Landmark project to bring distillery, upscale apartments to downtown | Local News

The region’s first micro-distillery, featuring locally produced whiskeys and gins, a cocktail lounge, an event center and 33 upscale apartments highlight a $12 million development planned for downtown Mankato.

The project is centered on a complete renovation of the 102-year-old Landmark Building at the corner of Main and Second Streets and will include a four-story expansion and construction of a fourth floor on the existing building. Work is tentatively set to begin in October and by spring could be tied into a major renovation of the City Center Hotel with a skyway connecting the two properties.

“The same architect is going to do the City Center Hotel, and I think it’s just going to make that whole area an impressive part of Mankato,” said developer Jon Kietzer.

Kietzer, the owner of Century 21 Landmark Realtors, has been exploring various options for the Landmark Building since purchasing it in 2014. The turning point came when he and his wife visited the Charmant Hotel, a boutique hotel that had transformed a former candy factory and furniture store in downtown La Crosse, where they lived for several years before coming to Mankato.

“We knew what that building looked like before and were flabbergasted,” he said, adding that they tracked down the creative force behind the Charmant — The Kubala Washatko Architects Inc. of Cedarburg, Wisconsin. “And we called him and said, ‘Let’s do something like this in Mankato.”

The firm completed preliminary designs for a 60-room Landmark Hotel and for a dramatic renovation of the aging City Center Hotel next door, presenting the plans to the city of Mankato in February of 2020. The arrival of the COVID-19 pandemic forced a change of plans.

Kietzer said he expects the City Center Hotel renovation to move forward largely as planned, possibly as soon as next spring. The project is a partnership with Tim Rutjes of Slowey Management, which operates about a dozen hotels, mostly in South Dakota. And Kietzer said the modernization of the hotel is likely to be on a similar scale to what was proposed 18 months ago. Designs at that time showed 144 renovated rooms accompanied by the creation of a large outdoor courtyard where the pool area now is located and a rooftop bar and restaurant.

But lining up financing to create a new boutique hotel in the Landmark Building proved problematic after the economic upheaval caused by the pandemic.

“Banks to this day are still pretty skittish on hospitality,” Kietzer said.

That prompted the switch to upscale housing, and Kubala Washatko Architects went to work on the revised plans.

“We wanted it to be as impressive as the hotel would be, so it took the architect some time to put the sketches together and come up with this plan,” he said.

The addition on the northwest side of the Landmark Building will increase the length of the building by about a third, bringing it up against the alley between Main and Walnut streets. The new fourth floor will include apartments with a private garden terrace on the Main Street and Second Street sides.

The third-floor apartments are set to have extra-high ceilings in the main living space with lofted bedrooms. Kietzer said rents are expected to range from about $1,500 to $2,500 a month for the apartments, which include 21 two-bedroom units, seven one-bedroom and five three-bedroom.

At least some heated underground parking will be offered to tenants in the ramp below the City Center Hotel.

“I think there will be some seniors and I think there will be some young professionals — a mix of those two groups,” Kietzer said of prospective tenants.

The skyway connection to the hotel, which is already connected by skyways to the civic center complex and downtown parking ramps, will be an attractive feature for both the tenants and patrons of the micro-distillery, according to Kietzer. People can park their car once and have convenient access to drinks, dining and civic center events.

The ground-floor space in the Landmark Building will be leased to a local entrepreneur who will operate the craft distillery, cocktail room and event center. Reached by The Free Press, the Mankato man said he wanted to hold off on public comment until deals are finalized on the project.

But he said his plan is to produce whiskeys and gin initially with vodka being added in the future in the 3,300-square-foot distillery. The 2,350-square-foot cocktail room will include outdoor seating along Second Street. And the adjacent event center will be marketed for weddings, parties and smaller-scale live-music performances.

City officials just received the redevelopment plans and are in the earliest stages of reviewing zoning, parking and design compliance, according to Community Development Director Paul Vogel.

The initial impression of the architectural designs was positive, with Vogel noting that some of the building’s original features are being restored.

“Taking the windows to their full height, some of those sorts of thing,” he said. “A very attractive development.”

Kietzer said he is exploring whether some elements of the project will be eligible for tax-increment financing from the city, which involves capturing a portion of the additional property taxes created by a redevelopment project and returning them to the owner to help cover construction costs.

Vogel said the project does mesh with the city’s goal of promoting more downtown living.

“Housing in the city center is a priority for us as far spurring that type of development,” Vogel said, adding that the question of city subsidies would be answered later. “… Let’s get through the zoning and planning issues first.”

City leaders have also been hoping to see more hotel rooms added downtown, so the loss of the boutique hotel is a disappointment.

“When we get the conventions with 600 or 700 people, we don’t have enough rooms downtown here to accommodate everybody,” said Mayor Najwa Massad, the longtime caterer for civic center events and a founder of the downtown restaurant Olives.

The prospect of more downtown residents, however, is appealing, Massad said. And the distillery will add one more attraction to draw people to the city center where they’ll also patronize other nearby businesses.

Kietzer is the second developer to shift focus from a hotel project to downtown apartments since the pandemic hit.

A $14.2 million downtown Marriott hotel above the Cherry Street parking ramp received zoning approval in March of 2020 with a vote on final approval slated for the following month. Developer Gordon Awsumb has since put that project on hold and is currently pursuing a five-story 44-unit apartment building on the Jackson Street side of the Mankato Place Mall.

The Free Press reported in December that another downtown hotel project was also in the planning stages by a Rochester developer who intended to construct a 100-unit Home2 Suites just east of the historic Mankato Post Office, which was to be turned into a wedding venue and events center. Vogel said the city has not seen any specific plans come forward on that project.

Kietzer said he doesn’t expect his apartment building will undermine Awsumb’s plans, predicting the momentum for downtown investment — including downtown housing — will grow with each new project. He credited those who invested in downtown development when the city center was moribund, which has led to a spate of new buildings such as the Profinium Place, Eide Bailly Center, PrairieCare and Bridge Plaza.

“That’s a lot of development in a short amount of time, and I think it will change people’s thoughts of downtown Mankato,” he said. “And I would expect that to continue on, now that the groundwork has been laid by the people who started it and took a pretty large risk at the time they did it.”