OWATONNA — The Daniel C. Gainey Conference Center in Owatonna is for sale.

Officials from the University of St. Thomas announced Thursday afternoon that the board of trustees has decided to put the Gainey Center on the market because it cannot continue to operate the center in “a financially sustainable manner.”

“It was an extremely difficult decision,” said Doug Hennes, vice president for university and government relations at St. Thomas. “We looked for ways to make it work financially.”

But, Hennes said, the center, which opened in 1982, has struggled financially over the past decade and has racked up annual deficits. Because of that, the university’s board voted Tuesday to put the 180-acre property on the market.

In a statement released by the university Wednesday, St. Thomas president Julie Sullivan echoed the difficulty the university had in making the decision, in great part, she said because of the relationship the university has had with Owatonna.

“We have had a great relationship with the Owatonna community, and we are proud of the services that we have offered over the past three decades,” Sullivan said. “Unfortunately, we don’t believe we can return the center to break-even status in a way that remains consistent with our educational mission, and we have determined the most prudent action is to sell the center.

Hennes indicated that the center would remain open while it is being marketed.

The 180 acres, which run from Highway 14 south to County Road 18 and from County Road 45 west to the Straight River, could be sold as one piece of property or could be sold as separate parcels, Hennes said. A price for the property has not been set, Hennes said, and different brokers have given different valuations.

The board has not yet chosen who the broker will be, he said.

Although no timetable has been determined, Hennes said he expects the property to be on the market soon, most likely by spring.

“It’s difficult to tell how long it will take to sell it,” he said. “It could be a year, could be two years.”

Owatonna Mayor Tom Kuntz, who said the news of the sale of the Gainey Center came as a shock, said that he hopes that the university will be able to sell the entire 180 acres together rather than break it up into parcels.

“It’s another challenge to try to resolve and find a fit for it,” Kuntz said. “It’s another sad day for Owatonna.”

Yet the mayor added that the city’s economic development team would put their heads together and find a buyer for the property.

The historic property was developed by Daniel C. Gainey and still bears his name.

Gainey moved to Owatonna in 1922 to work for Otto Josten, who owned a watch repair and jewelry store. Within six months, Gainey had become the general manager of the store. He eventually bought the business and embarked on an expansion in which Jostens became a leading producer of class rings, yearbooks, graduation announcements and diplomas. He served as president and CEO of Jostens from 1933 to 1968, when he retired.

He purchased three farmsteads — the 180 acres on which the center now sits — beginning in 1939. The house — a French Norman structure — was designed by architect Edwin Lundie and completed in 1957.

Upon Gainey’s death in 1979, the property was willed to St. Thomas University, whose president at the time, Monsignor Terrence Murphy, was a friend of Gainey’s. With gifts from the Gainey Foundation, the Jostens Foundation and the Owatonna Foundation, the university constructed the $1.5 million conference center.

The center opened its doors in August 1982.

Various businesses, non-profit organizations and government agencies used the center for retreats and planning meetings. One of the center’s biggest clients in the 1990s was Honeywell. But when Honeywell was acquired in 1999, the company moved its conference operations to New Jersey, thus impacting the traffic in and out of the Gainey Center.

“It was a big hit,” said Hennes. “We never found a corporate partner to replace that.”

The impact was so great that a planned expansion at the center was put on hold.

And as the years wore on, business at the center diminished.

“The conference services market has really stayed soft,” said Hennes. “We were sustaining losses every year.”

Over the years, St. Thomas has been involved in numerous community projects, including Music in Owatonna, a civic group that has sponsored performances at Gainey. The first two festivals, in 1990 and 1992, had a classical music theme, and subsequent festivals featured sacred, Irish, blues, country, big band, jazz and, most recently in 2012, bluegrass music. St. Thomas joined with Owatonna for its sesquicentennial celebration in 2004 to host the Minnesota Orchestra in a Fourth of July concert on the Steele County Fairgrounds.

In the late 2000s, St. Thomas considered the establishment of a wildlife art gallery at Gainey to recognize the work of Owatonna and southern Minnesota artists, several of whom started their careers as commercial artists at Jostens. The gallery concept failed for lack of funding.

In 2011, the Winton Guest House, designed by world-renowned architect Frank Gehry, was moved from its Lake Minnetonka location to Gainey, where it was renovated and dedicated. University officials announced Thursday that St. Thomas will retain the ownership rights to the Gehry house, either on the Gainey property or on a new site.

Reach Managing Editor Jeffrey Jackson at 444-2371, or follow him on Twitter.com @OPPJeffrey

Jeffrey Jackson is the managing editor of the Owatonna People's Press. He can be reached at 507-444-2371 or via email at jjackson@owatonna.com