Lutsen Lodge owner addresses financial challenges and calls out arson rumors

The owner of fire-ravaged Lutsen Lodge has been dogged by allegations in an escalating number of lawsuits for failing to meet financial obligations that total hundreds of thousands of dollars and continued to grow even as the last embers of the historic Lake Superior getaway still smoldered.

Bryce Campbell acknowledged Wednesday that he owes roughly $150,000 to several people who own cabins and condominiums near the lodge that he managed for rental. Some have sued Campbell, alleging he withheld proceeds from the rentals for many months.

Without prompting and as the investigation into the blaze continues, Campbell, in an email Wednesday responding to questions about his legal problems, denied speculation that he said he saw on social media, and among some of the cabin owners, that he had anything to do with starting the fire.

"My heart is broken, and I feel like I'm grieving a person," Campbell wrote to the Star Tribune. "You have no idea what it's like to lose such a big piece of your life [that] my mom and I were building together. ... It makes my broken heart hurt even more to focus on such absurd accusations."

Campbell wrote that he recently invested millions of dollars in improvements to the three-story lodge, so "you don't [expletive] torch a place and burn up $5 million of your money. ... Let's use some common sense here, people."

Authorities in Cook County say the fire started about 12:30 a.m. Tuesday; the lodge, built in 1952 on a resort site that dated to the late 19th century, was quickly engulfed. By later that morning, all that remained standing were two chimneys. The lodge's general manager said there were no guests checked in Monday night, and no one was injured in the fire.

The lodge was insured, Campbell said, adding that he is "dreading the process" but intends to see that it will one day be rebuilt and reopened to the public. .

The State Fire Marshal, taking the lead in the investigation, released a statement Wednesday noting that the lodge, which had a working sprinkler system, was last inspected in July, when seven violations were found, with four of them repaired. At this time, the statement continued, "it is too early in the investigation to determine if the three outstanding violations played a role in the fire."

A federal Bureau of Alcohol Tobacco and Firearms spokeswoman said a certified fire investigator with her agency has connected with state officials about the blaze.

Campbell, 39, bought the lodge in 2018 and in 2020 added its sister property 70 miles to the south, Superior Shores,. His legal problems started in July 2021, when he was sued by a remodeling contractor for failing to pay a majority of the $310,000 he was billed for work on Superior Shores. A judge found him liable, and he paid the contractor about $190,000 this past July.

A cabin owner who also has a condominium in a complex that overlooks the lodge said he is suing Campbell for withheld rental payments that total tens of thousands of dollars.

An Eden Prairie couple say they are owed $13,000. Court records show that an 89-year-old widow from the Northfield area sued Campbell on Monday, about 12 hours before the fire, contending that he owes her $11,000.

Jay Halverson of Edina owns a townhouse and a cabin near where the lodge once stood. He said Campbell owes him about $30,000 in rental proceeds from both properties.

Halverson, president of a residential association for 10 cabins up the hill from the lodge, said he and six others intend to go to conciliation court in pursuit of their money. He said the grand total "is really unclear because of [Campbell's] sloppy bookkeeping or even the lack of bookkeeping."

Cliffhouse is just one of four residential associations near the lodge that have either ended or are winding down their management relationships with Campbell, Halverson said.

Halverson said that when he heard about the fire, he was immediately suspicious about its cause. "It seems like some kind of a movie that comes on late at night," he said.

Tracy Skar has a Cliffhouse townhouse and is the association's treasurer but does not rent out her unit. Skar said she knows "there are lot of people who are owed money. It was a bad situation that I thought couldn't get any more drama, and then this happened."

Skar added that the fire's cause has spawned "a lot of speculation. [That] has been everybody's first thoughts, second thoughts. It's a sad situation, and you never want to think the worst."

Cook County records show that Campbell has been increasingly late with his business' property taxes. While his taxes associated with the lodge are paid by escrow on time, two other properties he owns nearby have been paid late every year since 2019, except for 2020, according to the records.

Asked about his current financial health given the sizable payout in July to the contractor, money due to nearby property owners and continuous delays paying property taxes, Campbell responded: "cash flow is limited [due] to a slow winter [and] millions just spent on a major project."

The statement from the State Fire Marshal said it's difficult to estimate when the investigation will wrap up "due to the magnitude of this fire." Firefighters remained on the scene Wednesday, tending to hotspots.

"There was great potential for a loss of life with this fire," Lutsen Fire Chief Steve Duclos said. "We are thankful that wasn't the case."

Star Tribune staff writers Jana Hollingsworth and Christa Lawler contributed to this report.