MN Snapshot: Rochester developer tests Mankato market

Wednesday, November 1, 2017

Finance & Commerce

 

MN Snapshot: Rochester developer tests Mankato market

Editor’s note: Minnesota Snapshot reports interesting sales and development projects happening throughout Minnesota. The transactions are based on the certificates of real estate value filed with the state Department of Revenue, copies of which are available with the story here. Other items may come from government agendas and news releases.

Developer Todd Severson, founder and president of Rochester-based TLS Cos., originally came to Mankato looking for a site for a senior housing project.

Now he’s tweaking the details on a plan for the 34.6 acres on the fast-growing east side of the city of 42,000 residents, about 80 miles southwest of the Twin Cities. The TLS site runs from just south of the retail area along Bassett Avenue to Hoffman Avenue, just north of the new $50 million Prairie Winds Middle School.

A sweeping 3-D video rendering of the site, called Prairie Winds Development, includes models of everything from apartments, restaurants, retail, a hotel, and day care center to a Kwik Trip convenience store and, of course, that senior housing project.

Severson plans to develop some of the projects and sell most of the parcels to others to develop during the next three years. He concedes it’s an ambitious plan.

“I haven’t done anything this large,” said Severson. He’s no rookie, however. He spent more than a decade with Rochester-based Weis Builders before launching his own company in 2015. The TLS online portfolio includes apartment, retail and mixed-use projects in and around Rochester.

An entity related to Severson’s company closed in September on a deal to pay a shade more than $6 million to buy the Prairie Winds Development land from Mankato developer Mike Drummer, who owned 100 acres north of the new school. The purchase price for the TLS land works out to $174,240 per acre.

Drummer is building apartments and homes on some of the land he retained.

Severson said he plans to begin construction within the next three months on the Kwik Trip, a retail building, and the 101-unit first phase of the senior project, which calls for 60 to 80 units in the second phase. Severson hasn’t disclosed costs for the projects or the overall development.

Excelsior-based Oppidan also has acquired land to the east of the TLS site, where it plans to spend about $20 million to build a 119-continuum-of-care senior project. It will be the seventh senior project Oppidan has built in partnership with Ebenezer, part of Minneapolis-based Fairview Health Services.

“We have a deal in place,” said Paul Tucci, vice president of development for Oppidan. “We ran a market study and it said this market needs it.”

Paul Vogel, director of community development in Mankato, said a 2016 update to an earlier city housing study highlighted a need for market-rate and affordable housing.

“It’s a little more fuzzy in the senior market,” said Vogel.

He declined to comment on Severson’s plans or whether the market can support two senior projects. “We haven’t seen anything from them yet,” Vogel said of TLS.

The site plan has been approved, but the development still needs a retention pond and some access roads as well as reviews of each project, he said.

Tucci and Severson are confident their plans will work, and will give seniors options that will free up existing homes to meet the demand from younger buyers.

The question now is how much new development the area can support.

With both projects set for construction, the answer should come soon.

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