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May 23, 2016

Auto Techs to close at end of June

After 24 years in the fast lane, Roger Gansen is ready to slow down a bit.

Gansen has owned and run Auto Techs, a repair and sales shop, in Rochester since 1992. He has operated at his current location at 650 S. Broadway for about 12 years.

11146464_358227187720296_512149979420663139_oNow he has a "Closing soon" sign out front as he prepares to sell his property to the Lamont Cos. He plans to close the doors of his two-man shop at the end of June.

"It's kind of tough," said Gansen of the closure.

However, part of him is looking forward it.

"I'm ready for a change," he said. "I think this is kind of an opportune time for it."

The big question is will he re-open the popular Auto Techs somewhere else. That's a question he really doesn't have answer for.

"As of right now, everything is up in the air," Gansen said on Friday. "But right now, I'm looking forward to slowing down a bit."

While he is slowing down, the activity on that block of South Broadway is quickly ramping up this summer.

Lamont Cos. are the developers who recently purchased the adjacent Clarion Inn for $5 million with plans to build a newCandlewood Suites hotel and retail center. A liquidation sale of all of the hotel's furnishings and fixtures is underway.

Based in South Dakota, Lamont Cos. are the same developers who built Rochester's Holiday Inn by the Miracle Mile shopping center on Second Street in 2012.

May 20, 2016

Rochester's south Chipotle to re-open after hot water issue

I received several messages last night from taco bowl fans about Rochester's south Chipotle Mexican Grill at 1201 S. Broadway being closed. Chipotle-mexican-grill
 

It was just closed on Thursday, due to a water heater problem. I checked in with a manager today and he said they expect to re-open the eatery in front of Crossroads Shopping Center at noon today.
 
So Med City Chipotle addicts can relax and go get their fix.
 
 
 

Mayo Clinic Ventures looks to Israel for collaborations

Looking to help boost a variety of medical start-up businesses, Mayo Clinic Ventures is targeting collaborations and investments in Israel with a new program.

The goal of the Mayo Clinic Israeli Startup Initiative is to work with companies either through sponsored research grants or co-development.  

Flags"Co-development can include licensing of Mayo Clinic know-how or an investment," explained Timmeko Love, of Mayo Clinic Ventures. "It's about matching the right opportunities with Mayo Clinic know-how for collaboration. It's all about finding the right strategic fit."

Candidates for the Israeli Startup Initiative can include very early stage companies to ones that are much further along in development. They can work in any area of health care. 

"We're not limiting our options," Love said.

The project announced this week actually is a new phase of an existing Mayo Clinic initiative.

It has been active in Israel for about a year, partnering with the philanthropic Merage Institute. The California-based Merage Institute awards up to $150,000 in annual research grants for Israeli companies working with Mayo Clinic. The most recent recipient was EyeYon Medical, which makes a noninvasive medical device to treat corneal edema.

Mayo Clinic Ventures recently took on the Israel initiative and that has put co-development on the table. That new approach is being launched next week in Tel Aviv at IATI-Biomed, Israel’s largest life sciences and technology conference. Mayo teams will meet start-ups to study their technology, and then consider making investments or collaborations.

This is first time Mayo Clinic Ventures has focused on one whole country for business opportunities, despite its long history of international projects. Many might not be aware of it, but Israel is a logical candidate for a such a relationship.

"It's a natural next step for us," Love said.

Israel is considered to be the worldwide leader in innovation in medical devices, biopharma, software and other types of health-care businesses. The U.S imported $600 million of Israeli medical devices in 2011. In 2015, Israel housed 725 medical-devices businesses with an overall total of 1,380 life-sciences companies.

While California's Silicon Valley is known as the hottest spot in the world for business start-ups, Israel is recognized as a close second. A 2009 book, "Start-up Nation," documents how Israel, with a population of 7.1 million, generates more tech businesses than many much larger countries.

"It's kind of a national sport in Israel," said Guy David, a professor of health-care management at University of Pennsylvania’s Wharton School. He was born and raised in Israel and tracks its medical businesses closely.

David said Israel's required military service coupled with an environment that encourages questioning and taking risks is a big factor.

"Israel is hugely innovative. The innovative spirit starts at a very young age," he said.

