The Free Press, Mankato, MN

Local News

March 17, 2010

Parking ramp grant secured

Ramp to be built at Hickory and Second streets

By Dan Linehan The Free Press

MANKATO — Mankato has received a state grant of $850,000 to build a parking ramp downtown at Hickory and Second streets, a big boost to a plan to renovate the Heco Building. 

The grant is a linchpin in a plan to bring two major employers and 90 jobs to the downtown office building, which is just 25 percent occupied. But neither the jobs nor the developers’ $2.5 million investment in the building would happen without the ramp, which was difficult to fund without the state grant.

Developer Tony Frentz said the project is necessary to attract high-quality tenants.

He credited the Verizon Wireless Civic Center, the city’s revolving loan program and nearby redevelopment projects for the project.

“It all builds on each other,” Frentz said.

Chad Surprenant, president of prospective tenant I&S Group, agreed.

“We really feel that professional services like us should be in the city core,” he said. It’s also nice for a regional and national company to have downtown headquarters when clients visit.

Developers have not revealed the second major tenant for the Heco.

The Heco redevelopment is also envisioned to include the downtown’s first condominiums, which are owned by their occupants like regular houses.

The ramp, which is slated to double the 77 stalls currently on site, will cost an estimated $3.2 million. It won’t be entirely for the developers, who will pay extra for amenities that benefit the Heco Building in particular like special entrances.

The developers are also slated to receive $25,000 in grants, $400,000 in loans and $250,000 in tax increment financing from the city. This is a tax subsidy whereby the estimated increase in property taxes that will result from an improved property is dedicated toward paying some of the costs of the development.

The city still retains the taxes based on the pre-redevelopment value of the building.

The Mankato City Council has so far approved the subsidies and design of the ramp, but not its construction.

There used to be a ramp at the site but it was demolished because it was in very poor shape.

The ramp is needed because parking is becoming more difficult to find downtown, Mankato Community Development Director Paul Vogel said.

 The developers also want to buy the ground underneath the Heco Building from the city. It was leased at $5,442 per year to the original developer when it was built in 1983.

The Heco Building was purchased in July of last year by Neubau Holdings, LLC, the same entity that renovated the nearby Graif Building. The financing method for fixing the Heco Building is similar to the Graif, as well.

Vogel said the grant award is evidence of Mankato’s track record.

“If we are proposing a project they are comfortable that we will make it happen,” he said.

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