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July 24, 2012

Sale of Second Street properties raises questionsabout future development

Here's my piece from today's paper about the sale of the Bell Tower Inn, the Alpine Inn plus four other properties on Second Street Southwest.

While the details about the new owners and their intentions are sparce, I'd say one strong possibilty is that a local developer with a handful of local investors put together a deal.

We know Rochester Attorney Dan Berndt is representing the owners, since he filed the incorporation of Second Street Parking LLC.

I've heard from unofficial sources that a hotel is most likely the project in the works, but the company name suggests the possibility of some sort of parking gambit, maybe building extra and selling those spaces.

Of course, that speculation could be way off. We'll just have to see what happens.

A cluster of southwest Rochester properties, including the Bell Tower Inn and the Alpine Inn, sold for $2.72 million earlier this month.

That spurs the question of what the new owner — Second Street Parking LLC — has planned for one of the city's highest profile blocks, across the street from Saint Marys Hospital.

6a00d83451cc8269e2016767b62c44970b-800wiIt's unclear who's behind the Rochester company or what the plan is for the older buildings that have long been identified as a prime spot for new development.

The recently formed Second Street Parking bought the parcels that cover half of the block of Second Street between 12th and 13th avenues on July 9. The deeds were officially transferred on July 17.

This is the same group of buildings that were up for foreclosure last month, until the Boundary Waters Bank canceled the sheriff's auction. The company that bought them was incorporated only a few days before the auction was canceled, according to Minnesota Secretary of State's records.

Listing Rochester attorney Dan Berndt's office at the downtown Dunlap & Seeger Law Firm as its registered office, Second Street Parking filed for incorporation on June 6. Berndt was unavailable Monday to discuss the company or the project. No other names were part of the public filing.

Many speculate that the old hotels, the A & A Guest House and the handful of older houses will be demolished to make way for a new development.

While the company's name implies that parking is at least part of what is coming for the area, people connected to the project say they expect a new hotel.

Prior to the sheriff's auction being canceled, the land was described as "a prime hotel development site" in a real estate listing by Eden Prairie, Minn.-based Leines Hotel Advisors. The land was priced at $4.3 million in the sale brochure.

Developers are interested in building more hotels in Rochester due to growing population and the steady stream of visitors to Mayo Clinic.

A Holiday Inn Express & Suites opened last month a few blocks west of the Bell Tower properties, and the nearby Blondell Hotel was upgraded and re-branded as The Brentwood on 2nd. In addition, a La Quinta Inn & Suite is slated to be built in the Shoppes on Maine area in south Rochester.

Prior to the Boundary Water Bank assigning a receiver to take control of the properties, Mike Gillespie of Urbandale, Iowa, owned and managed the buildings.

He bought them in 2006 and 2007 to sell to a client who had plans to build a new commercial project there. The recession then caused the expected buyer to back out and Gillespie was stuck with properties that he had not expected to own for long.

The Bell Tower alone, which was built in 1910, cost him $2.2 million in October 2007.

Comments

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Build a parking lot, and I will rent a spot.

I say build a big four level ramp (partially underground) and stick a hotel on top of it. two levels contract, one by the hour/day and one for hotel guest.

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