While launching technology companies is a big focus in the country, the entrepreneurs all know the market for their products or services is elsewhere.

"There is no market in Israel. Israel is tiny," said David. "If they invent something, they know it has to be a global product."

Does that mean businesses partnering with Mayo Clinic could open offices or build facilities in Rochester?

"That certainly could be a possibility. We do look at an economic development when considering companies," said Love. "But it has to make sense for that company. There would need to be a business reason for it."

 

May 18, 2016

Chefs to upgrade Kahler's Lord Essex into a prime steak house

Here's some from my column on the culinary changes at the Kahler hotels. 

Local food fans in the know may recognize the names Tommie Tran and Duc Le. Tran used to own and operate The Lunch Box in the old downtown food court, previously on the third floor of the Galleria Mall, now University Square. Le comes from the Canadian Honker and Powers Ventures.

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Rochester's Kahler Hospitality Group is cooking again, with a new pair of executive chefs, who are turning the classic Lord Essex restaurant into a prime steak house.

Chefs Tommie Tran and Duc Le recently were promoted to take over the duties of Chef Stewart "Shefzilla" Woodman, who recently left after a short run at the Kahler hotels to return to the Twin Cities.

Image001"Both are banquet savvy and restaurant savvy," said Tyler Kase, area director of food and beverage for Kahler Hospitality Group, of the two Rochester chefs.

Tran and Le now are in charge of the culinary operations of the Kahler Grand Hotel and its sister hotels, which includes Lord Essex, The Grand Grill, Salute, Martini's, CB3, Freshens and Dunkin Donuts.

The hotels and restaurants are controlled and owned, in part, by local health-care executive and real estate developer Javon Bea and his family.

Kase, area director of food and beverage for Kahler Hospitality Group, says the first project for the culinary duo is upgrading the fabled Lord Essex in the Kahler Grand Hotel into a steak house serving only USDA prime cuts of beef.

With the closure of Rochester's beloved Michaels restaurant, he said it was decided there was a need for a classic steak house.

The change is underway and the plan is to officially re-launch Lord Essex this summer. It will serve eight prime cuts of steak in different portions, according to Kase.

Diners should expect an opportunity to "meet the meat" before getting their menus. Servers will roll a cart up to the table to display the prime cuts as well as lobsters and examples of Lord Essex's jumbo, one-pound baked potatoes.

"We're going for the 'wow factor,'" he said.

While the Lord Essex will feature many new menu items, it also will be serving long-time local favorites. That means the Duchess potato soup plus the French onion soup, which is being brought back by popular demand.

After the relaunch of Lord Essex, Tran and Le will turn their attentions to Salute in the Marriott hotel to more finely "hone" the Italian cuisine there.

Kahler Hospitality Group has an estimated 50 to 70 employees staffing its food venues.

May 17, 2016

Mayo Clinic to take over Biobusiness Center floor as Celyad pulls out

Mayo Clinic is returning to the fifth floor of Rochester's Minnesota BioBusiness Center, after a Belgium-based biotech firm left it empty for more than a year. 

In March 2015, the Rochester City Council approved a five-year lease for Mayo Clinic-linked Celyad to take over the fifth floor to create a prototype manufacturing facility that would add 33 jobs to Rochester.

CelyadCelyad's lease meant displacing all the Mayo Clinic workers based on that floor. Mayo Clinic moved its employees out at the start of 2015.

However, the project didn't go as planned. Celyad, formerly known as Cardio3, was unhappy when development costs came in much higher than the estimate provided by the city. 

051509biobusinesscenteratnight"The budgets we got far exceeded initial assumptions on which the project was decided," said Celyad CEO Dr. Christian Homsy in an email from Belgium in November. "Including the city support, the fit-out cost now exceeds the cost to do the same work in other locations where there is no city or state support."

Celyad halted the project before any construction work was done, so the 14,963 square feet of space remained just as Mayo Clinic left it. However, the biotech company did uphold its end of the lease and has been paying rent of $22,444.50 per month, or $269,334 per year. City officials say the company has made all of the required payments.

Since the end of 2015, the city has been looking for a new tenant to take over the fifth floor. Now, the city has approved a new lease with an old tenant.

The new deal adds the fifth floor to Mayo Clinic's lease, which already includes four floors of the seven-year-old building. 

