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November 24, 2014

Bandel Road Business Center sold for $1.6 million

A commercial center on Rochester's Bandel Road recently sold for almost $1.6 million as an investment for the future.

Vance Prigge, majority owner and president of Atlas Insurance Brokers, bought the Bandel Road Business Center at 5721 Bandel Road N.W. from local architect David Kane. Its current tenants are Kelly Services and Thrivent Financial. There's about 2,000 square feet still available for another tenant.

64585318ee614fa1aaade37b6bf6b76cPrigge describes the purchase as an investment with an eye to possibly use the building as a home for Atlas Insurance in the future. However, he has no immediate plans to make any moves or change anything about the building. He bought the property through his corporation, Centurion Blue Holding, LLC.

Commercial Realtor Scott Hoss handled the purchase for Rochester's Paramark Real Estate Services. Gary O’ Conner from Security State Bank of Wanamingo handled the financing.

The center was built by Rochester developer Jeff Brown in 2007.

November 21, 2014

Farrell's Bodyshaping to double up in Rochester

Things are shaping up for a second Farrell’s eXtreme Bodyshaping studio to launch in Rochester.

Owner Doug Schminke plans to bookend the city with a new location at 4206 U.S. Highway 52 North to counterbalance his southwest studio. It'll be located in the commercial center anchored by Harbor Freight Tools on the U.S. 52 Frontage Road, according to Farrell's Manager Jeff Wagner.

RochesterfarrellsexteriorThe real estate deal was brokered by Darci Fenske, of Paramark Real Estate.

The new northwest studio is expected open by Jan. 24, when Farrell's winter session of its 10-week program kicks off, said Wagner. 

"We're continuing to grow. It has always been our goal to have locations on both sides of the city," he said.

The first Rochester Farrell's opened in 2011 at 1300 Salem Road S.W. in the T.J. Maxx & More Plaza. It now has more than 350 members and hosts nine classes, six days per week.

Wagner says the studio will be very similar in size to the current one. He expects a few more instructors will be added to the existing team of about 20 to cover the additional classes.

Farrell's, which is based in Des Moines, Iowa, uses kickboxing for a cardio workout, resistance bands for strength training and a nutrition plan to transform people. The workout sessions run 45 minutes.

November 18, 2014

In praise of shoes, Hawley opens Luya Shoes in Zumbrota

Connie Hawley really, really loves shoes and sees them as art.

She has now brought that vision to life on Zumbrota's Main Street in her new store, Luya Shoes and Other Fine Things. The 4,000-square-foot store carries footwear of all kinds for women, men and young children.

10305598_10154867691090571_6430566947257334096_n"Shoes are very sculptural. Even if you aren't wearing it, you can see it in a box or in a closet and it is beautiful. Shoes make people happy," Hawley said.

Since these "sculptures" are ones that people wear, she says it's equally important for them to be as comfortable and durable as they are attractive.

"I've tried to find brands and styles you can't find anywhere else in the area," Hawley said.

10670270_867058883338632_8450038742804535500_nShe has hand-made moccasins from Spring Grove and popular brands that include OTBT, Rieker, Naot, Corky's Footwear and Corral boots. Luya also carries jewelry, belts and purses, including Baggallini bags. For men, Hawley also has conditioners for beards as well as related gift baskets and accessories.

Adding to the art gallery feel of her store, she displays her products on cabinets and shelves refinished by Jim Hahler of Hahler Restoration and Design. She also has artwork by three local artists for sale on the walls.

The one big question remaining is: What's the story behind the name Luya?

Hawley explained that she has talked about opening a shoe store for many years. Part of that dream also was playing on her last name of Hawley and calling the shop something like HawleyLuya, pronounced like hallelujah.

"I realized it was kind of crazy and a bit too long and too hard to say," she said. "But I still liked Luya, so that's what I went with."

Christian Book and Gift to close after 57 years

After 57 years on North Broadway, the family-owned Christian Book and Gift Shop announced Monday it will close its doors for good on Dec. 31.

264155_10150248194599430_474142_nIn a note to customers, owner/manager Karen Mulholland McKenzie and co-manager Judy Mulholland stated it was a heart-breaking decision to close the store at 815 N. Broadway.

Christian Book and Gift was launched by Karen's parents, Dennis and Elaine Mulholland, in 1957, when they purchased the Home Book Shop from Harry Boyer. They ran the store for many years out of the family’s nearby home on North Broadway, until expanding into the commercial store and growing it into one of the largest stores of its kind in the region.

