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Eleven resort cabins on Potato Lake will become a PUD after the owners said recent tax valuations made it impossible to run profitably. (Sarah Smith / Enterprise)

Planned unit development 'last resort' for Sunset Lodge

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Planned unit development 'last resort' for Sunset Lodge
Park Rapids Minnesota PO Box 111 56470

A Potato Lake resort will be converted to a planned unit development after the Hubbard County Board of Commissioners gave the OK Wednesday.


Economics and taxation are issues prompting many resort owners to seek this solution, say the soon-to-be former owners of the Sunset Lodge on Potato Lake.

"It's a shame that we're putting such high taxable valuations on these resorts that they can't make money," said Hubbard County commissioner Greg Larson.

That was the case of Sunset Lodge, owned by Joel, Tom and Brad Berghuis. The resort has been in family hands 33 years, the brothers told the commission.

It is now valued at around $1.3 million. If one brother wanted to buy the two others out, he couldn't make the loan payments with the 11 cabins on the property, the Berguises told commissioners.

Greg Grover, a real estate agent handling the proposed sale of Sunset to an entity called Ice Cracking RV Park, Inc., said a bank "laughed" at a request for financing to complete the sale between the brothers, leaving them little option but to convert it to a PUD.

"It's just not economically feasible to run it as a resort," the brothers said.

"So we're taxing it at $1.3 million but it won't support itself?" Larson asked in approving the PUD request. The conversion will allow the brothers to sell, and in turn the new owners will sell off individual units, but keep a common ground.

Attorney Mark Thomason said the conversion fulfilled the two requirements necessary - pollution reduction and not impairing the local tax base.

New septic systems will be installed that must meet residential standards, Thomason said. Those requirements are stricter than those for resorts. He also believes use of the lake will diminish, because he said permanent property owners have a tendency to use their lakes less than resort guests, who are out on the lake daily.

A common boat landing, rather than individual ones, will reduce the likelihood of aquatic invasive species spreading, said Bob Berdahl, president of the Potato Lake Association. Fewer boats owned by permanent residents lessens the chance that pollutants from other regions will come into the lake. The association supported the conversion.

"We think it's good for the lake," Berdahl said.

Grover said there will be fewer boats, motors and trailers entering the lake, "300 fewer" entries and exits per season, he added.

"If the lake could talk it would breathe a sigh of relief," Grover said.

Commissioners approved the request on a 3-1 vote with chairman Lyle Robinson absent. Don Carlson opposed the conversion because one of the cabins is in the shore impact zone and should have been removed as a condition of the conversion, he said.

The shore impact zone is the first 50 feet landward from the high water mark; Carlson said he was concerned that runoff from impervious surfaces could be detrimental to the lake.

"We have ordinances for a reason," he said. "We should follow them."

Because the cabin on the waterfront has been on the lake 50 years, and removing it might cause more environmental damage than leaving it in place, commissioners declined to make it a condition of the conversion.

The proposed buyer has an alternate site selected for the cabin if the new owners wish to move it, or it's destroyed and needs to be replaced.

Ken Grob, a Potato Lake resident and head of the Coalition of Lakes Association, supported the Planning Commission's decision to recommend the PUD.

"The planning board was acting with vision," he said.

Commissioners and proponents discussed the "vested interest" notion that permanent residents will take better care of the lake, and be better stewards of the shore land.

Environmental Services Officer Eric Buitenwerf said there are fewer than three dozen PUDs in the county at the present time.

But Larson wonders if this will be the way of the future, as more resort owners are taxed out of their livelihoods.