Sunday, September 14, 2014

Turmoil at Cliffs, Internet Cafe in a Bank, and a World Premiere in Marquette

THESE ARE TOUGH times for Cliffs Natural Resources but so far the local office is keeping quiet. Can't blame them. Who knows what lies ahead for them?

Here's what's been happening recently for the mining company that's long been one of Marquette County's biggest employers and most involved corporate citizens:

1) Its Duluth office, with 30 employees, is closing down. Those employees apparently are being offered jobs elsewhere.

2) Cliffs has reportedly hired Deutsche Bank to sell its coal assets in West Virginia and Alabama.

3) The company's also hired the Jefferies Group LLC to sell its Australian iron ore mines.

4) One of Cliffs' directors, Richard K. Riederer, has resigned from the board citing bullying by other board members as a reason for his departure.

5) All of this, of course, comes in the wake of the hostile takeover of the Cliffs' board by Casablanca Capital several weeks back, and the dumping of then CEO Gary Halverson.

None of these moves should come as a surprise. Casablanca, dismayed by Cliffs' dismal stock performance over the past few years, had promised major strategic changes and cuts when it seized control.

Whether those cuts will hit closer to home remains to be seen.

SOME COMPANIES SEEM to see the future and embrace it.

A great example on Third Street in Marquette. The River Valley Bank branch recently closed down for a few months to make some remarkable changes.

When they reopen in late November, here's what we'll be seeing:

An internet café and lounge inside the bank. Yeah, that's right. Free cappuccino, free Wi-Fi, free iPad access, comfy chairs, and a fireplace. Oh, the popcorn's over there.

C'mon in, even if you're not a customer of the bank. Sit down, log on, surf the web, enjoy the java, give your feet a rest, take a break from the cold.

River Valley is calling it "the bank of the future." It'll also feature individual "teller pods," rather than a long, forbidding partition between tellers and customers. The tellers and bank managers will be out in the open and mingling constantly, rather than hidden away in their offices.

This new concept is being tried out on the East and West coast at some banks, and River Valley is now putting it into practice at their Wausau, Madison and Marquette branches.

An official says the idea is to give the bank--normally a boring, staid institution--more of a Starbucks feel. Sounds pretty good, especially when the coffee, the popcorn and the iPad access are all free.

YOU MAY HAVE noticed that the Union Grill in south Marquette is up for sale.

Owners Terry and Christie Doyle have decided to pare back their business interests a bit with the awareness that they're not getting any younger. It was the same sort of reasoning that recently convinced Christine Pesola to loosen her ties to her beloved Landmark Inn.

The Doyles will, however, remain intimately involved with their primary business, the Vierling.

In fact, come November 15th, they'll undertake a major renovation of the kitchen at the Vierling and also of the underutilized front room which, to this point, has just been used for overflow, not for dining.

The Doyles plan to put a couple of TV's in the room, give it more of a hip, brew pub feel, and offer full dining, as well.

As for the Union Grill, which offers high quality food and barbeque in what's considered a fast-casual restaurant (slower but better than fast food, faster but less formal than a normal, sit-down restaurant), it'd be a shame to see it go. It's unique to this town.

The Doyles aren't rushing the sale--it's not even listed with a realtor yet.

NO WORD YET on how long it'll take the city and Duke LifePoint to iron out a contract for the relocation of Marquette General Hospital.

One official suggested that the contract itself may present more difficulties than the original Memorandum of Understanding between the two parties. Let's hope that's not the case. DLP wants to start building next spring.

And let's get ready for the complaints from motorists and residents in the neighborhood of the new hospital. Erecting a bridge on Grove Street over US-41 and constructing a roundabout a few hundred yards west of there will not exactly be dust-free and congestion-free.

It'll be a mess for at least a few months.

One final thought about the entire Duke LifePoint search that has consumed the community for the last year: likely, the critical factor that turned DLP toward the Roundhouse property and away from the golf course and the township site was Roundhouse's eligibility for Brownfield funds. The township and the golf course couldn't offer that.

A Brownfield project can offer millions of dollars to a developer. That's important to a for-profit corporation.

HOLD ON. ONE final, final observation about Duke LifePoint and the city.

City Commissioner Don Ryan's eloquent and clear-minded summation last week of the deal that was reached for the relocation of Marquette General Hospital had to remind some of us that we're losing three wise, conscientious, even-tempered commissioners this November.

Ryan, Fred Stonehouse, and mayor Bob Niemi are all leaving because of term limits. You might not have agreed with all their decisions during their tenure but you can't deny that they're smart and devoted and polite, and commission meetings have generally run smoothly.

And the city, despite some daunting challenges, is moving ahead.

Maybe our three retiring commissioners could move to Washington DC and teach those clowns how a government is supposed to be run.

A WORLD PREMIERE in Marquette!

It sounds a little hyperbolic but it's true. The play Willpower takes to the stage this Thursday and Friday at Kaufman Auditorium.

It was written by Marquette novelist Tyler Tichelaar. The director is Moire Embley, the musical director is Jeff Bruning. They're both locals. The actors are local, the singers are local.

So yeah, this is local and it's original.

The story itself isn't too bad, either. It's about Will Adams, a young man in Marquette at the turn of the 19th century who overcame a mysterious, crippling disease to write poetry, essays, magazine articles and an operetta.

At the end of his life (at age 32), he was paralyzed from the neck down, but he was still determined and creative.

A lesson for all of us. And we'll be the first to see it this Thursday and Friday at Kaufman.

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Sunday, September 7, 2014

A New Day for the Landmark Inn

WELL, THE RUMORS that have been leaking out over the past few weeks are true. The Landmark Inn is being sold.

