MANKATO — The two competitors looking to purchase the former Mankato fire station on Madison Avenue haven't changed since August, when the city council opted to go with the large developer over the car repair man.
But then the winning Tailwind Group proposal for the use of the former Fire Station No. 2 changed dramatically in the past six weeks — from first-floor commercial/second-floor apartments to a large day care facility over the entire space. That prompted the council, acting as the Mankato Economic Development Authority, to take a second look Monday night.
Despite some discomfort, a 4-2 majority of the council gave final approval to the Tailwind plan, partly because neighbors said a day care sounded better to them than an apartment building.
"When I heard a day care was coming in, I was very happy," said one elderly resident, noting that it will run from 7 a.m. to 7 p.m., five days a week rather than house tenants 24 hours a day. "I said, 'I can go over and rock babies.'"
The two plans were presented to the council in August, and council members unanimously decided to delay a decision to see if neighbors had a clear preference.
The two plans — one by a small car repair business and the other by the city's most active developer of office and apartment space — were both appealing to the council.
City staff recommended the Tailwind proposal, citing compatibility with the nearby residential neighborhood. Tailwind Group, which started as a rental housing and apartment developer has since become perhaps the city's most active commercial developer and is the force behind the trio of multi-story office buildings under construction between Riverfront Drive and Front Street downtown.
Tailwind offered to pay $215,600 for the station, substantially less than the $350,000 offered by Nick's Car Care, but promised to put at least $550,000 more into the building to create two office units on the ground floor with nine apartments on the station's second floor.
The day care plan includes the same purchase price of $215,600, but the renovations will now total nearly $1.1 million. Nonetheless, the assessed value of the day care is projected to be no more than $975,000 — less than the nearly $1.5 million expected valuation of their previous proposal.
The lesser value is "partially due to the manner in which residential units are valued by Blue Earth County," according to a staff memo to the council. In addition, the higher renovation costs for the day care involve more extensive asbestos removal, the need to install an elevator and more exterior finishing work that doesn't necessarily translate in to a higher assessed value, the memo stated.
Nick Zuehlke, owner of Nick's Car Care, said he would consider future spending of up to $200,000 for second floor improvements that would allow him to lease the space for offices. But unless those improvements were made, the day care proposal will pay about $10,000 more a year in taxes than a basic auto repair shop.
The majority on the council cited the apparent neighborhood support for station becoming the new home of the Little Stars Early Learning Center, currently located on Second Street downtown.
Mayor Eric Anderson and Councilman Jason Mattick said the plan had changed too much for their comfort. Mattick said he disagreed with a supporter of Zuehlke that Tailwind had done a "bait and switch," but said he thought the request-for-proposals process should start from scratch.