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January 23, 2015

WSN buying empty Home Design Studio on W. Circle Drive

After being empty for years, new life is on the way for a former home construction showroom in northwest Rochester. 

Widseth Smith Nolting, a Crookston-based engineering and architecture firm, announced this week it has signed a purchase agreement to buy the former Home Design Studio from Rochester's Event Studio LLC. The 32,000-square-foot complex is located at 3777 40th Ave. NW, along West Circle Drive.

HomeDesignDusk2-10x8_editedThe sale is expected to close in March with a build-out beginning in April, according to WSN. The plan is for WSN to move its increasingly crowded Rochester office into 11,000 square feet of the building by August.

"We are absolutely shoe-horned in here," said Brian Carlson, WSN's director of business development, of their current 4,500-square-foot office at 6301 Bandel Road NW. "We need to provide the space and resources for our team members to do what they do best."

WSN opened its Med City office in 2009, when it merged with QED Engineering. In 2014, it merged with Rochester's Kane and Johnson Architects. WSN now has 20 employees based here. WSN has a total of seven offices and 200 employees in Minnesota and North Dakota

The firm plans to lease the rest of the building to other tenants, probably to other professional offices. This is a very different fate than was expected for the Home Design Studio building. It opened for the first time in 2006 at the height of the construction boom, which imploded soon after.

It was designed by Kane and Johnson Architects as a home builders' showroom with model kitchens, bathrooms and other room layouts. Lead by local contractor Jerome Bigelow, a group of 13 owners optimistically launched the operation with a grand party attended by hundreds of Rochester business leaders. It had 59 people on staff working for a variety of construction-related businesses. The last occupants moved out in April 2012.

Event Studio LLC, of Rochester, then bought the unique complex from Partnership 10, of Byron, in 2013 for $1.3 million. Event Studio lists Rochester developer Dan Penz as manager on its incorporation documents.

Then in 2014, WSN began the search for a larger space in Rochester.

"We looked at lot of different buildings all around the city. We really like this building," Carlson said. "We liked the exposure. We liked the location and the ability to have our whole team in one spot."

January 20, 2015

Rochester's Maple Manor sold for $3.5 million

The Blum family's history has been interwoven with Rochester's Maple Manor Health Care and Rehabilitation since its doors opened in late 1964. 

That changed last week, when Pat Blum retired after 36 years as an administrator, and the family sold the nursing home at 1875 19th St. NW for $3.5 million. Pritok Capital of Skokie, Ill., purchased Maple Manor. Pritok now owns seven small senior facilities across the country, including one in St. Cloud.

"It's time to step aside, but it's a sad goodbye," said Blum. "I have mixed feelings obviously. You're talking about moving on from something that has really defined me for 50-plus years of my life."

MaplemanorIt all started when Pat's parents, David and Dorothy Blum, with the help of their six sons, began managing the facility on the first day its doors opened. In fact, the whole family lived and worked there for a year as it was getting going.

"It was all hands on deck back then," said Pat Blum, laughing as he remembered telling school friends that he lived in a nursing home. "Nursing homes used have a lot more families involved in running them."

After he graduated from college and earned his administrator's license, Pat began working at Maple Manor in 1978. His parents retired in 1981.

A new administrator, Karl Swedberg, took the reins last week. He has known the Blums professionally for 17 years and is familiar with Maple Manor.

"We're really excited to be in Rochester. I don't expect any big changes immediately for residents or the staff," Swedberg said.

Maple Manor has more than 100 full-time and part-time employees on staff.

"This is a good match for us. They really 'get' it," Blum said of Pritok.

Pritok is coming into the Rochester market during a senior living building boom, with several new facilities, such as River Bend Assisted Living and The Waters on Mayowood, opening and almost all of the existing ones in the area expanding. Being near Mayo Clinic makes Rochester very attractive to the more than 77 million baby boomers, born between 1946 and 1964.

