Big box developments moving forward; Nupa restaurant closes, winery on hold

Mar. 7—Skyrocketing lumber and steel prices and uncertainty over the economic fallout from the pandemic brought a pause to some development plans, but several others are underway or moving ahead this spring in the local area.

Developers are hopeful they'll soon be able to publicly announce plans for redeveloping some empty big box stores in Mankato. Housing and apartment units keep going up. A new truck center and truck stop are soon to break ground and some other buildings, including Studio Five in Old Town and Frandsen Bank in North Mankato, are nearing completion.

The city recently lost a restaurant — Nupa Mediterranean Cuisine — 19 months after it opened, due to a dispute over lease terms. A Christian Radio station based in Blue Earth is opening a studio and offices in Mankato.

Uncertainty

Kyle Smith, of Tailwind Group in Mankato, said that while there are several projects moving ahead in the area, developers are still waiting to see how things shake out after the pandemic.

Smith, who led several projects in Mankato and works with developers around the country, said the start of the COVID pandemic one year ago stalled planning on projects.

"Everybody pushed pause at the same time. Some (states) came back sooner, some came back slower."

He and others are waiting to see what fallout comes in the coming year. "There's pain coming in retail and some in restaurants. With office (space) it's too soon to tell."

Contractor Mike Drummer said soaring lumber and steel prices have pressured builders.

"Lumber prices have really escalated. There were some residential or multifamily projects that were stopped last fall with the hope that lumber prices would go back down, but they've gone up more."

Softwood lumber prices are now about 112% higher than they were a year ago and have jumped 10% in just the past couple weeks, according to Random Lengths, a group that tracks the wood industry.

Part of the increase is a huge demand in lumber in the past year as historically low interest rates spurred home building and people stuck at home took on a variety of home and outdoor projects.

Prices were furthered juiced as lumber companies in 2019 misread the market for 2020 and cut back on production.

Drummer said low interest rates continue to be the savior.

"With the interest rates as low as they are, construction is good. But with lumber prices high it makes building more expensive."

Steel prices are also very high, impacting things like garage doors and windows.

Rental housing remains in strong demand. "Unfortunately we're not seeing much in the way of affordable housing," Drummer said.

Building affordable housing has largely relied on federal and state tax credits, for which cities fiercely compete.

Drummer said much of the residential and some commercial construction remains focused on the east side of Mankato

He's working on a new residential project along old Highway 14 (Madison Avenue), southeast of the County Road 17/12 roundabout.

"Patio and single-family homes and a small commercial node."

Drummer said he hasn't heard of much commercial development coming.

"Commercial is tough. You have to get through all the empty buildings and then it should tick back up. The old Gander Mountain, Shopko, Herberger's, Sears — if you can get them repurposed, we'll do good."

He noted a new addition on the east end of Madison East Center isn't filled. "They had interest in them but then COVID hit," Drummer said.

"All the land in front of Fleet Farm is for sale but there's nothing in the works yet."

He said residential construction near Prairie Winds Middle School continues strong. Drummer opened an 11-lot subdivision next to Pillars Senior Living. "They're slab-on-grade, senior townhomes. They're going fast."

Other developers working in that area are also seeing good demand for residential lots.

Nupa closed

Nupa Mediterranean Cuisine, which opened in June of 2019, is closed, the victim of a substantial increase in proposed lease costs, says the owner.

Ted Paizis, who runs the successful Nupa in Rochester, had franchised the Mankato location, which is on the east edge of town, east of Highway 22 behind Kohls.

Paizis said the franchisee struggled and Paizis took the Mankato restaurant over, signing a one-year lease on the building, which is owned by a group of investors.

When the renewal came up this month Paizis said the building owners wanted an 80% increase over what he was paying.

"They're trying to get $10,000 (a month) for that location. I said that's outrageous. It's a tough location, it's too out of the way."

Paizis said it's possible he could get a new franchisee to reopen a Mankato location, but said he won't be opening one himself as he is trying to expand into the Twin Cities.

Big boxes reuse

Some empty big box store buildings are moving closer to getting new life.

