Fall Lake Township delved into the continuing debate over the use of area lodging tax dollars, both with frank discussion at its February board meeting and the appointment of a former tourism bureau director to the lodging tax board.
Cindy Smyka, who once led the group now known as VisitEly, will replace Adam Masloski as the township’s representative on the lodging tax board.
Masloski, who is moving to Grand Rapids, is stepping down from the town board and also gave up his seat as the township’s designee on the lodging tax board.
He was the lone vote against a lodging tax board decision that allocated only two-thirds of what was requested in funding by VisitEly, and also voiced concerns Feb. 2 about the current direction of the lodging tax board and endorsed Smyka to take his place.
“I would be happy to step down knowing somebody like Cindy would be representing the area,” said Masloski.
Prior to the vote, Smyka dominated a lengthy discussion, taking aim at the lodging tax board, the city of Ely and the Ely Chamber of Commerce at varying points during the discussion.
Smyka also pointed to correspondence from Lake County, which sought more specifics related to how the roughly $131,000 generated by taxes at Fall Lake lodging establishments are being spent, as a potential powderkeg.
“It’s going to be explosive,” said Smyka.
Joe Baltich, a Lake County board member, pressed back at some instances about the urgency of the county’s correspondence.
“From a county standpoint, I can’t remember exactly how it came to be, we said at some point we should see how the $131,000 is being spent,” said Baltich. “Right now the county’s position is waiting to see an accounting. You could write it on a napkin, or maybe more formal than that, saying this is what we spent the money on. I wouldn’t say there’s a preplanned step beyond that point.”
Smyka, however, said “it’s going to come to a point where it’s going to blow up (and) because you are the fiscal agent there’s going to be some big fish to fry.”
She said “I think things need to be stopped in their tracks,” calling several times for a “pause” on funding to the lodging tax board.
While stopping short of saying county action was imminent, Baltich sided with Smyka and questioned lodging tax board decisions, particularly those to fund operations and staffing at the new trailhead building, owned by the city of Ely.
“I will tell you that if we’re paying wages and cutting grass and filling potholes in the parking lot that will raise a lot of eyebrows,” said Baltich. “I’m from the old school that 95 percent (of spending) should be marketing, and five percent administrative. I agree with Cindy and I’m not happy. We could have built that convention center here for that $4.1 million (that funded the trailhead building).”
Smyka also blasted the process that led to the development of the trailhead building, charging she was left out of discussions related to the planning of the building.
“It was designed in a vacuum,” she said. “You could never convince me there was a plan for that trailhead building. You can not tell me there was a plan for that place... The city of Ely built a building without a plan to maintain it.”
Smyka later accused the city of “strong arming” the lodging tax board and said “they are no bigger contributor to the pool of money than you guys are.” “Why are they getting any money for a building that nobody asked you boo about,” said Smyka. “I’m talking about a missed opportunity to have active components that actually engage with visitorship. All the things that are now being discussed we had years to be designing this and figuring out who was going to run this space. We could have been a lot further along in the process if anybody else had been included in this beside the city.”
The Ely Chamber of Commerce was also caught in the crosshairs at the Fall Lake Town Hall, as Smyka also criticized the lodging tax board’s decision to provide $53,000 to the organization to help staff the trailhead building.
She alleged the Chamber was in financial peril and said “I understand the check has already been cashed,” and sought further transparency from the organization.
Smyka called the contribution a “bail out” of the Chamber and that “we need some accountability here.”
Baltich said he agreed and said “it bugs me that the Chamber is a membership organization and is receiving tax dollars through this process.”
“Tax dollars need to be used to promote the region,” said Baltich. “It doesn’t seem quite right.”
The lodging tax debate has spanned several months, and comes amid a change of direction in sort by the lodging tax board, which includes representatives of Ely, Fall Lake, Morse Township and St. Louis County and determines how funds collected via the area three percent lodging tax will be distributed.
Nearly all of the funding has annually gone to VisitEly, but the lodging tax board decided to diversify in 2026 and divert some funds to the city of Ely and Chamber to operate and staff the new trailhead building.
The board voted to fund two-thirds of the requests of both the city and Chamber and in turn funded two-thirds of the $315,000 sought by VisitEly.
The result has been months of pushback, both from VisitEly and Ely’s tourism bureau board, and increasing legal angst.
The lodging tax board has received legal guidance that it’s operating within the law, while VisitEly has charged the lodging tax board is violating state statute.
Smyka suggested several times that the legal issues are coming to a head.
“I would say it’s emergency meeting time,” said Smyka. “Four attorneys in the mix is three too many.”
She also said a legal battle would likely lead to a freeze in funding and needed marketing.
“As a young business owner in the township who is relying on being marketed, if this goes out the window what are our resorts going to do,” said Smyka. “We can not jeopardize our lifeline which is our ability to market ourselves.”
She touted the efforts of VisitEly and lamented cuts the organization made because of the reduction in 2026 funding.
“You’re talking about over $100,000 slashed,” she said. “There are huge forms of media that are no longer being touched. The podcast, gone. These are people with master’s and marketing degrees.”
Smyka called the lodging tax board’s decisions “outrageous.”
“If the lodging tax board wants to operate as a convention and visitors bureau that’s responsible, then by all means do it but that board needs to be comprised of subject matter experts,” said Smyka.
Smyka offered to replace Masloski as the Fall Lake designee on the lodging tax board, adding that “I would say Paul Kess opened the door wide open” for her appointment.
Kess, who has since been replaced as Ely’s lodging tax board representative by current council member John Lahtonen, served for a year but came under fire from VisitEly supporters, who complained that he was not an elected official.
Smyka would join Morse’s Terry Soderberg, Ely’s John Lahtonen and St. Louis County Commissioner Paul McDonald on the lodging tax board.
That group’s next meeting hasn’t been scheduled, but Smyka said she would press for a review of bylaws.
Fall Lake members also passed a motion seeking review of lodging tax board distributions to ensure the group is in compliance with the law and in response from the communication from Lake County.
