by NATHANIEL NELSON
Gundersen Health System has purchased the vacant Kmart building and lot along Highway 61 for $3.8 million.
“We are exploring options to consolidate and expand services [that] we’ve provided [to] patients from Winona and surrounding communities for more than 30 years,” said Scott Rathgaber, MD, chief executive officer of Gundersen, in a statement. “Our goal is to bring care as close to home as possible for patients in Winona and surrounding communities.”
The bid for the 6.91-acre lot was submitted on Thursday, August 2, and accepted on the morning of August 7. The lot has remained vacant since the former Kmart’s closure in October 2014, and it was on the market for a little under four years.
This will be Gundersen’s largest property in Winona, but its use remains unclear.
Representatives from Gundersen said they could not yet share details on what the property will be used for. The August 2 filing states that it will be used for office and medical purposes.
Gundersen Health System provides over 7,200 jobs system-wide, with campuses across Minnesota, Iowa and Wisconsin with a sprawling headquarters located in La Crosse, Wis.Currently, there are two buildings operated by Gundersen Health System in Winona — the Winona Special Services, located at 111 East Riverfront Street, and the Gundersen Eye Clinic at 106 East Second Street.
The special services building houses the Gundersen Sports Medicine Center and dental specialities, as well as operating as a location for outreach services. Those services include cancer care, heart care, neurology, pediatric services and urology, among others. Both of these facilities, however, are significantly smaller than the 83,876 square-foot former Kmart building purchased in the August 7 sale.
Representatives from Gundersen said they did not have information regarding any changes to its current facilities in light of the purchase of the new, expansive property.
This purchase comes during a spree of other property sales to regional companies. The $3.8-million payout is more than the $3.3 million spent by Fastenal subsidiary Rock, LLC, on lots for the company’s new downtown office, as well as the $1.9 million spent on the Hardee’s lot located on Main Street, to be used for a new building that will house commercial and residential uses along with a Montessori preschool that will be associated with Winona Area Catholic Schools.
Ever since the Kmart store closed, Winonans have been talking about what might replace it. Winona Economic Development Director Lucy McMartin said her staff discussed potential developments with multiple interested parties before Gundersen’s purchase this summer. “It is a prime spot on the highway, and we look forward to working with the entity that bought it to see a development on the site,” McMartin said. “It will be good to see it occupied. It has been vacant for quite awhile,” she added.
It is unclear whether the property will remain on the tax rolls. Not-for-profit health care corporations such as Gundersen Health System are typically exempt from local property taxes. However, McMartin noted that Winona Health pays some property taxes. She referred further questions about the former Kmart property to Winona County Assessor Steve Hacken, who was not immediately available for comment.