Kiger's Notebook

Paint business to build new store, add more color to S. Broadway

It looks like more color is in the pipeline for Rochester's South Broadway.

A Rochester paint business looking for a home has decided to build a new store.

Sherwin-Williams plans to build a 4,000-square-foot paint store on a spot in the parking lot in front of the south ShopKo and Menards stores, just south of Culvers.

The hope is to get it built and open by October, says Nate Reit, manager of the south Rochester Sherwin-Williams store located in the former Rochester Market Square building. That former "home building mall" used to house a number of similar construction business tenants. However, that focus faded when the economy crashed and the building industry was gutted.

The 56,000-square-foot complex was purchased by the Rochester School District for $2.1 million last fall. It is being remodeled to house area learning programs.

With the building being "schooled," the one remaining tenant, Sherwin-Williams, needs to move out.

That's where the new store comes in. Reit says building will allow Sherwin-Williams to have "total control" of its future in south Rochester.

"I think our retail business will really thrive there, particularly being near Menards," he says. "We haven't been that accessible for the past six and half years we have been here (in Rochester Market Square)."

However, Sherwin-Williams does have a strong relationship with many of the area's contractors, and he believes that will continue in the new spot.

Right now, the south store has nine on staff.

"I think we'll probably need to add people at the new location, just to keep up with the additional retail business," Reit says.

In addition to the south location, Sherwin-Williams has a store on the north side of Rochester. Both stores are corporate-owned.

New salon concept ready to launch in south Rochester

A new twist on hair salons is ready to roll into south Rochester.

Austin and Kari Lucas are setting up a Sola Salon Studios franchise in 5,200 square feet of space in Shoppes on Maine. Sola Salon is taking most of the strip of empty spots along the north side of the complex that houses MGM Liquors and the former Best Buy store.

The concept is more like a mall than a traditional beauty salon. It will be a collection of 26 private studios that will be available for lease by licensed stylists and professionals in related fields. Three sizes of models will be available.

"We're not in the salon business," explained Austin Lucas. "We're in the business of putting people into business."

Each studio is its own independent operation with its own name, retail products, prices and hours.

"They keep all of the money. They can start their own salon without any of the usual headaches of starting a business," he said. "This is several steps further than stylists renting a chair, like you see in many salons."

If everything goes as planned, construction should begin soon. The hope is to have the studios ready for tenants by early to mid-summer.

Besides a space, Sola Salon provides the hydraulic chairs, sinks and whatever other basic equipment that is needed.

Access to the studios is available 24 hours a day, seven days a week. That allows the tenants to be open when they want to work.

Three Sola Salon Studios are open in the Twin Cities, and two others are under construction. This will be the first one outside of the metro area.

Is Holiday taking over Roch.'s SA gas stations? Looks like it

The buzz is that the Med City will have a lot more Holidays in its future, but don't expect any changes to the calendar.

For the past few weeks, folks in the know have been saying that Bloomington, Minn.-based Holiday Station Stores plans to take over the seven SuperAmerica convenience stores in the near future, possibly by the beginning of May.

One version goes even further and says Holiday plans to build two additional new stations here to bring its total of Rochester sites to nine.

Holiday's head office as well as SA's corporate parent, Northern Tier Energy in Ridgefield, Conn., have not been helpful as I've tried to confirm or disprove this high-octane story, which is getting such good mileage at the pumps.

The only response I've received is this email from Christine Carnicelli of Northern Tier, "As a general policy we do not comment on our business operations so we would prefer not to provide any details on this matter."

Nonetheless, evidence is building that Holiday is indeed gearing up to roll into the Rochester market in a big way.

Holiday Station Stores Inc. has filed a permit with the city of Rochester to build a station on the open land at the corner of West Circle Drive Northwest and Valleyhigh Road Northwest. That would put it right next to Ford-Metro Glass and across West Circle from Mayo Clinic's Superior Drive Support Center.

With CostCo's move into the area acting as a catalyst to spur other nearby retail projects, that seems to be a pretty good spot to put a station.