“We’d ... like to express our deep sense of grief over no longer being able to provide this service to our customers and our community," they wrote. "There are myriad challenges in running a Christian retail business and independent bookstore — challenges that require youth and energy to stay in the game."

As the store has struggled, the Mulhollands have been talking to several Christian retailer chains looking for a buyer, but they were unable line up anyone to take over the store.

The store temporarily closed on Monday to prepare for a "Going Out of Business" sale and will re-open with marked down products on Thursday.

In their statement, the family voiced their appreciation for their "loyal customers" and their 11 employees, "many of whom have been with the bookstore through several building expansions and countless story times, summer tent sales and events with local and national Christian authors."

This announcement follows on the heels on the recent sale of the store, its parking lot and four houses to Samaritan Bethany. The senior living facility is just across Eighth Street from the book store, and its employee parking lot is adjacent to it. Samaritan Bethany closed on the purchase on Oct. 31.

"We have no current plans for the property," said Sue Knutson of Samaritan Bethany. "When we expanded the lot a while back, we let everyone in the neighborhood know that we'd be interested in buying property in the area. The siblings recently decided they were ready to sell."

Knutson said Samaritan Bethany had intended to lease the 7,500-square-foot store to the family, so they could keep the business running. Now that it's closing, she said they will look for a retailer to take over the space.

The Mulhollands also hope another business will step into the space.

"Our prayer is that a business person with a heart for this type of store will come to the area and open a great shop that will meet the changing needs in this community,” they wrote in their announcement.

November 14, 2014

Ex-Mayo doc "feared retribution against himself and his family"

It has been an interesting week in the Mayo Clinic vs Dr. Franklin Cockerill legal tussle. So Cockerill's lawyers filed a motion Wednesday to modify the temporary restraining order that blocks Cockerill from working for Quest Diagnostics PLUS a detailed affidavit from Cockerill explaining his side of the case.

So the PB court reporter Kay Fate printed out the documents for me on Thursday and I wrote an article based on the filings last night. The twist here is that Cockerill's legal team withdrew the filings Thursday, after we printed them out.

The upshot is that my article is still running today in the PB. Here's some of it. The full piece is in today's paper:

A former Mayo Clinic doctor and executive said he did not tell Dr. John Noseworthy about his plans to work for a Mayo competitor because he "feared retribution against himself and his family."

CockerillDr. Franklin R. Cockerill III, the former CEO of Mayo Medical Labs, took early retirement at the end of September. However, instead of retiring, he stepped into a new job on Oct. 1 with Quest Diagnostics Inc.

The clinic filed a lawsuit against Cockerill over his decision to not tell Mayo Clinic he had been hired by a competitor; he told co-workers he intended to run his elderly mother's farming business.

The suit claims he misled everyone so he could acquire sensitive competitive information for his new employer. As part of that suit, a temporary restraining order was issued on Oct. 14 that prevented him from working at Quest because he could cause "irreparable harm" to Mayo Clinic.

Members_009-questCockerill filed a motion Wednesday to modify that order to allow him begin his role as Quest's chief lab officer because the person he is to replace will retire at the end of December. However, his lawyers withdrew the filing on Thursday and also withdrew an affidavit that detailed his version of the events surrounding his departure from Mayo after a more than 30-year career there.

However, the withdrawal came after the Post-Bulletin obtained a copy of the affidavit.

"It is now plain that the draconian restrictions that Plaintiffs obtained from this Court and that Dr. Cockerill had no opportunity to oppose are not consistent with Minnesota law and are entirely inappropriate," according to the original filing made by his lawyers from the Minneapolis firm of Lindquist & Vennum.

Cockerill contends Mayo Clinic had approached him with an attractive early retirement offer as his final two-year term as a department head was coming to an end. When asked for a response, Mayo Clinic denied that.

"Claims of an early retirement offer are completely false, and we were prepared to file documentation to prove it," said Mayo spokesman Bryan Anderson this morning.

In his affidavit, Cockerill says he announced his retirement in July, with plans to help his mother, and then he was asked by a Quest recruiter to interview for a position there. He eventually accepted a job with the condition that he work from Rochester, instead of the company's New Jersey headquarters.