While the Blums are no longer involved with Maple Manor, that doesn't mean they are done with senior care. In 1981, the Blum brothers realized when residents were discharged, "They weren't getting enough support," Pat said. That drove them to start Comfort Health, one of the first home health-care programs in the area.

The family still owns Meadow Lakes Senior Living in Rochester and Prairie Meadows Senior Living in Kasson. Pat still has responsibilities at Comfort Health, which is run by his brother, Chris Blum. Another brother, Pete Blum, still handles the finances of Meadow Lakes and Prairie Meadows.

"I'm still working toward being totally retired," Pat said. "The irony is that my wife just recently graduated as a nurse."

January 15, 2015

Roch. start-up licenses virus to pharmaceutical giant

An international pharmaceutical giant has signed a deal to license a cancer-killing virus from Rochester drug company.

MedImmune, which is owned by London-based AstraZeneca, is licensing a genetically engineered strain of the vesicular stomatitis virus from Omnis Pharmaceuticals. Omnis is a Rochester start-up founded by Dr. Stephen J. Russell, Dr. Kah-Whye Peng, Shruthi Naik and Mark Federspiel, who all work at Mayo Clinic in Rochester. A fifth founder, Glen Barber, is based at the University of Miami.

The companies now will collaborate to combine the Omnis virus with a check point inhibitor created by MedImmune. The goal is to eventually create a treatment for types of cancer affecting the liver, but potentially could be developed to treat a broad array of cancers.

"For us, it's a very big and very important step forward," Omnis CEO Russell said. "Essentially, we have AstraZeneca/MedIummune saying, 'We love this lead product of yours. We want to pick it up, cover the development costs and run with you to bring it to market.' That's a huge accelerator for this development program."

He explained that oncolytic viruses, similar to the one MedImmune is licensing from Omnis, have been found to be effective in destroying cancer cells. Many companies, in the U.S. and internationally, are working on their own treatment based on viruses.

"That's why they're excited about this virus. They can inject it directly into a tumor and kill tumor cells. That wakes up immune system, which adds to the attack," Russell said. "Then if you get the check point inhibitor antibody, the hope is that will lead to major tumor destruction."

This collaboration could mean a lot to Rochester. The US cancer vaccine market was estimated in 2012 to be worth about $14 billion. With about 1.5 million Americans being diagnosed with cancer every year, that market could possibly grow to reach $20 billion by 2020.

While the companies declined to release any financial details of the deal, it's clear the upfront payment portion of the agreement has given Omnis a boost to pursue its own goals, parallel to MedImmune project.

"Our obsession, if you like, is to develop viruses that could be given as systemic intravenous anti-cancer therapy," Russell said.

This virtual start-up, which was founded in late 2013, is "based" on the first floor the Minnesota BioBusiness Center in downtown Rochester in the facilities of Imanis Life Sciences.

Imanis is a related company that was founded by Russell, Peng and Dennis E. Young. It launched in the Mayo Clinic Business Accelerator on the second floor of the building and soon leased 1,736-square-feet of space for its offices and a "wet lab." Imanis makes genetic tracking agents for use in medical research. It also does medical imaging and conduct experiments for clients.

Russell said while Omnis has a lot of potential to break new ground scientifically, Imanis is the more likely candidate to grow into a economic driver and job creator in Rochester.

"That company (Imanis) will probably grow to occupy a fairly large footprint. This company (Omnis) is less likely to arrive at that point," he said.

In 2015, Peng said, "We hope to build it faster to up to 30 to 50 people as we do more manufacturing. We hope to be able to keep it in downtown Rochester. This is our home."

The group also has a third virtual start-up company called Magnis Therapeutics, which is working on a cancer treatment based on the measles virus.

Having three companies with names that end in "-nis" seemed like a good idea at first, said Russell with chuckle. But now, he admits it might be a bit confusing.

New name goes up on downtown Rochester landmark

A downtown Rochester landmark now is sporting a new name.
 