A search on Holiday's website for Rochester locations comes up with the single station at the entrance to the Cub Food Plaza at U.S. 14 and 15th Avenue Southeast.

Holiday took over that station in October 2011. Before that change, Holiday had been absent from this market for five years with its last Med City station closing in January 2006. That one was later transformed into the Beer Bellyz bar, along Civic Center Drive Northwest.

While the website lists only one station, Holiday's list of job openings tells a very different story.

Holiday is taking applications for eight Rochester locations. The addresses match the city's seven SuperAmericas and the one active Holiday station.

This shift might mean a change to the calendars after all.

Mark this spring as the start of the "Great Med City Gas War" between Holiday and Rochester's reigning C-store champ, Kwik Trip.

New building proposed for deposed Burger King site

After eight years as an empty building gathering dust, a proposed development might mean that it's time to say farewell to Rochester's deposed King.

This royal saga begins with an ending, so here's a slightly condensed version of the history to provide background for the new chapter.

In 2005, the Burger King at 4107 U.S. 52 N. closed its doors after a dispute between franchisee Road Corp., which was owned by Girish Dharod, and the royal fast food corporation ended with all five of Rochester's BKs being shut down.

Burger King shifted the Rochester area franchises to the Twin Cities-based Dolphin Corp., which quickly re-opened three of the five restaurants.

The two others — the North 52 location and the one at 615 S. Broadway — were owned by the Dallas, Texas-based Z’s American Properties. Z's American Properties is owned by Sunil Dharod, Girish's brother.

Eventually, a real estate auction of the two ex-BKs was held in 2006. Dolphin was the top bidder, but Sunil Dharod later rejected the bids.

A frustrated Greg Dolphin said he was ready to “go back to the drawing board" and pursue other Rochester sites to open more Burger Kings. True to his word, Dolphin is planning to build a new restaurant on a long empty chunk of land at the corner of 12th Street Southeast and Marion Road Southeast. When completed, it will be the new home for the BK that's now based in the nearby Cub Food Plaza.

In the ensuing years, the South Broadway building became the Tex-Mex eatery Rico Mex. That closed in 2008. It was bought up by the University of Minnesota Rochester and demolished to clear the way for a future campus.

Meanwhile, Sunil Dharod's other building sat quietly, tucked away in its nook on the U.S. 52 frontage road

That could all change now that Z's American Properties has filed plans with the city to build a 7,400-square-foot complex. The plans show it split into two units — a 2,400-square-foot restaurant and a 5,000-square-foot retail site. Rochester's McGhie & Betts is handling the design duties.

The building plans were filed with the city this week, so it might be a while before anything happens at the faded fast food site. If the plan does move forward, it'll be interesting to see what restaurant might open there.

Like his brother, Sunil Dharod was a franchisee with Burger King. At one point, he had 18 BKs as well as many Applebee's restaurants. His BKs were auctioned off in 2011. The Dallas Morning News described the split as being "Beset by lawsuits, slumping sales and hard feelings."

Sunil Dharod still has his flourishing portfolio of 43 Applebee's, all of which are in Texas. However, an Applebee's doesn't seem a likely candidate for the new spot, since one is already cooking across the highway. Since the plans include a drive-through window, it looks like some sort of fast food entity is in mind.

Flurry of activity at forlorn, orphan lot

So a sharp-eyed reader recently spotted a crew quickly putting up a security fence around the forlorn and often forgotten parking lot without a development, Willow Creek Market at south 48th Street, across U.S. 63 from Shoppes on Maine.

After about six or seven years without any activity, a new fence definitely caught my attention.

When checking it out, i.e. snooping, I spotted some new cars parked in a corner of the lot. When I realized that all of the vehicles were made by Mercedes, the light bulb finally clicked on over my head and this thought bubble soon joined it.

"Hhhmmm... the new Mercedes of Rochester dealership that is getting close to opening across the highway still has its lot full of construction machines. But they would need to be bringing in inventory to prepare for the opening…"

It seems a safe bet that Mercedes is staging its cars on the lonesome orphan lot, while construction wraps up.

