Feds to County: Sell the Lodge

File Photo Under terms of the agreement with Rural Development, all the proceeds from the sale of the Keweenaw Mountain Lodge will go to federal creditors, and Keweenaw County’s debt will be forgiven.

EAGLE RIVER — Keweenaw County, the United States Department of Agriculture Rural Development and the Economic Development Agency (EDA) have reached an agreement by which the Keweenaw Mountain Lodge will be listed for sale and the net proceeds of the sale will be distributed to Rural Development and the EDA. The agreement stipulates Keweenaw County will not have to pay back a $1.75 million Economic Development (EDA) grant if the KML is sold.

The EDA advised the Keweenaw County Board that if the KML was sold prior to the expiration of the 20-year commitment period applicable to the 2007 grant, federal law requires the county to pay the portion of the KML sale proceeds equivalent to EDA participation in the project.

The 20-year commitment period acceptable to the 2007 grant has not expired, according to the EDA. However, the agreement between Keweenaw County and Rural Development will be modified to provide that Rural Development will receive 50.83 percent of the net proceeds of the KML sale, and the EDA will receive 49.17 percent of the net proceeds of the KML sale.

“The sale of KML and cancellation of the Rural Development debt,” the Keweenaw County 2016 Deficit Elimination Plan states, will eliminate the deficit which currently exists in the Keweenaw Mountain Lodge fund’s unrestricted net position by eliminating the Keweenaw Mountain Lodge fund in its entirety.”

Details of the sale and disbursement of the proceeds of the sale of the lodge were finalized during the telephone conference between representatives of the Economic Development Administration (EDA) and Keweenaw County on July 7, and were discussed at a special meeting of the County Board which took place Thursday evening at the Keweenaw County Courthouse.

The elimination plan goes on to state that the sale of the KML pursuant to the agreement with Rural Development and the EDA is “the best deficit-elimination plan Keweenaw County can propose at this time.”

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