"The lease amendment would provide for a rental rate of $17 per square foot for the 'premises,' which consists of the entire fifth floor. That rate would be in effect for a term consistent with the present term for the other four floors through April 1, 2029," according to the agreement approved by the Rochester City Council on Monday. 

Mayo-clinic-logoThat's $1 less per square foot than the $18 per square foot Celyad has been paying.

Before approving the new Mayo Clinic lease, the city council OKed the termination of the Celyad agreement. It called for Celyad to continue paying its regular rent through Sept. 30, plus "a lease termination fee" of $111,549.18. 

That fee will cover costs for the space from October to Jan. 1. Mayo Clinic will be building out the space starting in October and it will began paying rent in January. Mayo Clinic plans on using the floor to help teams that need more room.

"Planned occupancy will include relocating certain research support teams in need of additional office type space," stated Kelley Luckstein, of Mayo Clinic Media Relation, in an email.

Celyad's relationship with Rochester began in 2007, when it licensed stem-cell research by Mayo Clinic's Dr. Andre Terzic and Dr. Atta Behfar. It was called Cardio3 Biosciences back then. They have collaborated for years on the cardiopoiesis technology the company uses to repair patients' hearts by re-programming their own stem cells to regenerate cardiac tissue. Mayo Clinic owned 2.69 percent of Celyad as of March 3, 2015.

Beyond the fifth floor prototype manufacturing facility, the Celyad deal was designed to clear the way for the biobusiness to possibly build a 100,000-square-foot manufacturing facility with 350 employees in Rochester. That's what the company anticipates it will need if the Federal Drug Administration gives it a green light to take its stem-cell treatment to market.

Celyad's Homsy says Rochester now is out of the running for that.

"Celyad has assessed that a manufacturing plant in Rochester at this point of time cannot be justified.  We have opened an office in Boston from where our U.S. management is based, but we have delayed the decision on a manufacturing plant in the U.S. as we are able to manufacture all clinical lots out of our Belgian facility. As we approach commercial launch in the U.S., this situation may be revisited," he responded from Belgium by email.

Though the relationship between Rochester and Celyad has diminished dramatically in recent months, Homsy said it is not completely over.

"We continue to collaborate with Mayo Clinic, as well as with Andre Terzic, in the context of the evaluation of our CHART-1 data that should be disclosed by end of June 2016. If the data is positive, further development in the U.S. in the form of CHART-2, and, potentially, commercialization would follow," he stated.

May 13, 2016

Celebrity chef leaves Kahler hotels

Chef Stewart "Shefzilla" Woodman's short tenure in Rochester is over.

The award-winning chef and cookbook author came to the Med City in September to take the reins of the culinary operations of the Kahler Grand Hotel and its sister hotels. The Kahler Hospitalit5672b9df89d09.imagey Group'srestaurants include The Grand Grill, Salute, Martini's, Crossings Bistro, Lord Essex, Freshens and Dunkin Donuts.


The hotels and restaurants are controlled and owned, in part, by local health-care executive and real estate developer Javon Bea and his family.


While it seemed last fall that the high-profile chef was planning for a long run in Rochester, Twin Cities media is reporting that Woodman started a new job this week as executive chef at Lela. Lela is a high-end Minneapolis eatery located on the northwest corner of Interstate 494 and Highway 100.

Mpls.St. Paul Magazine is reporting that Woodman is excited about the new role, because his gig in Rochester did not allow him much time to actually cook or manage a kitchen.

Michael Henry, Kahler's managing director of human resources, didn't return either a call or an email  today asking for details about the change and if Woodman has been replaced yet.

Kahler Hospitality has been tweaking its restaurants in recent years to keep up with the increasingly competitive Rochester food scene. Woodman's departure could set that process back a bit.

Prior to Woodman, Kahler Hospitality employed Chef Pasquale Presa from 2011 to 2015 to spice up its menus. Chef Pasquale is now the executive chef at Kalahari Resorts & Conventions in the Wisconsin Dells.

 

May 10, 2016

$100 million development proposed near Saint Marys

A more than $100 million housing and commercial development is proposed for a high-profile corner of Second Street Southwest, next to Mayo Clinic's Saint Marys campus.