Temporary or not, the activity seems positive for the site. Rochester's Hamilton Real Estate is the listing the property these days.

Snappy Stop closes in north Rochester, but south shop continues cooking

Due to increased competition and a sluggish economy, the Snappy Stop drive-thru burger booth in north Rochester closed up shop for good on Sunday.

However, fans can still get their quick burger and fries fix at the original Snappy Stop mini-tower on South Broadway at 37 Ninth St. S.E.

"The north store was in a tough location," said Bucky Beeman, whose family created the unique burger drive-thru. "Eventually, we decided to close it and refocus our efforts on the south store and other businesses."

The north Snappy first opened at the start of 2005 at 3550 55th St. N.W., tucked between Discount Tire and Affinity Credit Union in front of the Northwest Plaza shopping complex.

The north store never was quite as successful as the easily accessible original at 37 Ninth St. S.E. by the Kmart store and the Soldiers Field shopping center, which Bob Beeman, Bucky's father, opened in 1986.

There were six employees working at the north Stop.

The building is available for lease through Rochester's Realty Growth Inc.

With all of the competition from Newt's to Five Guys to even Kwik Trip, how's the future look for the south Snappy Stop?

"The south location still does very good business," Beeman said. "It definitely will be there for a long time to come."

Oronoco couple signs for $145 million loan to buy Kahler hotels

Here's some from my piece today that pulls back the cloak of secrecy from the mysterious new ownership of the Kahler portfolio of hotels:
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Loan documents filed with the U.S. Securities and Exchange Commission indicate that Javon Bea, a Wisconsin hospital executive who lives in Oronoco, is the driving force behind the $230 million purchase of four Rochester hotels, anchored by the Kahler Grand Hotel.

Bea, along with his wife Vita Bea, signed as "sponsors" to borrow $145 million from Deutsche Mortgage & Asset Receiving Corp., part of the German banking giant Deutsche Bank, to finance the deal to buy the hotels from Sunstone Hotel Investors, according to the documents, which are public information and available online. The deal, which was announced in February, also included the Textile Care Services laundry business.

The hotels are the Kahler Grand, the Kahler Inn & Suites, the Marriott Rochester at Mayo Clinic and the Residence Inn.

Bea also is listed as sole owner of RochesterBevFlow, which holds the liquor license for the Kahler hotels. The transfer of the liquor license is on the agenda for the Rochester City Council meeting tonight.

Bea, a former vice president of operations for Saint Marys Hospital, has been chief executive officer of Mercy Health System in Janesville, Wis., since 1989. He has not responded to repeated interview requests in recent months.

Bea previously has been identified as an investor in the Kahler purchase as well as a consultant to the ownership group by Merl Groteboer, the Rochester Realtor who represented both sides of the deal.

The financing for the Kahler purchase was outlined in Deutsche Bank's SEC filings:

• Three Deutsche Bank loan components  — $110 million, $10 million and $25 million, totaling $145 million — provided the bulk of the financing, at an interest rate of 7.4 percent.

• "The Borrower" provided $45.8 million in equity. Javon R. Bea and Vita E. Bea are identified as the sponsors of the borrowers and the guarantors.

• Sunstone, a real estate investment firm based in Aliso Viejo, Calif., and owned the Kahler properties for 16 years, retains a $25 million equity investment in the hotels.

SEC documents filed by Sunstone also show that the California company retained $14 million in "liability related to the Portfolio's pension plan." Sunstone also provided "a $3.7 million working cash advance to the Buyer that will repaid from the Portfolio's available cash flow."

According to insiders, one of Bea's plans for the hotels is to offer transitional medical care for people recovering from treatment at Mayo on one or two floors of the 660-room Kahler Grand. The hotel is across Second Avenue Southwest from Mayo's Gonda Building and south of Rochester Methodist Hospital.

Industry experts say such a blending of hotel and hospital has been discussed in other markets, but no one has tried it in Minnesota.

