MANKATO – A five-story $ 7 million apartment building in the Mankato Place shopping center would bring 56 luxury units to the city center as early as next year at the suggestion of developer Gordon Awsumb.
“These are Class A apartments with enclosed parking, quality finishes, and private balconies overlooking Jackson Park,” said Awsumb.
Possibly a swimming pool and gym for residents as well.
The 60,000-square-foot building would rise above the former Red Rocks nightclub, extend almost all the way to the Brett’s Building, and remove the Jackson Street entrance to Mankato Place.
The ground floor would be converted into 46 parking spaces using a mechanical “Parkmatic” system that raises and lowers vehicles so they can be stacked in a confined space.
Four levels of apartments would cover the second through fifth floors with balconies facing east and south towards Second and Cherry Streets.
Awsumb, who will present the plan to the city’s economic development agency on Monday, said demand for high-end housing in the city center was not being met.
“People like to live in the city, but there are no high quality apartments (downtown) right now,” he said.
Awsumb, the longtime owner of Mankato Place before selling it earlier this year, said he was acting as the asset manager of the new owners for the mall and the development agent for the apartment project. A year ago, he and his partners were pursuing a five-story Marriott hotel project with 117 rooms and 117 rooms valued at $ 14.2 million over the Cherry Street Ramp southwest of the planned residential building.
Hotel development is not being abandoned but is being put on hold due to the ongoing pandemic, according to Awsumb, who notes the partnership retains exclusive rights with Marriott and has “air rights” to build over the city’s parking ramp.
“We’d love to go back to this as soon as the world opens up and the hospitality industry recovers,” he said. “… it will eventually.”
Currently, Awsumb will make the house available to the Economic Development Agency, which is made up of the City Council, to measure interest in future tax increase funding for the project. If the city guides appear open to TIF subsidies, a formal proposal will follow.
Awsumb is sure to talk about the project’s potential benefit to Mankato’s tax base once the TIF subsidies expire after 15 years.
TIF involves the provision of a portion of the additional property taxes generated by a new development for a specified number of years, with those dollars being used for part of the cost of the development. The subsidies are allowed under state law for projects that meet certain conditions, e.g. B. the renovation of an aging building or the construction of a project on a vacant former industrial site.
“Of course, remediation is more expensive than building on a grain field, but it’s better for the community,” said Awsumb.
The $ 7 million investment in the home will result in a property with an estimated market value of more than $ 4.5 million, according to a preliminary estimate by the County Assessor. That would bring in a local property tax of nearly $ 74,000 a year – about $ 57,000 more than the portion of Mankato Place now pays to the city, county, and school district.
Over a 15 year period, the additional taxes add up to more than $ 800,000 and the city council could allow that amount to be used to cover the cost of building the home.
“It’s totally in line with what everyone else has for good projects,” Awsumb said, citing other city-approved TIF grants. “It’s certainly good for the tax base in the long run.”
Mankato’s strategic plan includes the goal of increasing the number of residential properties in the downtown area to make the area a place to live, work, eat and drink, and attend music, sports and other entertainment events.
“It’s an interesting reuse and remediation project,” said Paul Vogel, director of community development, of Awsumb’s proposal. “It fills out something we’ve been thinking about for some time, which increases the housing options in the city center.”
Vogel is encouraged that private investors want to build in downtown Mankato even amid a pandemic-triggered economic downturn. A $ 48 million redevelopment of the downtown Hy-Vee site – including a new supermarket and six-story apartment complex with 66 units and affordable living space connected to the community center via the Skyway – is also being planned. Construction can possibly start as early as 2022.
“It’s a bright spot,” said Vogel. “… The development still seems to have some momentum.”
Awsumb’s current plan is for the apartment complex to be completed by December 2021, although he admitted the schedule is very tentative: “Tell me when the world will open again, I’ll tell you if that’s realistic. “
But Awsumb said he was very confident in the demand for high-end housing in downtown Mankato. Over the past few decades, he has developed downtown apartment and condominiums in major cities such as St. Paul, Minneapolis, and Des Moines.
Mankato may not offer the same level of urban excitement as these places, but said it is attractive because it has restaurants and bars, movie theaters, community center events, bike paths, and other entertainment options in a low-crime setting.
“Mankato is such a stable area economically,” said Awsumb. “It’s a well-run city. It’s a safe city. There are a lot of things to do, so it attracts investment.”
Regarding the SpringHill Suites by Marriott, he said there is no chance the project will be built in the coming year.
“The hotel is further down. A lot has to happen in this world before a new hotel is built.”