Rice Lake, Minnesota’s newest city, is poised to expand its commercial sector in a big way.
Not to be confused with Rice Lake, Wis., located two hours south of Superior, Rice Lake, Minn., is located on the northern border of Duluth along the busy Rice Lake Road corridor, also known as Highway 4. The city’s commercial heart is at the intersection of Rice Lake and Martin roads, anchored for decades by the Sunset Lounge and, more recently, by a Kwik Trip convenience store and Great Lakes Stone Supply.
“Right now, we’re basically a bedroom community, with the tax base that is household centric. We want to shift that a little to take some of the tax burden off households. So we’re trying to pursue more commercial development,” said Mayor John Werner. The city also has plans for light industrial, apartments and assisted living developments.
The city has many factors working in its favor, Werner said, including large greenfield parcels, several tax advantages and elected officials who welcome business development.
“We’re presently working with the county on a corridor plan. We hope to have something developed by next winter,” he explained about Highway 4, which connects Duluth with Aurora and other East Range communities.
Although Rice Lake is new as a city, it’s as old as Duluth.
“Rice Lake has had a governmental body since 1873,” Werner said proudly. But until 2015, it was incorporated as a township. That designation changed when Duluth officials proposed to annex Rice Lake, which preferred to remain independent. The municipalities struck a deal. Rice Lake remains the sixth largest governed body in St. Louis County, but as a city rather than a township.
The word “city” is more than just a term suggesting a municipality is probably larger than a “town.” The designation is only granted when the community meets certain requirements, such as zoning and municipal services. With the designation come some advantages, such as access to state funds that can be used to develop the city. They include capital to extend existing piped utilities (water, sewer and gas) that Werner and private developers would like to lengthen beyond the current terminus at Martin and Rice Lake roads. Those utilities were key to securing the recent Kwik Trip development. Fueled by Gnesen, Woodland, Fredenberg and Canosia residents commuting to Downtown Duluth, along with workers driving to and from the huge AAR maintenance base, the busy store immediately sparked interest in further development. Rice Lake Investments LLC is among them. The firm purchased 22 acres adjacent to Kwik Trip that partners Andy Sill and Darrel Johnson are currently marketing. The land is located on the east side of Rice Lake Road.
“Once water and sewer was extended to Martin Road, it made these properties attractive,” said Johnson, a longtime Rice Lake resident.
“We were waiting for the Kwik Trip to take off. Now that it’s spring, there should be strong interest,” Sill added.
And the interest is growing. Four residential properties on the west side of Rice Lake Road are being listed for commercial development by Coldwell Banker/East West Realty.
“We’ll start with these 22 acres and I suspect it will go pretty quickly. There are 12,000 vehicles a day driving through this intersection. And we’d like to do more with the city of Rice Lake,” Sill said.
Currently, the partners are planning an assisted living development on Martin Road. Work could start in one or two months. In conjunction with that plan, Johnson hopes a pharmacy can be recruited to a nearby parcel. They believe the new city has much to offer business and residential developers.
City Clerk-Treasurer Toni Blomdahl said building permits can be issued within two weeks.
“It’s a very streamlined process. We all sit down and work together,” she said.
Along with other factors, that’s what developers are looking for, Werner noted.
“There are no city sales taxes, no tourism taxes, and we’re also not subject to the earned sick and safe time ordinance or impervious surface fee. Financially, it’s quite advantageous to locate your business here and still be close to town, close to the airport,” Sill said.
“Rice Lake is much more business friendly. Even in housing rentals, we don’t have all the inspections and rental fees they have in Duluth. It’s easier to work with. When you come out here, you get the country feel but you’re still close to everything,” Johnson said.
Werner said the city also hopes to develop a light industrial park northwest of the key intersection on a large tract of county land.
“It’s dependent on interest. A state program (through the Department of Employment and Economic Development) would fund water and sewer. There are a lot of different mechanisms to advance different projects,” he explained.
There’s no illusion about overtaking Duluth in terms of development, nor is there a desire to become a metropolis.
“We don’t want to expand to the point that Hermantown has, and we don’t want businesses in the neighborhoods. But we do want to have a commercial corridor along Rice Lake Road,” Werner said, adding, “There’s certainly a lot of property around there that’s available, and there has been a growing amount of interest.”