Mayo Clinic extends deal with drug research lab

Here's some from a release I spotted this morning about Mayo Clinic signing an updated agreement with Sanford-Burnham, a research lab with locations in California and Florida.

By the way, the Sanford in Sanford-Burnham is T. Denny Sanford, who is also a big financial backer of Mayo Clinic.

Sanford-Burnham and Mayo Clinic signed a new collaborative agreement to build a pipeline of therapeutic drugs aimed at a variety of diseases with serious unmet medical needs.

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The agreement combines Mayo Clinic’s clinically relevant targets with Sanford-Burnham’s discovery platform in a translational initiative aimed at advancing a portfolio of projects through the initial stages of drug discovery. The new agreement builds on a yearlong pilot phase and expands the number and scope of drug discovery projects derived from Mayo Clinic researchers that are being conducted at Sanford-Burnham.

 

“We’re looking forward to further engaging with our Mayo Clinic collaborators as we develop innovative screens to identify chemical compounds that modulate the activity of clinically relevant targets,” said Michael Jackson, vice president of drug discovery and development at Sanford-Burnham. “If successful, these compounds will form the basis of completely novel—‘first in class’—therapies for devastating diseases such as cancer, Alzheimer’s, and others.”

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“The Mayo Clinic–Sanford-Burnham collaboration provides an avenue for Mayo scientists to rapidly translate basic science discoveries into screening platforms that will enable new drug discovery, and a new paradigm in drug development,” said Andrew Badley, associate dean of research resources at Mayo Clinic.

Historic Third getting a new bar?

Rochester's Historic Third St. S.W. is really hopping these days with The Tap House, The Downtown Kitchen, Sontes, Bilotti's and, of course, John Kruesel (He is as much of an attraction and landmark as any historic building in downtown).

And now the buzz is that a new bar is in the pipeline for the Med City's coolest side street.

A liquor license request is on the agenda for tonight's Rochester City Council meeting.

The name is The Doggery and the address is 18 Third Ave. S.W. That's old Mercentile Exchange building.

The name on the license is Aynsley Michael Jones. He's a high-profile downtown bartender, who I believe was at City Cafe the last I heard of him.

That's all I've got for now. Not sure where it would be in the building or if it would impact Artistic Framers or Nordic Gypsy.

 

 

 

Former Med City bank exec is bringing new loan office here, recruits Roch. bankers

An Iowa bank - West Bank - will soon deposit a loan office in the Med City and it is tapping some local bankers to run it.

While this will be the $1.4 billion community bank's first foray into the Rochester market, it's CEO is very familiar with the terrain. CEO Dave Nelson is certainly no stranger to the Med City.  Before taking the reins of West Bank in 2010, he was the president of Wells-Fargo Rochester.

Now after two years in Des Moines, Iowa, he is looking at Rochester to expand West Bank. And he is recruiting key executives from his old bank to manage this new project.

"It’s a great win/win for all of us. … We are committed to pursuing growth opportunities where we can find the talent and strategic fit," he says. "In this case, we’ve been able to recruit long time Rochester banker Mike Zinser as our new Market President.”

The plan is to open a loan production office in Suite 100 of 3147 Superior Drive N.W. on March 18. It will be focused on business banking, though it will also offer treasure management services and home mortgages.

Zinser was previously a Regional Business Banking Manager for Wells Fargo’s Business Banking division in Rochester. 

The other two bankers - Mike Schletty and Michele Sursely - hired to run the new West Bank office are also former Wells-Fargo employees.

Schletty, most recently a senior business banker for Wells-Fargo, will serve as vice president of West Bank's Rochester time.  Rounding out the team is Sursely, a 32-year Wells Fargo veteran.

“You can’t launch a new initiative like this without a hometown team.  Mike, Mike and Michele have made Rochester their home for years, and they know the community’s needs,” Nelson says.

The loan office may be just the beginning. West Bank sees a lot of potential in Rochester for its business-focus community bank.

"We see this as a temporary phase…a way to get started," he says, "In the future, we do envision building a more traditional bank branch in Rochester."