A new sign for the Morgan Stanley Center went up on Wednesday at 201 S. Broadway, the former Lanmark Center.

01142015morganstanleysign"When we renewed our lease, we asked about the naming rights of the building," said David Olson, who is in charge of Morgan Stanley's Rochester branch. "People agreed it would make sense for it to be the Morgan Stanley Center. We're really excited about it."

Morgan Stanley has been based on the second floor of the 65-year-old building for the past 15 years, he said. However, a lot of people weren't aware it was there.

"Now," Olson said, "People will know where we are."

While many financial companies have moved out of downtown in recent years, Morgan Stanley decided not to follow them.

"It's kind of fun being here right at the heart of it, here at Broadway and Second. With DMC (Destination Medical Center) and all of the developments, it makes sense to stay," he said.

As part of the change, Morgan Stanley has made some changes to spruce the building and the office up. Olson said he expects to host an open house in the spring to celebrate the new name.

The name, Lanmark Center, originated from Lanmark Property Management. That firm was owned by Rochester developer Gus Chafoulias, who also owned the building from 1998 to 2003.

In 2003, GAC Development sold the 34,384-square-foot complex to MK Lanmark LLC for $7 million. MK Lanmark is owned by real estate investor Mark Kramer, of Iowa.

The building is known to older generations of Rochester residents as the former F. W. Woolworth Co., which opened there in January 1950.

Before Woolworth, that site had housed the historic Cook Hotel. The Cook Hotel, which was built in 1869, burned in February 1946. It was demolished in 1949.

January 12, 2015

Downtown coffee shop to re-launch on Tues.

The new owners of a downtown Rochester coffee shop are planning for a soft re-opening under a new name on Tuesday.

Press Coffee and Tea Lounge at 315 S. Broadway abruptly closed in late December when its then-owner, Chris Holloway, was arrested and charged with one count of felony third-degree criminal sexual conduct.

Now, a group of local people have banded together to re-launch the popular downtown spot as Café Steam. The new owners include: Hunter and Traci Downs; Dr. Nathan Staff and wife Kaya Garcia; and David Hewitt.

Hewitt is known for being involved with a variety of Rochester businesses, like Mama Meg's homemade ice cream sandwiches and the nearby co-working site called The Cube. The Downses also own Area Ten Labs, a Rochester technology firm.

"It had become such a community meeting place. I've had so many business meetings there and have met so many friends there. Students go there to study, often in the evening," said Hunter Downs. "For us, this is about bringing that back to the community."

The former staff members of Press have been offered jobs at Steam, according to Downs. Some have accepted and will return.

"We still need more people," he said.

The new owners have been working feverishly in the past couple weeks to renovate the space and prepare a new approach. They hope to open the doors as Steam at 7 a.m. Tuesday, in time for the regular gathering of the BioAm biobusiness group. However, Downs cautions that it's still a work in progress with many details still being finalized.

"This is more about evolution than a revolution, at this point," he said.

The new owners are putting out a call for local artists to help them with artwork for the coffee shop's walls.

Like Press, Steam will serve a full array of coffee and tea. Though the new owners plan to eventually expand the food menu.

"We're taking it in a little bit of a different direction with more food options and some ice cream," he said.

The coffee shop originally opened in 2013, after Holloway raised the funds for it with a Kickstarter campaign. It's located in a 115-year-old brick building.

January 07, 2015

Firm with 3 Rochester hotels now employee owned

TPI Hospitality, which has three hotels and about 125 employees in Rochester, transitioned from the family-owned company to an employee-owned one at the start of 2015.

The Willmar-based firm owns the recently opened Homewood Suites, SpringHill Suites by Marriott and Courtyard by Marriott featuring the Saints on Second restaurant in Rochester. All of them are located near Mayo Clinic's St. Marys Hospital on Second Street Southwest.

545d8b3c2992e.imageIt also owns Days Inn, Holiday Inn Conference Center and Perkins Restaurant in Austin. TPI also owns a Perkins Restaurant in Red Wing.