Cockerill stressed in his filing he did not make the change to make more money. Mayo Medical Labs is the third largest laboratory company in U.S. and generates "a significant proportion of Mayo's profits." He had made about $580,000 a year at Mayo Clinic. At Quest, he will earn an annual salary of $400,000.

"I left my employment at Mayo reluctantly and only due to the convergence of several factors that arose as I enter the last stages of my professional career," he wrote in the filing. "Finally, in addition to limitation on the role I could still play at Mayo, my interest in the Quest position, and the attractive Mayo early-retirement offer, my decision to change employment was also influenced by my belief that the environment at Mayo had negatively changed over the past five years. Staff satisfaction has declined, burnout has significantly increased, and many people have grown afraid to speak up and voice their opinions."

November 12, 2014

New specialty grocer to build in S.W. Rochester

A new specialty chain is on its way to Rochester, joining an already crowded grocery scene.

Natural Grocers by Vitamin Cottage, based in Golden, Colo., has filed plans with city to build a 14,000-square-foot store on an open lot in southwest Rochester by the TJ Maxx Plaza and the Ramada Hotel and Conference Center

Get_photoThink Mutual Bank owns the store site, which is at the corner of Greenview Drive and Salem Road Southwest. Think had planned to build there, but recently the bank announced it planned to offer the plot for development.

This will be Natural Grocers first store in Minnesota, though the 59-year-old public company currently operates 84 stores in 14 states, with 10 more expected to open soon.

While it generally is described as a specialty food retailer, Natural Grocers is very different than Hy-Vee, Trader Joe's or Aldi. It sells only organic foods as well as an extensive selection of vitamins and dietary supplements. The chain's website says its stores devote about 30 percent of their shelf space to vitamins, which in turn generate about 30 percent of its revenue.

"It looks like it goes deeper and more narrow than a mainstream grocery store. It is much more like a Whole Foods or a co-op," said Jonathan Seltzer, a St. Thomas University business professor.

Seltzer, who previously worked at the Supervalu grocery chain, doesn't think the addition of Natural Grocers to Rochester should hurt any one retail competitor more than others.

"It will probably draw some customers from many different players," he said.

This new store is just one factor in what is becoming a very competitive grocery scene in Rochester. Discount grocer Aldi is building its second store here and Hy-Vee plans to start construction of its fourth location in early 2015. The city's other food retailers include Cub Foods, Fareway Foods, Zzest, Walmart and Target.

"It seems that you are getting more square footage devoted to food retail in Rochester than the population would warrant," said Seltzer. "That probably speaks to the strength of Rochester's economy and its draw from nearby areas."


Groceries on the way
  * Natural Grocers by Vitamin Cottage is proposing to build a 14,000-square-foot store in southwest Rochester. No projected opening date.

* Hy-Vee is planning to build a fourth Rochester location, a 90,000-square-foot store at 4200 West Circle Drive N.W. The goal is have it completed and open by late summer or early fall of 2015.

* Aldi is building a 17,000-square-foot store, its second in Rochester on the northwest side. The goal is to open in April 2015.

November 08, 2014

Mayo Clinic docs make millions by consulting with drug/device companies

Here's some from the lead article in my package of stories about Mayo Clinic doctors and their financial relationships with drug/medical device companies in this weekend's Post-Bulletin.

FYI, the front page article is continued on page A2 and more articles and data are printed on page B4.

An unprecedented disclosure of payments from drug companies shows that $3.07 million for consulting was paid in 2,388 payments to Rochester-based Mayo Clinic researchers, doctors and hospitals during five months last year.

11082014drugmoneygraphicHowever, Mayo Clinic officials point out that they have a strict policy about such payments, which all must be approved by its Conflict of Interest Committee. Such policies, which many medical centers have, are a way of preventing medical professionals from being unduly influenced by money from drug companies in their decisions, such as what drugs they prescribe.

For the same period, Cleveland Clinic staff collected $4.3 million in private money for consulting, while Johns Hopkins Hospital employees took in a mere $4,627.

Dr. Richard Ehman, vice-chair of the Conflict of Interest Committee, said that Mayo Clinic's restrictive policies are unusual within the medical industry.

"We know all of the financial relationships of our staff. That's unheard of," said Ehman.

Cleveland Clinic and Johns Hopkins urge their employees to disclose their private contracts, though they stop short of requiring it in every case, according to their policies posted on their websites. Mayo, Cleveland and Johns Hopkins all agree that a physician or scientist serving as primary leader of a research project are banned from having private contracts with the companies involved.