Drummer has purchased the former Shopko building on Madison Avenue and he hopes to soon announce his plans for a redevelopment of the property.

Last year, Carrington Company of Eureka, California, purchased the former Gander Mountain/Gordmans property, next to Highways 14 and 22 and near the hilltop Hy-Vee.

The commercial development company has properties in 18 states and focuses on redeveloping vacant properties. In previous projects Carrington converted big boxes for businesses including Rite Aid, Ace Hardware and Big 5 Sporting Goods.

Chad Christensen of Carrington said they are pushing ahead with plans for the Mankato property.

"We're exploring all options and aggressively seeking a particular path."

Besides reusing the existing buildings, development plans are likely to include using space in the large parking lot area for other businesses to locate. Carrington has paid up all the taxes on the property.

Frandsen/Studio Five

Frandsen Bank hopes to move into its new building on Belgrade Avenue in North Mankato around June 15.

The bank is moving from its current location across the street.

The project fills a space — where a former convenience store once sat — the city had long hoped would be redeveloped.

Bank officials said their current location served them well but is no longer designed for the changes in how customers do banking.

Developers have been eyeing potential redevelopment of the current Frandsen location.

The largest private investment in Mankato's Old Town business district in a half-century is getting nearer completion.

The $3.2 million Studio Five building will bring a pair of ground-floor commercial businesses and 17 apartments to the 500 block of North Riverfront Drive.

The redevelopment project included demolishing the old Stephen Cleaners and Laundry building and a small convenience store. The new 13,690-square-foot three-story building will encompass those lots and all but the back of the parking lot next to the Wooden Spoon bakery and restaurant.

KJLY expanding

KJLY Christian Radio, heard in the Mankato area at 104.5 FM, is adding a KJLY studio site to be located at 860 Madison Avenue, the site of the former Lighthouse Christian Book & Gift Shop.

The station said the move comes after the station has been in its current building in Blue Earth for 40 years.

Under the name Kinship Christian Radio, the stations said it is expanding its evangelical Christian broadcast ministry and activities, events and outreach to the region.

From its beginning as a single FM station in Blue Earth in 1983, KJLY and Kinship Christian Radio ministry has grown to eight full power FM stations and 14 repeater stations covering most of southern Minnesota and Northern Iowa.

The new Mankato studio serves as a geographically central location to its legacy listeners and the newer service communities of Rochester and the western and southern suburbs of Minneapolis.

The new site will also provide expanded outreach and easier staff commutes to Kinship Christian Radio listening centers of Rochester, Owatonna, New Ulm and Marshall.

Truck center on track

A new semi sales and service business is moving ahead on 24 acres north of Adams Street on the far east edge of Mankato.

Jerry Goodburn, manager of the Truck Center Companies' Mankato location on Fourth Avenue, said they are eager to get the project going this spring.

"We've picked a general contractor and moving ahead. It's pretty exciting for us, we've been in this building 50 years."

They hope to begin ground work this spring and move into the new building next year. The expanded business will add about 30 employees.

Family-owned Truck Center Companies is one of the largest Freightliner dealers in the U.S. Founded in 1975, the dealership is in 18 cities throughout Nebraska, Kansas, Iowa and Minnesota.

Truck stop

Work is also set to begin this spring on a large truck stop on the far east edge of Mankato.

When complete, the sprawling new truck stop will feature a spacious lounge.

The 10-acre truck stop is being developed by the Trifecta Group, led by Steven Freyberg. A state study found the Mankato area has a shortage of places for over-the-road truckers to rest, and the new truck stop is to have 63 stalls for semi parking, eight diesel fueling stations and a truck scale. The project also includes a car wash and eight gas pumps for cars.

Winery uncertainty

The developer of a proposed winery said there is no news on the project due to the uncertainty of the effects of the pandemic.

Paul Neyers hopes to build North Star Winery on the site of a former concrete plant under the Highway 169 North Star Bridge.

Early last year, prior to the pandemic's start, he'd said he hoped to start the project this spring. He said this week he had nothing new to report on the fate of the project.