New buildings

The old Hardee's restaurant, left, and the former Budget Mart gas station will be torn down to make way for two new buildings, one 7,000 square feet and the other 3,500 square feet. (Al Strain/People's Press)

OWATONNA — The south end of Oak Avenue in Owatonna is going to be getting a makeover after a lot between Barney Street and 13th Street has sat vacant for a number of years.

The lot — currently home to an abandoned Hardee’s and a vacant Budget Mart gas station — is set to be redeveloped after the Tailwind Group, a group based out of Mankato, purchased the property.

The deal wouldn’t have been finalized without help from the Community Development Office from the City of Owatonna. The city will use Tax Increment Financing (TIF) to help fund the demolition of the two buildings, which has stood in the way for others who were interested in developing the property in the past.

“Usually it’s not a feasible project for them to do it all on their own,” said Community Development Director Troy Klecker. “That’s where we partner up with them and try to get the project going.”

Once the redevelopment is done, the property will consist of two buildings, one 7,000 square feet and the other 3,500 square feet, according to a memo to the Owatonna City Council. The buildings will be for commercial use for multiple tenants, almost like a strip mall.

“It’s going to be multi-tenant, but more for office use,” Klecker said. “It’s not your traditional strip mall where you’ve got a bunch of store fronts. This will be a little different.

“If I had to call it something, it would be more of a professional building with multiple tenants.”

Klecker said it’s not yet clear how many tenants the buildings will have, but each tenant will have its own space with exterior access.

Attempts to reach the Tailwind Group were unsuccessful.

According to the memo, the TIF will be for $220,000 and will be paid back over a 15-year period. The money will be given to the developer for the demolition, along with a realignment of Barney Street so that it lines up better with Oak Avenue. Both projects will be completed by the city.

“Rather than coming straight in to Oak Avenue where it intersects at a really odd angle, we’re going curve it a little bit and bring it in at a 90-degree angle, which is how you want to design a street,” Klecker said.

Before the TIF is approved, the public will have its say on the matter. A public hearing is scheduled for the council’s fourth meeting of the year on Feb. 19.

If the TIF is approved, there are still other steps that must be taken before demolition and new construction can begin, including some possible zone changes and re-platting.

The new buildings help continue the city’s efforts to rid itself of vacant buildings. The new businesses, whatever they happen to be, will join a section of town that has seen a lot of growth in recent years.

“This is a good site, and we’ve had different businesses look at it, but they’ve always come to the stumbling block of tearing down the buildings to make it work,” Klecker said. “It is a highly traveled road, it’s one of our busiest. That’s always a plus for businesses. That area ... is becoming a really good commercial area that is becoming a draw.”

In recent years, the south end of town has seen a new bank, a Walgreens, a new Hy-Vee store and Federated Insurance take over the old mall. A Fareway grocery store is also going in the location currently occupied by the old Owatonna Hospital. Fareway was granted TIF funding for it’s demolition of the old hospital.

Owatonna Mayor Tom Kuntz said he was excited to have a vacant property being put to use better use in Owatonna.

“I think any time that we can take some buildings that have been sitting vacant for numerous years and turn them into a project that is going to bring income and revenue into our community, it’s great,” Kuntz said.

President and CEO of the Owatonna Area Chamber of Commerce and Tourism Brad Meier said the redevelopment project is a good use of TIF money.

“From the standpoint of using tax dollars and putting money back into that site, this is a good use of TIF,” Meier said.

The $220,000 from the TIF will be repaid through property taxes. The tax rate will be based on the land value and some building value. Kuntz said it is fortunate that the city council supports the use of TIF funds.

“Cities don’t have a lot of tools in their bucket to attract new businesses and get rid of old stuff,” Kuntz said. “One of the few tools that we do have is the TIF and the redevelopment TIF.”

Klecker said the developer is hoping to begin demolition in the spring. The impact of any demolition or construction work on traffic should be minimal, as most of the work can be done on site.

Reach reporter Al Strain at 444-2376 or follow him on Twitter.com@OPPalstrain

Reach reporter Al Strain at 444-2376 or follow him on Twitter.com@OPPalstrain

I am a reporter for the Owatonna People's Press covering cops, courts, the city beat, business, agriculture and features. I graduated from Wartburg College in Waverly, Iowa in May of 2012. While in college I majored in Communication Arts with an emphasis

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