Six degrees of separation

Dear True,

For those of you unfamiliar with Six Degrees of Separation, the theory runs that we are all connected to everyone else on the planet by six degrees of separation, i.e. I know a woman who knows a man who knows another man who knows a woman who knows a man who knows a woman who knows me.

Nowhere is this more in evidence than the Grand Marais City Council.

Mark Sandbo, Mayor of Grand Marais, was the manager of the former East Bay Hotel. One fine day, Mr. Sandbo, in his leadership capacity as Mayor, along with the City Council of Grand Marais, illegally changed the city zoning regulations, specifically the change of the definition of hotel. What made this act illegal was the omission of a public hearing on the subject, an omission which was claimed later to be an "oversight." The Grand Marais City Council knew from long standing that a public hearing was mandatory. While all of this was going on, the East Bay Hotel was engaged in a purchase offer from a Twin Cities development group called The Gunflint Gals that intended to condo-ize the hotel under the extremely wobbly mandate that the condos be used solely as vacation rentals with an owner occupation limit of 30 days. Mr. Sandbo, against the advice of the City Attorney who cited a clear conflict of interest, championed this zoning change and voted for it. The matter is now apparently under investigation by the Minnesota State Auditor.

This zoning change paved the way for another Minnesota developer to construct the Cobblestone Condominiums on prime harbor property owned in part by Mr. Barney Peet, who reportedly owns the Shoreline, Best Western, and Spruce Glen Motels in Grand Marais. Mr. Peet's Shoreline Hotel property is managed by Richard Franta. While a manager for Mr. Peet, Mr. Franta sat on the Planning and Zoning Commission at the time the Cobblestone Condos were proposed, and there is no indication that he recused himself from the vote on this project.

Mr. Peet allegedly sold his share of the harbor land for an apparent equity position in the condo development, and his organization reportedly has an agreement to manage Cobblestone's rentals, leases, or sales. Mr. Sandbo, no longer employed by East Bay Hotel because of its fortuitous sale to East Bay Condominiums, promptly moved on to work for Mr. Peet. Both Mr. Sandbo and Mr. Franta reportedly continue to serve in management positions for Mr. Peet and allegedly are directly active in managing the Cobblestone Cove property.

Mayor Sandbo just got his real estate license to enable him to sell and lease condos, as well as other properties. Usually when you sell something as a real estate agent, you're paid a commission. Mr. Sanbo's license is held under a real estate broker. That broker is Gunflint Realty. Another Gunflint Realty agent and part owner is Tim Kennedy, a downtown property owner, who sits on the Grand Marais City Council, the EDA Board, and the Planning and Zoning Commission.

Right now, Mr. Kennedy has a developer client who is looking for land for the new Homeland Security Building. The EDA is trying to interest Homeland Security in the small business park it is developing. Mr. Kennedy's client may or may not be interested in the EDA park, but either way, if the developer gets the job, Mr. Kennedy and Gunflint Realty will most certainly get a commission. In addition, Mr. Kennedy allegedly knew of, yet did not divulge, the Homeland Security building project long before Matt Geretschlager of the EDA office did and, if you believe the Mayor, long before the Mayor or the rest of the City Council knew. (I do think that most of the Council, like Kay Costello and possibly Ed Bolstad, were kept in the dark.) Apparently, the City Attorney, Don Davison, fit the pieces together after a lengthy Internet search.

In real estate there is the concept of "dual agency" wherein the real estate agent can represent both the buyer and the seller if each understands that is what the agent is doing and if both give written consent. Mr. Kennedy would have to prove he has the written consent for his dual agency with the EDA and his developer. To date he has not done so, therefore he represents the buyer and is in a clear conflict of interest with his position on the EDA Board.

To recap: Mayor Mark Sandbo and Councilman Tim Kennedy are both real estate agents in the same company, Gunflint Realty, of which Mr. Kennedy is part owner, and they are both in positions to manipulate the development of Grand Marais and to profit by their insider knowledge. One real estate company in Grand Marais has two Realtors voting on the City Council.

A decade ago there was a movement afoot to sell the Recreational Park (which brings in a sizable income to the City of Grand Marais) so it could be turned into a massive vacation resort in this prime location on the entire west side of the harbor. This did not go through because certain enlightened citizens managed to have the area protected by a conservation easement in partnership with the Minnesota Land Trust. This area is a mecca for all who enjoy and use the harbor as well as a sanctuary for the 19 species of shorebirds that use the harbor. Now the Mayor and some of the Council are striving diligently to build a huge marina in front of the same proposed development area. Mayor Sandbo has been heard to refer to the mega-marina as "my marina." I believe the exact quote was "I'm going to get my marina."

One tactic that might be employed to build the big marina would be to persuade the DNR to break the conservation easement which presently protects the recreation park from development. Neither the Mayor or the DNR have disavowed the use of this tactic. This could once again mean that the entire harbor area would be subject to condo development.

We now have two Realtors on the City Council who seem to have a history of using their position to serve their interests and those of their employers and/or clients over and above the interests of the city itself and the people who elected them. While most of the Realtors in Grand Marais are, no doubt, scrupulously honest, one has to question the motivations of those serving either on the City Council, the Planning and Zoning Commission, or the EDA who have so far shown a cavalier attitude to their positions of public trust.

And you, dear voters, are you starting to connect the dots?

Signed,
Eyes Wide Open