In 2017, architects drafted this artist’s rendering of Sherman Associates’ proposed apartment complex at 60 Main Street, seen here from the entrance to Levee Park at Main Street.
Image courtesy of BKV Group.

Downtown hotel canceled; 60 Main on hold


(1/2/2019)

by CHRIS ROGERS

The city of Winona’s chosen developer for the 60 Main Street project no longer wants to build a downtown hotel — at least not right away — and the entire redevelopment project is on hold months longer than expected, waiting for the developer to proceed.

“We are eagerly waiting for the developer to deliver a set of drawings and come in and talk to us about the next step for the project,” city manager Steve Sarvi said. “I was hopeful we would have something this fall. I know he’s really busy,” Sarvi added.

Sarvi stated that the developer, George Sherman of Sherman Associates, is no longer interested in developing a hotel as part of the project. Referring to the under-construction Fairfield Inn at Mankato Avenue and Highway 61, Sarvi reported that Sherman told him, “The economy changed. You built another hotel.”

Not to be confused with Bob Kierlin’s Main Square Community — the upscale apartments, commercial spaces, and preschool currently under construction at Fifth and Main streets — the 60 Main Street project seeks to redevelop the city-owned parking lot just north of the Winona 7 cinema into commercial spaces and high-end apartments. A downtown hotel was high on the city’s priority list in April 2017 when it interviewed three prospective development firms, and part of Minneapolis-based Sherman Associates’ original plan when the city’s Port Authority Commission selected it over the competitors. Of the three proposals, Sherman Associates’ included the smallest hotel and the least amount of public parking: 94 apartments and 60 hotel rooms built above a 169-stall parking garage with 45 parking stalls reserved for public use. The city-owned parking lot currently provides 128 public stalls. However, other developers asked the city to help fund the multi-million-dollar cost of a public parking ramp at the site; Sherman Associates asked for less financial assistance and had an impressive resume of riverfront development projects in the Twin Cities, Des Moines, and Duluth.

The Port Authority Commission formally selected Sherman Associates in May 2017, with the understanding that Sherman Associates’ George Sherman and city staff would negotiate the details of a development agreement to be formally approved by the Port Authority prior to construction. Those details included what, if anything, Sherman would pay for the land; whether the city would grant tax breaks in the form of tax-increment financing; and what exactly the final design of the new development would look like.

In October 2017, Sherman said that he wanted to finalize a deal with the city by June 2018 at the latest. A year-and-a-half after the Port Authority’s selection, the 60 Main Street project is still up in the air.

“We’re hopeful,” city manager Steve Sarvi said in an interview at the end of June 2018. The city had just celebrated the opening of the Levee Park + Main Street Gateway project. Children ran through the park’s new fountains for the first time, the city allowed food trucks for the event, and hundreds of people packed Levee Park for a free concert on the river. “We’re hoping to hear back from [Sherman] to see what the next step will be, but I can guarantee you we’ll send him drone footage from Sunday’s event.”

The prospect of attracting developers to 60 Main Street — immediately adjacent to the new park entrance — was part of what convinced the City Council to invest $2.4 million in revamping Levee Park. The expected development of 60 Main Street influenced the design of the park, with a large chunk of the project budget spent on the Main Street plaza. Artists’ renderings of the park design depicted a new restaurant and multi-story apartments at 60 Main Street opening onto the plaza.

Is Sherman still interested in the project? “We believe he’s still interested,” Sarvi told the Post in mid-December. “He hasn’t told us otherwise.”

Sherman Associates did not respond to interview requests.

It is unclear why the project has been delayed. Sarvi said that Sherman is looking into using “opportunity zone” tax breaks created by the new U.S. tax code last winter. “The developer is still trying to figure out exactly what that’s going to mean for him,” Sarvi said last June. Changing plans may have contributed to the delay, as well. The decision not to develop a hotel changed the project design, and city officials indicated that Sherman may have considered expanding the geographic scope of the project and trying to buy neighboring properties.

In any case, Sarvi stated that the city needs an answer soon. “I expect something will happen by January or February at the very latest. So we’ll have to see what [Sherman] comes up with and what our response is to that,” Sarvi said. “We have to quickly get into a development agreement if what we’re proposing looks like it’s going to meet the needs of the community,” he continued. Would the city change its plans for the project if it does not hear from Sherman? “I think we’d have to strongly consider it, yes,” Sarvi responded. “Unless there’s some really good reason it’s taking so long.”

The prospective loss of public parking caused some controversy when the city first announced its plans for 60 Main Street. In January 2018, the city released a parking study that concluded, after months of study, that downtown Winona had ample parking. However, since then, the Main Square Community development project eliminated additional public parking, and Fastenal announced plans for a 400-600-employee office building at the west end of Levee Park that would likely drive up demand for parking. Parking is a big deal for CEC Theatres Vice President Tony Tillemans, who said his firm is holding off on making improvements to the Winona 7 cinema until it sees what happens with 60 Main Street and downtown parking in general. “We’re kind of in a little bit of a waiting game,” he stated.

As for a downtown hotel, Sarvi stated, “We’re not giving up on it. We still think a hotel is warranted down there. But at the same time you have to listen to the developer. We shouldn’t force a hotel or something else on them that’s not going to work.” He said the city is hoping a hotel could be part of a future second phase of development at 60 Main Street or perhaps another development project.

Chris@winonapost.com

 

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