Overall, TPI owns and operates 31 hotel properties and nine restaurants. It has six more hotels under construction. All of its properties are in Minnesota, except a Staybridge Suites hotel in Naples, Fla.

TPI Hospitality has been owned by the Torgerson family since it was founded as a retail business in 1930. In September, CEO Tom Torgerson surprised his employees by announcing he planned to transition ownership through an employee stock ownership plan.

“I chose an ESOP to reward employees for their past, current and future diligent service to TPI, to preserve the legacy of our work and position TPI for the next 50 years and beyond," he saidin a release. "The transition to 100 percent employee ownership not only helps to secure the future of TPI Hospitality as a locally owned and operated company but it also allows us to reward our almost 1,800 employees, many of whom have been with the company for over 20 years, with a superior retirement benefit”.

TPI says it is now one of the largest employee-owned hospitality companies in the country and it is on track to grow to become the largest.

“Becoming an ESOP will require a change in perspective by everyone. I envision an environment where every employee acts as an owner without regard for their specific role within the company. Just imagine the impact of having 1800 owners approaching their jobs the same way,” said Chief Operating Officer Mitch Peterson.

Cardio3 buys cancer-fighting firm for $10 million

Cardio3 BioSciences, which works closely with both Mayo Clinic and the City of Rochester, has paid $10 million for the oncology division of a New Hampshire firm.

The Belgium-based Cardio3 agreed to pay Celdara Medical $6 million in cash and $4 million in new shares for the division called OnCyte. Celdara could receive up to $50 million, if its lead product in-development CM-CS1 hLogo_cardio_3its specific development and regulatory milestones.

The same type of payments for milestones could also reach $21 million per product for others in the pipeline. If CM-CS1 reaches market and net sales top $1 billion, Celdara will receive up to $80 million in payments from Cardio3.
OncyteCM_png
This is Cardio3's second acquisition in recent months. In November, it purchased a virtual company called CorQuest Medical Inc. Corquest is developing a sheath to provide a minimally invasive way to insert therapeutic devices. The CorQuest technology platform is complementary with Cardio3’s C-Cathez and C-Cure systems. Financial terms were not released.

The OnCyte expands Cardio3's reach beyond regenerating cardiac tissue by entering into the rapidly growing immuno-oncology cancer treatment area using chimeric antigen receptor (CAR) T cells. OnCyte's CM-CS1 uses (CAR) technology to destroy cancer tumors. The Federal Drug Administration has cleared CM-CS1 to begin a clinical trial using patients with acute myeloid leukemia /advanced myelodysplastic syndrome and multiple myeloma. Juno Therapeutics, Amgen and Kite Pharma and others are developing products based on this concept.

In an interview with Bloomberg News, Cardio3 CEO Dr. Christian Homsy described acquiring OnCyte as “Our first foray into an area that is of very high interest… It opens a new reach, a new broad area of growth for the company that is of very high value to us and our shareholders.”

Those shareholders include Mayo Clinic, which held 3 percent ownership of Cardio3, as of Aug. 4. Mayo Clinic first acquired equity in Cardio3 in 2007, when it licensed stem cell research by Mayo Clinic's Dr. Andre Terzic and Dr. Atta Behfar. The cardiopoiesis technology uses to repair patients' hearts by re-programming their own stem cell to regenerate cardiac tissue.

When announcing the acquisition, Homsy said that four of Cardio3's top shareholders supported the move. A Belgium family-owned holding company called Tolefi SA is the lead shareholder with 32.23 percent of the shares. The Hong Kong-based Medisun, which is building an office in Rochester, owns 8.08 percent.

In the years since 2007, Mayo Clinic has developed a close working relationship with the Belgian company. Mayo Clinic is leading the U.S. clinical trial of Cardio3 and is using a lab in the Minnesota Biobusiness Center in downtown Rochester.

