by CHRIS ROGERS
A deal for the city of Winona to buy some of HBC’s downtown property next to Main Street and Levee Park is in the works. The land is adjacent to 60 Main Street, the city-owned property colloquially known as the movie theater parking lot, which the city hopes to sell to private developers for the creation of a hotel-apartment complex. City officials did not give specifics on what they would plan to do with the HBC land, but mentioned parking or new developments as possible options.
The HBC properties in question are 67 Main Street, the former home of HBC’s Wizards IT support service, and the far eastern edge of 58 Johnson Street, HBC’s headquarters. The city already owns a small parking lot next to the Wizards building. In a legal notice, city officials indicated they were interested in “a portion” of the 58 Johnson Street property, but declined to describe how much. HBC CEO Dan Pecarina said it would be the far eastern side, from the Wizards building toward the river, where some satellite arrays and truck parking are located. He said that thanks to better fiber-optic networks, HBC no longer needs the satellites.
“We have property that we don’t need,” Pecarina said. “And that property borders Levee Park, and the city has done a great job with Levee Park, and if they would have a little bit of extra land there, that would be beneficial to some of the things they’re planning going forward. We want to help with that … The new retail, restaurant and entertainment — that’s all good for the vitality of the city.”
The city of Winona’s Port Authority Commission met in closed session Thursday to discuss making an offer on the properties and then voted unanimously to direct city staff to negotiate a deal with HBC. Asked why the city was interested, Winona Economic Development Director Lucy McMartin responded in an interview, “We have a lot of activity going on in that area, and we’ve always had close communication with [HBC]. So I guess if they’re going to be considering sale of that real estate, we would like to be actively involved in that, whether it be for temporary parking or other developments.”
Asked why the city wanted the land, Port Authority Commission Vice Chair Dana Johnson answered, “It’s what we’ve been doing as a Port Authority for years.” He continued, “Our job has been to assemble properties for the future … not knowing what that future use might be, but knowing that downtown is very important.”
Johnson is also the vice president for corporate real estate at Fastenal, which is nearing completion of a large office building two blocks west and two large parking lots downtown.
Asked about the city’s plans for the properties, Pecarina said, “I don’t know that the city has decided. It gives them some flexibility for things, whether it’s used for parking or some other things … I think having that property for them will help them in planning for the future and potentially help them with some of the developers that are looking at that area … If you can bring in some additional retail and restaurants and entertainment and family-type things in that area, it’ll just expand the use of Levee Park, and that’s what we’re looking to participate in.”
McMartin: Could help replace 60 Main parking
The HBC properties are right across Main Street from 60 Main. The Port Authority has been trying for several years to find a developer to build a hotel-apartment complex on the city-owned parking lot there. In January, the Port Authority Commission voted to enter exclusive negotiations for such a development with the Wisconsin-based general contractor leading the construction of Fastenal’s nearby office, C.D. Smith Construction; Mike Gostomski and Peter Shortridge’s local historic redevelopment firm Latsch Development; and Mike Rivers’ local hotel company Rivers Hospitality.
While it’s located in a prime riverfront location, 60 Main is also a relatively small site for the scale of development city officials have hoped to see there. City officials and developers have been trying to secure more land. Earlier this year, C.D. Smith Senior Vice President Mike Krolczyk said his company was trying to find out whether neighboring properties not owned by the city could be included as part of the development. This summer, city staff and Krolcyzk said they have been negotiating with the Union Pacific Railroad in an attempt to acquire the rights to a portion of the rail yard bordering 60 Main and Levee Park.
Asked whether the city was interested in the HBC properties becoming part of the 60 Main development, McMartin said, “I don’t know if it would help with that directly, but because we are using a larger footprint, do we need some space for other amenities like parking?” The 60 Main project would eliminate scores of public parking spaces, and the city has faced some public pressure to replace that parking.
Deal would be latest in series of moves
If a sale goes through, the HBC properties would be the third big real estate deal the Port Authority has initiated in downtown Winona this year.
Early this year the city exercised its power to claim first dibs on former interstate bridge construction land “for public purposes.” The Port Authority purchased one parcel in order to control a piece of the surrounding city block that was up for sale, Port Authority President Mike Cichanowski said. Fastenal bought the rest of the block, and the city sold its parcel to Fastenal at cost: $30,000. Fastenal plans to use the block for parking for its new office.
In June, the city spent $580,000 buying up the former ProBuild office and parking lot at 165 West Second Street, kitty corner from Fastenal’s new office building. At the time, city officials said they planned to use the property for general parking, and in the long term redevelop the site. So far its only use has been as a construction staging area for Fastenal’s new office. The Port Authority leased the property to C.D. Smith in June.