Development1The plans call for a 13-story building with two levels of underground parking to be built on more than two acres at the southwest corner of 14th Avenue Southwest and Second Street.

The Brentwood on 2nd and the Ray-Mar Motel stand on that corner. The hotels, along with some nearby houses, will be demolished to clear the way for the project. The Brentwood also houses several businesses, including City Market, Charlie’s Eatery & Pub, A Shared Smile and the Healing Touch Spa.

05-09 4Brentwood enWhile some details could change as it goes through the permitting process, the proposal includes 359 housing units with 310 "luxury" apartments in the tower and 49 connected townhomes.

The plan also includes almost 900 parking spaces, some of which will be public. The townhomes will act as a buffer between the parking and the Folwell neighborhood. The developers hope eventually to connect the project to Saint Marys Hospital via subway.

The tower on the corner is expected to include about 20,000 square feet of commercial space, including 13,000 square feet on the street level that will encourage sidewalk traffic with a restaurant and retail.

Development3"This project is completely different from than anything that has ever been built in Rochester," said longtime local developer Ed Pompeian. "This beautiful building will be first thing you see coming into Rochester from the highway, heading into the medical corridor."

Pompeian, along with his son, Nick, is partnering with a Twin Cities real estate development firm,  Alatus LLC, to create this project. The Pompeians lead a local investment group, 1406 Second Street Associates, which controls the hotels and all of the property where the project will be built.

Mayo Clinic is not directly involved with the project at this point.

'An amazing beacon for the area'

Alatus is well-known for handling massive developments, such as Mayo Clinic Square, Latitude 45 Apartments and The Carlyle condos in Minneapolis. It is led by founder Bob Lux.

"I think it's going to serve as an amazing beacon for the area," said Chris Osmundson, the Alatus senior development associate working on the project. "In real estate, it's always location, location, location, and this one's got it."

The Pompeians and Alatus have been working on this plan for about two years. They now are bringing it to the city for pre-development meetings, followed by the approval process. If everything goes well, they could start clearing the site for construction sometime this summer or early fall.

Estimating a 16- to 18-month construction period, Osmundson said it's possible the project could be finished by spring 2018.

This is the first major project pitched for that area since the implosion of a proposed Holiday Inn hotel complex late last year. That project struggled though the planning process and was criticized by some neighborhood groups.

However, these developers are optimistic, after getting positive feedback from the Folwell, Kutzky and Historic Southwest neighborhood associations.

"It was very refreshing for everybody. Support was literally unanimous from the neighborhoods. Great things can happen, if you take the proper steps," said Nick Pompeian.

Talks started more than a year ago

Don Nordine, president of the Folwell Neighborhood Association, said the developers started talking to his group about a year and a half ago.

"We like the project, even though it is really big," he said. Folwell includes 200 houses, while the project will have 359 apartments and townhomes.

While the group supports the project, that doesn't mean they still don't have some concerns, said Nordine. The public parking aspect of the development has residents worried about traffic.

"The city and the developer have to get this right. We want this to keep this neighborhood residential and quiet. I think they are open and honest, but the devil is in the details," Nordine said.

Jesse Welsh, president of the Kutzky Park Neighborhood Association, is also positive about her interaction with Alatus and the Pompeians so far. While they have not been able to schedule an official presentation with her association yet, Welsh sat in on a Folwell meeting and spoke with Lux. She plans to brief her association on the project at a neighborhood meeting tonight. Members of the independent Imagine Kutzky advocacy group also sat in on meetings and were supportive of what they heard, she said.

Traffic is also a concern for the Kutzky neighborhood, but overall, Welsh was pleased with Lux's approach.

"What impressed me the most was how well they've worked with Folwell. They understand how critical it is to work with the neighborhood," she said.

 

April 12, 2016

Mayo Clinic sells 4 lots for $720,000

Everyone knows lots of properties are selling in Rochester, though, in many cases, only the buyers know what is coming next.

Saint-marys-8colMayo Clinic sold three open lots plus one with a 97-year-old house in southwest Rochester for $720,000 on the final day of March.

The four parcels are on 14th Avenue Southwest, which runs along the west side of Saint Marys Hospital. Olmsted County estimates the total value of the real estate at $140,000.

