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Two Harbors directs attorney general to review mayor's underwater-hotel pursuit

The motion was made by Mayor Chris Swanson, but he stood by the plan as potentially bringing jobs to the region.

Virginia Mayor Larry Cuffe Jr. and Two Harbors Mayor Chris Swanson
Virginia Mayor Larry Cuffe Jr., left, and Two Harbors Mayor Chris Swanson react to Vice President Mike Pence's speech Aug. 28, 2020 while waiting to take the stage to present a framed letter from six Iron Range mayors supporting the Trump-Pence ticket during Pence's campaign visit to the Clure Public Marine Terminal in Duluth.
Clint Austin / File / Duluth News Tribune
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TWO HARBORS — The Two Harbors City Council has directed the Minnesota Attorney General's office to review whether Mayor Chris Swanson's pursuit of an underwater hotel in Lake Superior crossed an ethical or legal line and issue a written opinion on it.

Swanson's appearance on a podcast with someone claiming to be an anonymous billionaire involved in the project, an unfinished website about the project, vibetwoharbors.com , and recent postings to Swanson’s Twitter account, @mayorswanson , had prompted the City Council to call a special meeting Thursday evening to consider “whether or not certain social media publications violate the city code, charter, policies or state statute.”

Swanson himself moved to have the the issue reviewed by Attorney General Keith Ellison's office and the six councilors unanimously agreed.

Swanson was the only one to speak during the 9-minute meeting.

He acknowledged the stress the issue had caused for council members and city staff in recent days and said he made the motion to "get this past us and move on."

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But he stood by his pursuit of the underwater hotel.

"Truthfully, when I heard about the underwater hotel ... I thought this was something that might create jobs," Swanson said. "And I'm sure you'll hear more about that in the future."

He then compared the plan to the early days of taconite, which ultimately sustained the region as high-grade natural iron ore became less plentiful.

"I guarantee you people thought that was a far-out idea," Swanson said of taconite.

In August, Swanson appeared as a guest on the “ Ask a Billionaire Podcast, ” where he discussed plans for a $400 million underwater hotel and submarine with “Mr. O.”

Mr. O is a pseudonym for a man claiming to be a billionaire who is mentoring Swanson and would work with him on the project to help raise “right around $400 million, but it’s going to be a lot more than that by the time we’re done” for the project, Mr. O said in the podcast.

In the podcast, Swanson boasted about the $11.5 million Two Harbors secured from the 2020 bonding bill for a new water-treatment plant, suggesting he could use his office to secure public funding for the underwater hotel project as well.

“Being mayor, I do get a little bit of sway,” Swanson told listeners. “I’ve been able to secure quite a bit of funding through the state — different projects. Recently, we were able to secure about $11.5 million from the state of Minnesota through bonding bills. And so we have goodwill. We have a great opportunity and we have a really exciting and unique project.”

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It is unclear exactly what Swanson’s role in the project would be — he denies having any financial stake in the project — but his use of the title of mayor to promote the project raises questions on whether he was using his elected office for personal gain.

In an email Wednesday, Swanson declined a phone interview with the News Tribune because “I am going into the meeting with as much information as you.”

When pressed by the News Tribune on whether he used his position as mayor for personal gain, Swanson responded in an email: “I am very excited to help Two Harbors projects and I encourage all types of investors and projects to happen in our community. This underwater hotel is potentially a big project for Two Harbors.

“The city has a very specific process if there is a conflict of interest. That conflict occurs as soon as there is any request from the city. The policy is very clear. There has been no ask or request to the city. I have no financial interest in this project and Two Harbors is excited to welcome projects and entrepreneurs to our town.”

An unfinished but live website for the project, VibeTwoHarbors.com , listed “Mayor Swanson” and Mr. O as the project’s “team” below stock images of models.

A screenshot from the vibetwoharbors.com website shows Mayor Chris Swanson and Mr. O under stock images of models.
A screenshot from the unfinished but public website for the project, vibetwoharbors.com, lists Mayor Chris Swanson and Mr. O as team members under stock images of models.
Screenshot

In the podcast, Swanson said his brother, Joe Swanson, owner of Bluefin Bay Family of Resorts in Lutsen and Tofte since 2020, has “agreed that he's going to be part of the project.” Joe could not be reached for comment Wednesday evening.

