IRRRB retrenches, but where’s the vision?

A full $500,000 in cuts come from Ironworld Discovery Center in Chisholm, the state agency’s entertainment and history attraction, a chronic money loser.

Even with the cuts, Ironworld is expected to lose $1.6 million this fiscal year.

The budget crisis is the result of reduced taconite production tax receipts after the 2001 closure of LTV Steel Mining and nonpayment of the tax this year by National Steel Pellet Co. The Keewatin taconite plant and its parent, National Steel Corp., filed for Chapter 11 bankruptcy protection from creditors in March.

Commissioner John Swift tried unsuccessfully to use the fiscal 2003 budget to start moving Ironworld and the agency’s other business — Giants Ridge Golf & Ski Resort — toward private ownership.

Converting Ironworld to private nonprofit ownership would position it for possible operating grants from philanthropic endowments, he said.

“I want Ironworld to survive. But it’s a lot easier to raise money as a 501(c)3. As long as the state owns it, (endowments) won’t participate,” he said.

Meanwhile, losses at Giants Ridge are expected to double this year to $2.1 million. The red ink reflects a soft economy that’s discouraging business and leisure travel, and an additional $1 million in annual debt service related to a second 18-hole golf course under construction at the resort near Biwabik.

Swift wants to market Giants Ridge for sale to the for-profit sector, to stem losses and concentrate on the mandate that created the agency 50 years ago: economic development.

“Operating them is at odds with the mission of the agency,” he said. “There’s not as much pain in this budget as I had proposed,” he said after the meeting.

Swift and the board may have missed their best opening for selling Giants Ridge when golf was booming and Legends, its first 18-hole course that opened in 1997, was turning business away.

Now there’s concern that the nation’s voracious appetite for golf has been sated, even as new courses are under way, including tribal projects near Cloquet and Tower.

Some board members were dismayed when they first learned on June 25 how it all will translate to the bottom line at Giants Ridge over the next 12 months.

They expressed dismay that projections of future golf revenues which they used to decide to build a second course two years ago, were so flawed.

When Sandy Layman, the board’s Republican citizen appointee, registered her concern, Democratic Sen. Douglas Johnson couldn’t resist a partisan jab.

“As a good Republican, you should have been suspicious when the private sector showed no interest in building the (second) golf course,” he said.

Layman isn’t amused.

“Staff forecast the second course at the very least to be (net) income neutral,” she said in a later interview.

“Now we find out we’re going to be subsidizing Giants Ridge by $700,000 to $800,000 for the next five or six years,” she said.

Despite the Giants Ridge surprise, most board members give Swift high marks for his even-handed steering of an agency steeped in partisan Range politics through a difficult transition.

Its budget committee chairman and most openly partisan member, Rep. Tom Rukavena, DFL-Virginia, criticized the Ironworld cuts as too deep. But he also said Swift did everything possible to minimize the impact.

As an appointee of Gov. Jesse Ventura, Swift is the agency’s first Independent commissioner, and one of many transplants in the Range business community.

A former St. Cloud banker, he came to the Range and bought a resort on Lake Vermilion, which he still owns.

Layman, president of the Itasca Development Corp., in Grand Rapids, is one of three citizen members added to the agency’s board in 1999 in a compromise struck after House Speaker Steve Sviggum, a Republican, introduced legislation to end majority control by Range legislators. She said Swift has a clear vision, but hasn’t moved that DFL majority far from its view of the agency as a public sector jobs program.

“I came into a dysfunctional organization,” she said. “He’s done an excellent job of helping the board operate more cohesively. He understands the agency is going to be smaller, and that it needs to move away from programs like Ironworld and Giants Ridge. He sees a future that’s different, but I don’t think he’s been successful in leading the board through a visioning process,” she said.

With Ventura deciding in late June not to run for re-election, Swift has become a lame duck as well.

Layman said the timing couldn’t be worse for the agency, even though a Republican or Independent governor, if elected, might decide to reappoint him.

“The election is a very big deal,” Layman said. “The board is still at odds over the kinds of jobs we should be producing.”

Swift, 62, said his job isn’t done. He can rattle off a lengthy list of projects underway that can help strengthen and diversify the Iron Range economy. Among them is the iron nugget demonstration project at Cleveland-Cliffs’ Northshore Mining unit that promises the first Range-produced iron product for mini-mills, the only part of the domestic steel industry that’s growing.

Swift has telegraphed to legislators that he wants to stay on. But he won’t actively lobby to keep the job, he said.

The earliest new appointment by a new governor elected in November likely would come within 90 days, he said.