ST. PAUL, Minn. - A report by the Legislative Auditor paints a troubled picture of the body that is responsible for economic development on Minnesota's Iron Range.

The report, issued by the office of James Nobles, is critical of the operations of The Iron Range Resources and Rehabilitation Board (IRRRB), which provides loans and grants for economic development in northeastern Minnesota. The IRRRB also owns Giants Ridge Recreation Area and the Minnesota Discovery Center Museum.

Among the findings of the report:

  • Overall, IRRRB oversight and evaluation of its loans and grants are inadequate.
  • IRRRB did not adequately specify objectives—such as job growth—in many loan contracts we reviewed, and it collected insufficient evidence on how well loans met their objectives.
  • IRRRB does not require most companies to report the number of jobs they create using IRRRB subsidies. For companies that do provide job data, IRRRB relies solely on their self-reported data.
  • From 2006 to 2014, Giants Ridge operating losses increased by more than 500 percent. IRRRB has subsidized operating losses with an average $1.9 million yearly.

The auditor also says that the IRRRB keeps inadequate records on loans issued, so evaluating the loan program is difficult, if not impossible. In addition, James Nobles is urging the IRRRB to refocus on the original goals set when it purchased the Giant's Ridge Resort back in 1984.

  • Create economic development
  • Attract private-sector development
  • Provide recreational facilities to enhance quality of life for people of the Iron Range
  • Create a year-round recreation destination.

Finally, the audit suggests that the structure of the board may be unconstitutional according to state law, which requires members of the board to be legislators.

IRRRB Commissioner Mark Phillips promises that changes will be made to the way the agency does business. He maintains that work is already underway to improve the IRRRB's loan database, and that a new strategic plan will help improve financial performance at Giants Ridge.