The principals in the deal haven't felt comfortable in confirming the rumors until now because of the uncertainties and complications in any major transaction, and the final papers are still not signed. But it now appears the sale, which has been in the works for the last year, will be completed within the next several weeks.

The new owners, Graves Hospitality out of Minneapolis, come in with a helluva reputation for buying and then enhancing hotels. One of their former flagship properties, the Graves 601 Hotel Minneapolis, was named one of the best 500 hotels in the world by Travel and Leisure magazine.

Food and beverage is another specialty for Graves. Their Bradstreet Craftshouse Restaurant in Minneapolis was named the sixth best bar in America by Food and Wine magazine.

So, yeah, these are bigtime players with bigtime ambitions.

An interesting side note: Jim Graves, the cofounder of Graves Hospitality and the founder of the AmericInn franchise, ventured into politics in 2012.
He was the Democratic candidate opposing Tea Party goddess Michele Bachmann in one of Minnesota's most conservative districts. In spite of being outspent 12 to 1 by the incumbent Bachmann, Graves nearly pulled off a huge upset.

Maybe that'll win him some points with Marquette's progressives.

Nevertheless, anytime you have a sale like this--transitioning from a small group of local owners to a bigger, out-of-state corporate owner, you have concerns.

Will the new owners just be intent on running a slick, money-making operation with no concern for the special place that the Landmark occupies in Marquette and the Upper Peninsula? Will the new owners be as generous with their time, money and energy as general manager and owner Christine Pesola was with hers in supporting community events and organizations?

There's good reason to believe Graves Hospitality understands all this. Matt Mering, who's the vice president of food and beverage and development for Graves, is from Marquette. His mother and father live here. They know and love the Landmark Inn and have been customers for years. They understand and appreciate the Landmark as only locals can.

Will there be some changes? Absolutely. Graves Hospitality has some money and ideas to improve the Landmark. Those will be laid out in the months ahead.

As for Christine Pesola and her ex-husband Bruce Pesola, they remain as investors in the the hotel. They're not going anywhere.

For Christine, this has been a 17 year love affair with the hotel, the employees and the thousands of guests who've stayed at the Landmark Inn and enjoyed the food, drink and company there. Back in 1997, she was a self-described hippie who was suddenly thrust into the role of general manager with virtually no management experience. She learned on the job.

The hotel endured serious financial troubles in the early days but survived to become, arguably, the centerpiece of a revived and prosperous downtown Marquette.

It's a hotel that's felt equally comfortable opening up its elegant lobby to host hockey events and symphony events. Its New Years Eve parties, open to all with free admission, are legendary.

The Pesolas, along with Christine's late parents Joe and Marvelle, and minority owners Bob Cowell and Al Hunter, all made it possible when the old hotel, inhabited by pigeons, looked like it might have a date with a wrecking ball. Possibly against their better judgment, the investors spent their money and energy on a dream that, amazingly, became a reality.

Now it's a new day. Let's see what Graves Hospitality does with that jewel on top of the hill on Front Street.

(Full disclosure: I'm a very good friend of Christine Pesola.)

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Friday, September 5, 2014

Duke LifePoint Chooses Roundhouse

After a year of deliberations and negotiations, Duke LifePoint has made its decision. It wants to relocate Marquette General Hospital to the Roundhouse property in Marquette.

A DLP executive will attend next Monday's City Commission meeting to make the proposal for the purchase of the property.

It is not a done deal yet. The City Commission must still accept the offer and details must still be worked out in a formal contract, but it seems highly unlikely that anybody or anything will stand in the way of a deal that means so much to the city of Marquette.

Here are some of the highlights of the proposed deal as listed in the Memorandum of Understanding:

Duke LifePoint would pay the city $4 million for the land containing
the Roundhouse site and the property on which the Municipal
Service Center stands. It's a total of 37 acres.

Duke LifePoint would drop its two Tax Tribunal cases against the city for  the current Marquette General Hospital. That's a big relief to the city which was facing a major shortfall in tax revenues if DLP had succeeded at its Tax Tribunal.
The city would help DLP get a 12 year, 50% tax abatement on the
Roundhouse/MSC property.

The city would design and construct a roundabout or other signalized
entrance to the new hospital off of US 41. This would be located at
about 300 yards west of Grove Street on US 41, roughly connecting
the current MSC site and the Norlite Nursing Center.  
The city would design and construct a new bridge over US 41 at
Grove Street. That means the surface intersection of US 41 and
Grove  Street would be eliminated. 

The city would realign Baraga Avenue to tie into Spring Street to 
allow better access to the new hospital.
The current MSC building would be torn down and relocated.

Other major improvements would also have to be made--electrical, water, sewer, environmental and the like--but the deal, as it stands, has been agreed to by Duke LifePoint and a subcommittee of the City Commission.
Now, it'll be up to the full Commission to sign off on it.

The one essential piece of this agreement is that the entire development would be declared a Brownfield Project. In other words, it's being developed on devalued former industrial or railroad land.

The Brownfield designation would enable DLP to set up a so-called TIF district (tax increment financing) which would allow it and the city to recapture tax dollars on the property and pay for all of the infrastructure improvements. Total cost of all the changes and improvements: $30 million dollars.

The city seems confident that virtually none of the costs will be borne by the city's citizens.

It's long and complicated, to say the least, but the money men and women will figure it out.

Construction of the hospital and a medical office facility on the same campus will take about two years.

What happens to the old hospital and the current medical center? No answers yet.

One thing at a time.

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