Here's what Mayo Clinic had to say about the deal.

"We did sell four parcels recently (313, 317, 323 and 327 14th Ave, SW) to '1406 Second Street Associates.' You will need to contact the buyer’s representatives for any additional info/comment on their plans for the parcels," wrote Ginger Plumbo, of Mayo Clinic Communications, in an email response to questions.

Rochester developer Nick Pompeian, who owns the Brentwood on 2nd and Ray-Mar hotels at the corner of 14th Avenue Southwest and Second Street, is a representative of the local investors behind 1406 Second Street Associates.

He confirmed the purchase Monday, but couldn't discuss any future plans for the new property.

However, the real estate does seem to support the longtime buzz that a major redevelopment is coming for that ever-so popular block. 

As Destination Medical Center very slowly ramps up, the prospect of sitting in the shadow of Mayo Clinic's busy hospital has a lot of people eagerly putting together potential deals.

April 08, 2016

New Rochester art gallery is thinking big

Wendy Westlake has a big vision for 535 Gallery, her new Rochester art gallery.

"The concept is for large-scale contemporary pieces as a service for designers and the general public looking for a distinctive statement piece to make an impact in a large space," explained Westlake, as she took a break from converting a former industrial space into an art gallery.

04072016535galleryWith the help of her gallery director, Nick Sinclair, Westlake is working on the new gallery at 535 Sixth Ave. N.W. in Rochester's artsy Cooke Park Design District. The more than 2,000-square-foot gallery will share the block with the funky Dwell Local art and antique shop as well as Fox & Fern Floral and A Beautiful Soul, a New Age Boutique and healing store.

They hope to open the doors some time this summer. Realtor Dylan Carty, of Rochester's Realty Growth Inc. (RGI), handled the deal to line up that spot for 535 Gallery.

Westlake's 535 Gallery is located between the imported car repair shop, Werkstatt 533, and Auto Refinishers Plus.

"We think this Cooke Park area is a good place for us to be. We like what it is becoming," she said. "Though it is kind of a strange place to be sandwiched between two auto places."

Westlake and Sinclair caution that people should not expect a gift shop or even a place like the recently closed SEMVA (Southeastern Minnesota Visual Artists) gallery. It will specialize in paintings and mixed media pieces with interior designers in mind, though it also will be open to the public. They envision the large artworks in both local residences and commercial spaces.

They are adding a designer's room to the gallery for meetings with interior designers and their clients.

"It'll be a nice space where we can show them our catalog of art," said Sinclair.

The plan is to host 10 exhibitions featuring two local or regional artists every year. 

SEMVA, which was downtown near Mayo Clinic, was popular with visitors. Westlake expects 535 Gallery to serve a different group of customers, because of the size of its art and its location.

"We want to be an art gallery for Rochester," she said. 

 

April 01, 2016

MEP engineering to move to new Rochester office

A growing engineering firm is planning to move soon to a new, larger northwest Rochester office.

The Rochester office of Eau Claire, Wis.-based MEP Associates plans to move into the former Venture Computer Systems/ Marco Inc. complex at 3416 Lakeridge Place NW.

Ex-venturecomplex"The building is empty and we've already started construction," said Luke Johnson, a mechanical engineer and project manager at MEP. "We're going more than double our office space."

MEP is moving from 2900 43rd St. NW. MEP opened its Rochester location there in 2009. MEP hired the entire engineering team from the former Holabird & Root office, when Holabird closed up its Med City location.

Since MEP began operating in Rochester, this location has flourished and grown. It opened in 2009 with the nine ex-Holabird engineers. MEP, which handles a lot of projects for Mayo Clinic, the University of Minnesota and Carleton College, now has 15 staffers in Rochester.

"With the new space, we'll have room to add 10 more people," said Johnson. "We're seeing a lot of construction of all kinds, mostly in the Rochester region. Two of our niches, building labs and campus utilities, are very active."

MEP is leasing the 9,794-square-foot Lakeridge complex from owner Jon Eckhoff.  Eckhoff originally built it 2005 for his company, Venture Computer Systems. Marco Inc. bought Venture in 2009 and leased the building from Eckhoff. 

Marco moved to a new Rochester office at 1014 Bel Air Lane NW in 2014.