Throughout the podcast, Swanson repeatedly brought up his position as mayor of Two Harbors and a contact form on the Vibrant Two Harbors website asking “individuals who are looking for high-return investments” to fill in their contact information so that “Mayor Swanson will be in touch.”

A contact form on a website directs investors to Mayor Chris Swanson
A contact form on the project's website directs investors to Mayor Chris Swanson.
Screenshot

The city’s ethics policy bans elected and appointed officials and employees from using their “official capacity” to make a statement or comment to media outlets without the prior approval of the City Council.

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It also said officials and employees “shall not use his or her official position to solicit privileges or special treatment.”

Swanson was first elected mayor in 2016 and was reelected in 2020. He is the CEO of digital marketing agency PureDriven and entrepreneur coaching service Garage Starts.

Doubt cast on Mr. O

In the podcast, Mr. O said Swanson tracked down someone who designs underwater resorts and that “we’re moving forward in a lot of ways.”

Reached by Facebook Messenger on Tuesday evening, L. Bruce Jones, who lives outside Coeur d'Alene, Idaho, and runs Triton Submarines and Poseidon Undersea Resorts, confirmed he was in contact with the group.

“We had a casual conversation many months ago,” Jones said. “Then nothing.”

In a telephone interview with the News Tribune on Wednesday, Jones said that in several conversations during summer 2021 with Swanson and Mr. O, he got the impression that Mr. O was fake.

“The mayor of the town had someone that he thought might finance the installation and operation of the hotel,” Jones said. “But frankly, to me, I didn’t think the guy was real.”

While he answered some questions about the feasibility of an underwater hotel, he directed the two toward a “more cost-effective and more profitable endeavor” — a $7.5 million tourist submarine.

A submarine traveling underwater.
A commercial submarine manufactured by Triton Submarines that was pitched to Mayor Chris Swanson as a possibility for Lake Superior.
Contributed / L. Bruce Jones

“As far as I was concerned, the deal was never real,” Jones said. “Nobody was really ever serious. It was mainly just sort of a fishing expedition and an opportunity for this Mr. O, whoever it was, to waste my time.”

Jones sent photos of the submarine to Swanson’s official city email address on July 2, according to emails Jones forwarded to the News Tribune. Three days later, Swanson responded with his city email: “Thank you Bruce. That is spectacular.”

In a video conference interview Wednesday evening, the man claiming to be Mr. O would not share his real name or a video of himself. He said clients pay him between $10,000 to $50,000 “for my tutelage” and that he was mentoring Swanson.

In the podcast, Swanson said he considered the fees low “for the value that you’re giving.”

Mr. O declined to point to projects he’s seen through fruition when asked by the News Tribune.

“If people in the city (of Two Harbors) said to me, ‘I want to see your other projects,’ I would say to them, ‘I’ll pass,’” he said. Instead, he said he requires people needing proof to meet with his lawyers in person, leave their phones outside and look through documents with his name redacted.

There is very little news coverage of Mr. O and it’s unclear what projects he’s financed through to completion.

In 2017, Flint, Michigan, community advocate and former school administrator Art Wenzlaff went to the 1470 WFTN radio station in Flint and said he was working with Mr. O , who said he would “cause, through the volunteers of Flint, considerable funds to be raised to fund projects and ideas” and help steady Flint’s financial woes.

Mr. O said the Flint idea never happened; the people involved were in it for themselves.

It is unclear what the concerns the City Council had over Swanson’s Twitter account, @mayorswanson , which has been dominated lately by talk of cryptocurrency, a digital form of currency like Bitcoin.

In several tweets, he’s said he wants Two Harbors to have its own cryptocurrency.

“If Two Harbors gets a citycoin I’ll use the revenue generated to mine more citycoins and embed Web3 into the foundation of my town,” he tweeted on Dec. 29, 2021.

News Tribune reporter Adelle Whitefoot contributed to this report.

This story was updated at 6:30 p.m. Jan. 20 with information from Thursday evening's City Council meeting. It was originally posted at 11:38 a.m. Jan. 20.

Jimmy Lovrien covers energy, mining and the 8th Congressional District for the Duluth News Tribune. He can be reached at jlovrien@duluthnews.com or 218-723-5332.
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