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Condo sale derailed (04/17/2013)
By Chris Rogers

A deal to buy the unfinished McNally condominium and Tri-Mac Lumber property downtown on West Second Street will likely be aborted after emergency action by the city to halt development, owners say. At the urging of city staff, the City Council passed a moratorium banning any changes from current development plans at the site. Staff feared the area's unique, unrestrictive B-2.5 zoning could allow the condo to be turned into a high-density residential development with no parking requirements. Using emergency ordinance powers that allow the council to circumvent normal procedures, the city rushed to prevent any deviation from the 16-unit condo's current plan.

The reason for the emergency, City Attorney Chris Hood said, was to act before a development proposal was approved or a building permit was issued.

A lawyer for River Bank of La Crosse, which took over ownership of the property after a recent foreclosure, told council members that the bank had a deal to sell the property under the current zoning, but "this moratorium will probably squash that."

In tandem with the moratorium, the city will consider changing its zoning requirements to address staff concerns about parking and density. Rule changes that restrict development might make the property less attractive to potential buyers.

River Bank Attorney Brian Speuer addressed the City Council, saying that the city would have to approve building permits before the condo could be altered or even finished. "You're going to get a chance to look at this thing before it is approved," he said. Speuer went on to suggest that a moratorium would be arbitrary.

The building permit process does not give the city free rein to approve or reject an application.

City, bank still hush-hush

Speuer said that he did not know what the proposed use for the property was and the bank is keeping mum on who the would-be buyer is — or was.

City staff confirmed that they met with the bank about the property, and then discussed concerns that led to the emergency ordinance proposal. However, staff say they were not given any indication as to what the development might be or information about the would-be buyer.

"I think there is more not being said tonight than is being said," said council member Gerry Krage of the moratorium.

Bluff City Properties partner Kevin Brady attended the council meeting, explaining to the Winona Post that he was interested in development generally.

Zoning regret?

B-2.5 zoning only exists in one two-block section of downtown Winona. The district has no setback requirements or lot size restrictions. It also has no maximum density limit for properties, meaning that if other requirements —such as those in the fire code — were met, the 16-dwelling condo could be split into twice as many apartments or more. Part of the B-2.5 district, including the McNally property, is also in a downtown parking district that does not require any off-street parking for residences.

The uniquely unrestrictive B-2.5 district was created by the city in response to a rezoning request brought by McNally for the condo in 2008.

"There was an effort to tailor the ordinance to what was being proposed by McNally," City Planner Mark Moeller said. "There really wasn't a lot of thought given to the what if, [and] the alternative course of action."

The district was "probably poor planning," said Levee Park Committee member Mike Kennedy, who spoke at the council meeting. "They never thought McNally's condo and the lumber yard would be open for any sort of development anyone wanted […] including student housing."

New development halted

A 4-2 council vote enacted the moratorium. Council Members Pamela Eyden, Paul Double, Krage, and Mayor Mark Peterson voted in favor of the moratorium. Double said that under a moratorium, the council could still entertain development proposals, but "if we don't incorporate a moratorium into the process, we might end up with something that we can't change."

Council members George Borzyskowsi and Allyn Thurley opposed it, though both voted in favor of a separate motion to study the zoning district and staff concerns. Thurley said he disagreed with using an emergency ordinance for this issue. Borzyskowski said he would not support the moratorium after hearing from River Bank. "If somebody is out there to buy it, sell it," he said. "That's going to be a hell of an investment down there and I would hate to see that stopped."

Council Member Michelle Alexander abstained from the vote and discussion, because her real estate company had listed the property.

The Planning Commission will consider changes to the B-2.5 district and forward its recommendations to the council.

Concerns voiced for Levee Park

Eyden and Kennedy, who are both on the Levee Park Committee, raised concerns about how new development might adversely affect plans for Levee Park still in their infancy.

The committee, Kennedy said, is looking at the whole riverfront, from Huff to Walnut streets. The lumberyard is an integral part of that, he said. The committee would like its landscape architects to give their opinion on what development would be most beneficial to the park, Kennedy said, mentioning that there had been a lot of discussion of attempts to move the railyard adjacent to the park.

"Spot development in the middle of the future of Levee Park is not a good decision right now," he continued. "Any delay to clear up the unknown is, I think, in the public's best interests."

Eyden informed her fellow council members that she would support the moratorium because "Main Street, downtown, and the Levee Park initiative are too important. They are more important than any one single building." 


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