would likely stop at the out lots on the property once developed.

“We’re to the point of being disappointed to being outraged,” Hagen said. “The community is disappointed.” And the 110 people needed to run the store and opportunity for growth are on hold, he said.

It’s disappointment shared by business owners in East End. While some say they have lost business because a motel and 26 homes are gone from the neighborhood, they agree Super One facing East Second Street would draw new customers into the business district, which would benefit everyone.

Esther Schaefer, owner of the East End Café, said she’s seen a decline in business with the loss of homes in the neighborhood, but she remains hopeful the grocery store will be built.

“People would be coming in, instead of going to Duluth or downtown; they would stay here because it would be a bigger store,” she said.

Located off East Second Street, the company hopes to achieve what it has in Two Harbors, where the store on Highway 61 has expanded twice because it gives tourists traveling through the area a reason to stop.

John Krenke who works in development for Miner’s Inc. said the new location would be a convenient draw for all those recreational vehicles driving through town to stop and get groceries. The store location on East Fifth Street doesn’t provide that opportunity because it’s not readily visible from U.S. Highways 2/53, he said.

Roger Lundquist, owner of East End Hardware Hank, said he hasn’t seen a change in his customer base, but agrees drawing those additional customers into the business district would present an opportunity for growth for surrounding businesses.

“It’s nothing but positive,” Lundquist said of the proposed development. “When that much traffic comes into the area, we can certainly see growth in this business district.”

Sara Haugen, owner of Pudge’s, would like to see the sale go through. After all, the company has been a good community partner in East End and she said the location would be a boon for Superior.

“They go above and beyond to help this community,” Haugen said. She said with the amount of money the company is offering to pay for the property, Stranko should just “take one for the team and leave.”

“Super One would do so much for this area and he’s just dragging it down, and it’s wrong,” Haugen said.

In addition to serving a neighborhood where many don’t drive and store personnel retrieve carts from the surrounding neighborhood, she said it would also create a draw in Superior for people traveling to the North Shore or Iron River.

“If Mr. Stranko would just leave the area, (Super One) would add so much for the Northland,” Haugen said. “I realize he doesn’t like change, but like I said ‘take one for the team.’”

Hagen sees the proposed store as a great opportunity for the city, which is why he’s had a number of conversations with Stranko in an effort to encourage the sale to Miner’s, but none have gone beyond “pleasantries.”

“Having grown up in East End and spending my boyhood days in the business district, I firmly believe that will be good for that business district and growth,” Hagen said. “I’ve known Mike my whole life and I feel the community has been exceptionally good to him — 30-year career in the fire department. Now it’s time for him to step up. We’re going to do all we can to make this happen.”

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