800px-Gonda_building,_closer_upHundreds of Mayo Clinic doctors are receiving millions from drug companies and medical device makers for private consulting every year, while many others are paid one-third of the royalties generated by their work.

Disclosing all of the financial contracts between private companies and doctors is the goal of the Open Payments website run by Centers for Medicare and Medicaid Services. It features a database of doctors and the money they receive from outside sources. It's now required by the Physician Payment Sunshine Act, which was part of the Affordable Care Act health reform.

In late September, data from August to December 2013 was released on the site. This batch of records includes about 4.4 million payments made to about 550,000 doctors and 1,360 teaching hospitals. However, some of the information reported by private companies is incomplete, confusing and, in some cases, incorrect.

For Mayo Clinic doctors, 100 percent of the payments for private consulting go directly to them. Mayo began allowing such consulting contracts in 1999, when it changed the rule that required all consulting payments to go to the clinic.

The payments for those five months show all different types, including royalties, research money and royalties.

In addition to the consulting payments during those five months, a total of 68 payments totaling $3.01 million were made to Mayo Clinic for research, according to the database.

All research money, like grants, goes directly to Mayo Clinic.

However, physicians or researchers receive one-third of the amount of royalty payments received by the clinic from drug companies, according to clinic policy. During the five months of reports, Mayo Clinic received a total of $1.9 million in royalties.

Just one company -- DePuy Synthes Sales Inc., a subsidiary of heath care giant Johnson & Johnson, reported paying a total of more than $1.15 million to Mayo Clinic or its doctors in 278 payments from August to December.

In the wake of the recent federally-mandated deluge of information about the financial ties between doctors and private drug/medical device companies, Ehman explained that Mayo Clinic does allow its employees to personally profit from such agreements. However, every financial relationship must be approved by the Conflict of Interest Committee.

Mayo Clinic approved 1,003 consulting contracts for 308 doctors and researchers in 2013 to personally work with private companies on their own time. The Mayo Clinic committee, which meets every other week, approved 953 such agreements with 301 individuals in 2012 and 1,071 for 292 employees in 2011.

November 05, 2014

Marco business systems is on the move

A business technology firm will soon move out of its northwest Rochester complex.

Marco Inc. plans to move out of its long-time Rochester headquarters at 3416 Lakeridge Place N.W. to another office complex at 1014 Bel Air Lane N.W., just off 37th Street, says Regional Sales Manager Judy Weller.

The plan is to make the move on Nov. 24 and Nov. 25. Marco, which is based in St. Cloud, has about 18 employees on staff in Rochester, according to Weller.

"We think this will be a more functional space for us," she said. "We have a large garage in our current building, which we Marco:venture buildingnever use."

Marco, which is employee-owned, plans to lease the new office space. It currently leases the Lakeridge Place complex from Jon Eckhoff. He built the 9,794-square-foot facility in 2005 for his company, Venture Computer Systems.

The St. Cloud company entered the Rochester market in 2009 when it bought Venture from Eckhoff. He retained ownership of the building. Eckhoff went on to serve as the executive director of the Rochester Downtown Alliance for five years and now works for Jaguar Communications.

Marco offers a wide array of technology services involving networking, telephone systems, video conferencing, IT consulting as well as selling printers and copiers. It has offices throughout the Midwest in Minnesota, Iowa, Wisconsin, South Dakota, North Dakota and Illinois.

November 04, 2014

Developer to build $15 million apartment complex near Roch. city hall

A South Dakota developer plans to build a $15 million, 110-unit apartment complex near downtown Rochester, plus 179 more apartments on the far northwest side.

Stencil Homes of Sioux Falls, S.D., has purchased three buildings — Buckeye Liquor, the empty Flowers By Jerry shop and the 3rd Avenue Pet Hospital — on Third Avenue Southeast and Fourth Street, across from the Olmsted County Government Center and Rochester City Hall.

11042014stencilaptsDeveloper and builder Nate Stencil and his partner, Sean A. Kaufhold, plan to build a six-story apartment complex with 3,100-square-feet of retail space on the main level and underground parking for residents.

"We're really excited about this project," Stencil said on Monday. He expects construction to begin in early spring 2015 and the complex to be completed in spring 2016.

