Little Snow and Warm Temperatures Having Huge Impact on Local Economy

The lack of snow and unseasonably warm temperatures are hurting almost every business in the Arrowhead Region this winter.

According to Susan Butler Rian, the owner of the Trestle Inn in Finland, “This is the worst winter I can remember.” Rian has owned and operated the Trestle Inn for almost 25 years. 

Even as summer and fall traffic grows for the historic Trestle Inn, Rian says snowmobile season has always been a big part of her business and is almost non-existent this winter.

Trestle Inn was scheduled to be the terminus of the John Beargrease 120 last month. The cancellation of the Beargrease, along with the Gunflint Mail Run, meant further declines in customers. 

“Fortunately, we have wonderful local people to keep our boat afloat,” Rian said. She also reports that her usual staff of five people has been reduced to three and that they have reduced hours of operation. “It’s not smart to be open some days,” she said. 

Loggers in the area were sidelined when sustained temperatures above freezing turned the frozen ground to mud, making moving the heavy equipment in the woods impossible.

Tone Coughlin operates Endurance Kennels near Island Lake in rural St. Louis County. A dog handler for over 30 years, he added guided dog sled tours to his portfolio a decade ago. 

“Our main market for the rides is the Twin Cities,” Coughlin said. “And our busiest time is the two weeks of Christmas and New Year breaks for school kids,” he said. This season, trail conditions made rides impossible. 

Although the loss of tours hurts, Coughlin is also an independent marketing and promotions professional specializing in web design. He also trains sleddogs. Still, the cancellation of the Beargrease and other races add more stress to his business. Even the Copper Dog races on the Keweenaw Penisula, which usually gets three to four times the Arrowhead's snowfall, were canceled recently due to lack of snow.

Coughlin estimates a 70-75% loss of revenue this year so far. 

Businesses up the Gunflint Trail are also stressed, especially those depending on a robust snowmobile turnout. 

Bearskin Lodge and Golden Eagle Lodge have not been hit as hard, thanks to their investment and hard work in maintaining cross-country ski trails. While not at ideal levels, there is enough snow on the Gunflint for skiing. Both lodges report better occupancy levels than most. 

“We do have snow, and we do have skiing, although far less than we usually have,” said Sue McCloughan, one of the owners of Bearskin. “It’s basically the only natural snow cross-country skiing in Minnesota now, so people are happy to get whatever skiing they can find.”

Bearskin enjoys having a 90% rate of returning guests, many whom have come this year because it is an annual winter tradition. “Everyone is coming from 50° weather and no snow, even green grass, so this is a taste of winter,” McCloughan said.

In the spirit of cooperation that is a hallmark of the Gunflint Trail, McCloughan said Bearskin makes an effort to promote other businesses like Trail Center and Hungry Jack to their guests. “We send out a newsletter and a welcome letter encouraging both those options for dining in hopes of spreading our good fortune to other Trail businesses,” McCloughan said.

While some businesses are laying off people to cope with the downturn, Bearskin is not. “We will keep our staff no matter what happens because they are the most amazing employees we’ve had in many years,” McCloughan said. “But if winter disappears, we will have to get creative to find work to keep them busy.  But we are optimistic that snow is coming now.”

Java Moose is a popular coffee shop in Grand Marais with a finger on the pulse of its customer base. “Foot traffic in our store is down this winter about 10%,” said Sarah Jorgenson, matriarch of the family-owned business. 

80% of employment in Cook County is related to tourism, and some reports indicate that lodging rates are down 30-40%. “We’re all impacted so much by the lack of snow,” Jorgenson said. 

After almost 30 years in business, Jorgenson is optimistic about getting through this season and moving on to a more prosperous year. 

“We’re gonna make it because we’re (all local businesses) in it together,” she said. Adding, “Collaboration shines through here, and I love that.”

Other businesses are hurting from the downturn in Lake and Cook County. 

Food and beverage suppliers are seeing smaller orders. 

Hardware stores aren’t selling as many snow shovels, roof rakes, or snowblowers.

Businesses that perform snow removal services, many of them one or two truck operators, haven’t seen much activity so far, especially compared with previous years that saw snowfall totals of more than 10 feet.

Andrew Smith is a mechanic with Jed Smith Excavating & Septic, LLC in Grand Marais. He repairs and maintains the trucks and other equipment the family-owned business has used for years to build septic systems and excavate foundations. 

In the winters, he and his brother Jed operate a snow plowing business working under contracts with road associations and private parties. “There hasn’t been much plowing this year,” Smith said. 

In addition to basic plowing, the brothers also remove snow to widen roads, driveways, and parking areas for other contractors. “Each of us average 40-80 hours per season doing snow blowing,” Smith said. “We’ve done none of that this year.”

Despite the loss of revenue, there is a bright side. “Jed’s building a garage to keep our equipment indoors,” Smith said. “And I’m able to make sure all our equipment is ready to go when the season begins.”

As Java Moose’s Jorgenson and Bearskin’s McCloughan point out, collaboration will help businesses in the Arrowhead get through this unusual and devastating winter. The local folks who help Trestle Inn’s Rian and all the others “keep the boat afloat” are also collaborating. 

But there is much to be done.

Minnesota State Senator for District 3, Grant Hauschild (DFL), said that he’s been “brainstorming” ways that his office and the legislature might be able to assist businesses that have been hit hard by a disappointing winter. Because it is not a budget year, the state must find other ways to bring financial relief.

“The IRRRB has a good history of working with communities during economic hardship, and I’ve reached out to them to explore ideas,” Senator Hauschild said. “I’m also on the board of Explore Minnesota and have asked for its help to increase promotion of the area.”

According to Brigid Tuck, Senior Economic Impact Analyst with the University of Minnesota Extension Service, they are wrestling with the question, “How do our communities adjust when the weather forces cancellation of festivals and events.” 

Xinyi (Lisa) Qian, Director of the Tourism Center with the Extension Service, says, “No one can predict the future, but there are ways to leverage the Extension Service forecasting abilities.”

The Extension Service is a key resource and stands ready to help Lake and Cook County tourism officials. It reports that each visitor to Cook County contributes $137 daily to the local economy. Last year, well over a million people visited. 

Almost counter-intuitively, Jorgenson of Java Moose said, “This is a really good time to be a business owner in Cook County.” 

Not wringing her hands with worry, she says, “Absolutely, people are coming back. Grand Marais, Cook County, and the entire North Shore are not over.”

Call it the spirit of the Arrowhead.