A possible deal is in the works for Cardio3 to occupy the entire fifth floor of the city-owned Minnesota Biobusiness Center. Gary Smith of the Rochester Economic Development Inc. said the company has not signed a lease yet and some financial details still need to be worked out.

If Cardio3 does decide to occupy the fifth floor, Mayo Clinic will need to move its staff that currently fills the space.

January 02, 2015

Green Mill restaurant closes

About 40 people lost their jobs unexpectedly on New Year's Day when Rochester's Green Mill Restaurant closed after eight years of cooking on the northwest side.

02012015greenmillclosedThe staff reportedly was not given any notice of the closing until company executives showed up on Thursday. They posted letters on the restaurant's doors stating,"It saddens us to inform you that the Rochester Green Mill will be closing its doors January 1."

Calls to Paul Dzubnar, CEO of the St. Paul-based Green Mill, were not returned this morning.

Dzubnar personally owned the Rochester franchise under the corporate name of G M P Rochester LLC. Citing long interest from Rochester diners to have a Green Mill of their own, he built the 6,800-square-foot restaurant at 2723 Commerce Dr. N.W. in 2006. 

"It finally came together," said Dzubner, who was then a vice president of Green Mill.

The Rochester location seated 240 people and employed more than 100 staffers when it opened. It was built in a commercial development that was spearheaded by Merl and Dan Groteboer.

After the closing, Green Mill now has 27 locations in the Minnesota and Wisconsin region. The closest to Rochester is in Winona.

In 2011, Dzubnar launched a second line of restaurants called Crooked Pint Ale House. There now are locations in Apple Valley and Minneapolis. Twin Cities media has reported that deals to open more Crooked Pints in and outside of Minnesota are in the works.

December 30, 2014

Strip mall with Ye Olde Butcher Shoppe sold

A 68-year-old commercial center in northwest Rochester recently sold for $765,000.

The strip mall at 902 Seventh St. N.W., anchored by Ye Olde Butcher Shoppe, was purchased by Song H. Hong on Dec. 1. HonYeoldebuildingg also owns Safechoice Insurance Agency, which is based in the center.

Other tenants in the Seventh Street plaza include Catering By Design and Jakobson Management Co. The brick-and-concrete center was built in 1946, according to Olmsted County property records.

Hong bought the building from HRB LLC, which state records list as being based at 1830 Second St. S.E. HRB purchased it back in 2001 from RC Properties of St. Paul for $900,000, according to county records.

December 23, 2014

Re/Max Results building sells for $1.1 million

As a real-estate firm builds a new home in Rochester, its current location was recently sold.

The Rochester office building at 4600 18th Avenue N.W., where Re/Max Results has its local headquarters, was purchased for $1.1 million on Nov. 24. Local developer John Klopp's High Springs Inc. bought the 24-year-old building from Northwest Executive Properties of Rochester.

Remax exteriorRe/Max Results, an Eden Prairie, Minn.-based business with about 68 Rochester Realtors, recently started construction of a new office building on West Circle Drive Northwest.

The planned two-story, 18,000-square-foot office complex, at 4123 26th St. N.W., is expected to be completed in August or September. Re/Max Results will remain in its current office until the new building is ready.

"We're doing extraordinarily well in Rochester," said Lynn Foulke, CEO of Re/Max Results.

Re/Max has occupied the the 18th Avenue office since 1990. It was Re/Max of Rochester for most of the time, but Re/Max Results purchased the business, along with Re/Max Realty Source of Austin, from Duane Sauke in February 2012.

Sauke had been the sole owner of the Rochester RE/MAX since 2006, when he bought out five other partners: Frank Armstrong, Jim Conway, Lee Taplin, Paul Norrie and Bill King. He owned the Austin operation for about two and a half years.

Re/Max Results, owned by John Collopy, operates in Minnesota and Wisconsin with more than 800 Realtors. The firm describes itself as the16th largest brokerage in the United States.