To clear the way for the project, his company purchased the former flower shop at 410 Third Ave. S.E. for $450,000 on Oct. 15 and followed up with a $600,000 buy on Oct. 22 of the Buckeye Liquor building and nearby parking lots. Stencil bought those properties from Kevin Patton, the owner of Flowers By Jerry.

"I just think it is going to be nice to put something there to revitalize the neighborhood," Patton said.

Diane and Robert Satterwhite, who operate Buckeye Liquor and now lease from Stencil, said they will move their liquor store and continue to serve Rochester. However, no timeline for that has been determined.

The developers also recently purchased the 3rd Avenue Pet Hospital at 414 Third Ave. S.E. Dr. Caroline Baihly, who has owned 3rd Avenue since 1998, is essentially merging her clinic with the Quarry Hill Animal Hospital. After Nov. 24, Dr. Baihly and the other doctors at Quarry Hill will serve her client list.

"At this point, I looking forward to the change," she said.

With the surge of Destination Medical Center-driven development, this was something Baihly expected to happen eventually.

"I looked at the practicality of the whole thing," she said. "It seems when I look at the DMC map that this whole area is included. I think DMC has a lot to do with it."

Stencil said DMC did have something to do with the Third Avenue project, though it cropped up after they already had decided to invest in Rochester. He began working with Rochester Realtor Merl Groteboer about three years ago.

"When we started, DMC wasn't even on our radar. We were well into planning before we even heard about it," he said. "Though the project in downtown was probably influenced by it."

Second project

Stencil and his partner also have lined up property near the 65th Street Northwest interchange across U.S. 52 from the new North Menards store. Construction of the 83-unit Woodland Park apartments began there a few weeks ago. Stencil said he expects Woodland, which architecturally will be similar to the Metropolitan Marketplace complex, to be completed by late spring to early summer.

Work on Stencil's third complex, Kascade Place, is expected to begin nearby soon after Thanksgiving. It will have 96 apartments.

Those apartments, along with the proposed downtown ones, will be priced comparably to other market rate units in Rochester, he said. That means rents ranging from $900 to $1,000 a month.

"We feel very good about the market apart from DMC," said Stencil. "We believe the need for housing is coming as part of Rochester's natural growth."

November 03, 2014

Loop creators to build new restaurant in NW Roch.

Four Rochester restaurateurs plan to follow up the success of The Loop by building a new family place.

Ryan Brevig, Todd Jensen, Derek Link and Josh Paulsen opened The Loop in 2012 in downtown Rochester. It was their third restaurant, though their first in Rochester. Now, the quartet of 1997 John Marshall alumni are ready serve up a new restaurant concept to the Med City.

11032014citizenrestaurant"We've wanted to do this for a long time. We're in a place where we want to expand in Rochester," said co-owner Brevig. "Now, we have a green light to go ahead."

They've purchased land in the northwest development anchored by Costco, with plans to build a 7,800-square-foot restaurant to be called Citizen Kitchen & Bar. It will be positioned near the northeast corner of 19th Street and West Circle Drive.

The tentative plan is "to move some dirt in two weeks" and then get the building framed up before winter hits. If all that happens on schedule, they hope to open in April or May.

While this new creation will have some of the flavor of The Loop, it will have its own identity, explained Brevig. Many of the four partners now have young families, and they wanted this new restaurant to be more welcoming to families than their three restaurants that tilt toward a young adult crowd.

The menu will cover familiar territory for Loop fans. He describes it as "contemporary casual American food."

Opening Citizen is also about giving back to the city they call home.

"That's why we decided on Citizen as a name. All four of us are citizens of Rochester. It seemed to make sense to us," said Brevig.

This will be the fourth upscale restaurant the Loop team have opened in the last eight years. 

Their two Minneapolis eateries, the original Loop and Bar 508, were built in historic buildings in very urban settings. The Rochester Loop was different because it was part of the new construction of the 318 Commons complex. However, it also is a very downtown operation based on a busy city street.

"It will have a little more of a suburban feel," he said. "And this will be the first really stand-alone building we've built," he said.

That means they can do some things that weren't possible in the other properties. Citizen will include a private dining room that will be available for reservation for events. It also will feature a larger kitchen, which will allow Citizen to offer catering.

Making "a significant investment" into Rochester like this means Brevig and his partners also will be adding to the already large workforce they employ. They have 167 people working at the three current properties. The expectation is to add another 47 people to the team when Citizen starts cooking in 2015.