MANKATO — The biggest downtown development project in recent history is being proposed, promising to transform a downtown block, bringing a multi-story office tower, a five-story retail and apartment building, and a parking ramp.
Mankato development firm Tailwind Group is hoping to start construction on the $15.8 million project in the spring.
The office six- or seven-story tower, on the corner of Riverfront Drive and Warren Street, would bring a new business to town that would employ about 30 people with another 100 or more employees in the building coming from local businesses that relocate there.
Another five-story building would be built along South Front Street, where Miller Motors and RedSky Lounge are located. Those two buildings would be razed. RedSky would locate in part of the first floor of the new building. Three floors of the building would feature 15 upscale apartments.
A pedestrian walkway would run between the new building and Pagliai’s Pizza to a parking ramp to be located behind the five-story building and adjacent to the office tower. A piece of land on the corner of Riverfront Drive and Cherry Street is slated for a possible future tower.
The developer is seeking no public subsidy for the development, which would be the largest downtown project since the civic center and Hilton Garden Inn.
The city would make the parking improvements, but no general fund money would be used and the developer would contribute significantly to the parking improvements.
“We’re excited about it,” said Kyle Smith, director of strategic development for Tailwind Group. “We’ve been working on this for years.”
Smith said he is still finalizing the lease agreement with the new business that would move into the office tower and with other tenants. “I think it’s a viable and real project.”
City Manager Pat Hentges said that even though the developer hasn’t finalized everything, the city wanted to get the proposal out.
“It was important for us to get (the plan) out early so the council and public can react to it. There are a number of pieces that have to be put in place.”
Hentges said city staff has met with many of the proposed tenants for the building as well as the bank that would finance it and thinks the developer has put together a viable project.
Mankato Community Development Director Paul Vogel said the city’s role would be to increase parking in the area for use by customers and employees of the new businesses and other businesses in the area.
“It’s an exciting project,” Vogel said.
The parking ramp and a new surface parking lot across Front Street, along Warren Street, would cost a total of about $5 million. The city will apply for a state redevelopment grant and federal funds to cover some of the cost.
The developer would contribute $1.3 million toward the parking improvements. That will come in the form of the developer razing some buildings and donating the land for the parking ramp and parking lot.
A tax-increment district would be established by the city. Tax increment uses the increased property taxes from a new development to help pay costs of the development. In many cases the developer of the project gets those tax increment payments to help cover their costs. In this case, Vogel said, the tax-increment payments will cover the costs of the three-level parking ramp and parking lot.
“This is a case where the developer really stepped up,” Vogel said.
The surface parking lot on the corner of Front and Warren would require removing two small buildings. Tailwind owns the building that was home to a longtime antique store and is working with the owner of the adjacent Survey Services building.
The Mankato City Council, acting as the Economic Development Authority, will give the plan a preliminary review at its Monday meeting. The final plan should be ready in January, including lease agreements and financing agreements from the developer.