Nov. 19--The state of the nation's economy is hitting home.

A year after the Superior City Council adopted a resolution creating Tax Increment Finance District No. 10, the council voted Tuesday to dissolve it.

The city created the special tax district to help with the expansion of Barker's Island Inn. The owners, Evergreen Square LLC of Barker's Island, held by Oliver Cos., informed city officials it would not precede with the project because of current economic conditions and financial markets.

Oliver Cos. planned a $15 million expansion of the existing hotel and conference center on Barker's Island. Plans included building a time-share tower that featured condominiums designed to create individual sleeping rooms that could serve as additional hotel rooms when owners weren't using them. About 40 units -- most of which would have accommodated up to three sleeping rooms -- were slated by be built near the waterfront.

Plans also included tripling the size of the conference center, expanding the restaurant and bar, remodeling the hotel and expanding parking.

"This just demonstrates the incredible change in the financial markets now ... the rules have changed dramatically," said Mayor Dave Ross. "The rules seem to be changing week by week."

Under the agreement reached with the city, the city was slated to sell the company additional land for more than $503,000 to give Oliver Cos., land needed for the hotel expansion plan.

To accommodate the sale, city officials renegotiated the marina lease with Sailboats Inc., which leased the property needed for the hotel expansion. The new agreement turned over a portion of a four-acre parcel to Sailboats Inc., being consideration by another developer for townhouses between the marina and existing houses.

Former Superior planning director Marshall Weems and land develop Bob Coborn, partners in Mission Development LLC, were planning a 38-unit townhouse development valued at $8 million on the four-acre parcel. The project died when the new marina lease relinquished a portion of the property to Sailboats Inc.

The city also created a tax increment finance district to provide up to $3 million to help pay for the hotel expansion.

The project stumbled late last year when bids for the project came in about $5 million higher than estimates; it never recovered as the nation's financial markets tumbled and credit tightened in the wake of the nation's foreclosure crisis.

Mayor Dave Ross said it's unfortunate the project couldn't get the financial backing needed for the project to move ahead.

"It goes back to 'we critically need convention space in the city of Superior' in order to compete in the regional area for activities," Ross said. "We're going to try to find another way to get it done ... It was with great regret we had to withdraw the TIF."

Shelley Nelson can be reached by e-mail snelson@superiortelegram.com or call (715) 395-5022.

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