Hardee’s block sold


City, county can’t agree on parking


It is official. Winona city leaders approved the sale of an entire, city-owned block to Fastenal founder Bob Kierlin’s Main Square Development and Hiawatha Education Foundation for the construction of upscale apartments, storefronts, offices, and a Montessori preschool in downtown Winona. The development on what is colloquially known as the Hardee’s block will eliminate a significant amount of downtown parking, but it will fulfill the city’s long-held dreams for developing the site, many parents’ need for more childcare options, and local business leaders’ wishes for more high-end apartments for newly hired professionals and executives to live.

The deal was first announced in February and tentatively approved by the city of Winona Port Authority Commission in March. Last week, the commission approved a formal purchase agreement to transfer the property. Kierlin’s newly formed Main Square Development, LLC, and his family’s longstanding private foundation will pay a combined $1.9 million for the site — $400,000 more than the properties’ assessed value, but $60,000 less than the city has spent on the properties. The site still needs environmental work to clean up old, underground pollution; that is estimated to cost $600,000. If the city wins a state grant to fund the cleanup, the city’s cost would only be $150,000. However, last week’s purchase included a new detail in the deal: even if the city does not win the state grant, city leaders have agreed to pay for cleanup work, up to as much as $800,000.

“We’re trying to do it as soon as we can,” Kierlin said of the project’s construction schedule. He and contractor Peter Schwab of Schwab, LLC, explained they need to wait until after the state’s grant award decision in July to start major construction work. Schwab expected the whole project will likely not be completed until the end of 2019, but Kierlin is hoping the Montessori preschool will be ready for students by August 2019.

The Winona Port Authority Commission is an appointed board of business leaders and two City Council members charged with leading the city’s economic development efforts. The commission, including Fastenal executive Dana Johnson, voted unanimously to approve the sale.

Loss of parking has domino effects for city

The new development will provide parking for its own tenants, but it will eliminate nearly 150 parking spaces for the Winona County Government Center, the Winona County History Center, the city-owned Masonic Temple Theatre and Friendship Center, and the public.

City leaders have faced some criticism over the loss of public parking the Main Square Community development will cause, as well as the 83 public parking spaces that would be lost to the city’s proposed 60 Main Street project. Port Authority Commission Chair Mike Cichanowski has responded by saying that both sites were never meant to be parking lots forever; the city always hoped to promote the development of vibrant, mixed-use buildings there. “To have the most prime piece of property in Winona used for parking doesn’t make sense,” Johnson said of the 60 Main Street site last year.

However, the impending loss of parking for the Friendship Center has spurred city leaders to start seriously planning to relocate the senior center. At the same meeting last week, Port Authority Commission members approved a tentative deal to demolish the former Winona Junior High School auditorium and convert it into a parking lot, and Sarvi said city staff had tried unsuccessfully to purchase property from the Wesley United Methodist Church for parking.

Additionally, the city is contractually obligated to replace 24 of the county’s parking spaces currently located on the Hardee’s block. City leaders have laid out a plan to do so by eliminating 24 public parking spaces at two different municipal parking lots downtown. (See map.) Sarvi said that while dedicating these public parking spaces for county employees only has no direct cost for the city, it will affect neighboring businesses.

City-county parking negotiations fail

The city’s contract to provide county parking dates back to 2007, when the county agreed to transfer a county-owned parking lot to the history center for the center’s new addition if the city would provide the county with replacement parking instead. Under the contract, the city must provide the county with 24 spaces somewhere within two blocks of the government center until 2037.

Over the last several weeks, city and county officials tried to work out a deal to amend the 2007 contract in ways that would help both sides, but they could not agree. City leaders proposed new terms that would allow the public to park in the county spaces during off hours and that would release the city from the contract if the county leases the government center. The current agreement includes languages that would terminate the agreement if the county sells or otherwise vacates the building, but it does not spell out what would happen if the county leases all or part of the building. The city’s proposal would have clarified that the city’s obligation would end if the county leased the building. In exchange, Winona County Administrator Ken Fritz asked for language that would require the city to continue providing 11 spots for the county’s other buildings even if the county leases or sells the government center.

Though Sarvi warned them that the County Board might reject the deal without Fritz’s proposed language and Sarvi said that he personally believed Fritz’s proposal was reasonable, the Port Authority Commission members turned Fritz down last month. Cichanowski reminded Fritz of the tax benefits Winona County will see from the Hardee’s block development. Cichanowski added of Fritz’s request for 11 spaces, “I mean everybody else is fighting for parking downtown.” The city’s Port Authority Commission asked the County Board to approve the city’s requested amendments without the county’s requested amendment.

Last week, Fritz recommended that the County Board reject the city’s proposal and stick with the existing contract language from 2007. Sarvi attended the County Board meeting but did not speak up, and the County Board voted unanimously to reject the city’s proposal. In an interview, Fritz explained, “The odds of leasing the building are not that high, but you don’t want to close any doors.” When Sarvi broke the news to the Port Authority Commission, commission member Laurie Lucas was displeased with county leaders. “That does not sound like they’re thinking of the public. Sorry, but they’re not helping our parking problem,” she said.

If the county does lease the building in the future, there might be disagreement between the two governments over whether the city is still obligated to provide parking. Fritz stated that the city would be. Sarvi said, “Clearly, the 24 spots are tied to the existing building.”



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