Winona mounts development push

A public-private partnership in Winona with $250,000 in seed funding aims to revitalize the Mississippi River town just in time for an anticipated economic and development boom in southeastern Minnesota.
Nestled about 40 miles away from Rochester to the west and La Crosse, Wisconsin, to the southeast, Winona has stood in the shadows of its bigger neighbors for decades. But as Rochester and La Crosse capitalize on growth opportunities of their own, Winona is looking for a piece of the action.
Winona planners want to bolster downtown hospitality offerings beyond the existing night life — including the Legendary Tavern — that cater mostly to the city’s substantial student population. Submitted photo: City of Winona
The Opportunity Winona initiative launched this month with funds from the Winona Port Authority, the city’s economic development arm. It aims to leverage those dollars plus other state and local subsidies to finesse projects that would reinvigorate the downtown area.
It hasn’t doled out any funding yet, but the effort – crafted jointly over the past year by the city, Port Authority and the Winona Chamber of Commerce – comes as development interest in the area slowly ticks up.
“For a long time, you couldn’t even sell a building in downtown Winona,” Winona Mayor Mark Peterson said. “Now you see people looking at downtown differently and as an investment.”
Peterson has worked downtown as executive director of the Winona County Historical Society for more than three decades, during which he has seen the area mostly fail to support lasting growth. Increased development activity over the past few years is encouraging, he said, but it’s not enough on its own.
A more focused approach to fostering development, though, could be the answer.
The city doesn’t have specific development targets for the Opportunity Winona push, but city officials say it makes sense to replace a hotel and housing that were knocked down to make room for the new $150 million to $175 million Interstate Bridge, a main connector into downtown. Also known as the Highway 43 bridge, it spans the Mississippi to link Minnesota and Wisconsin.
Several parties have expressed interest in building a hotel at the site of a shuttered lumberyard near the river, at 2 Washington St. In addition, city planners say, there’s room – and demand – for higher-end housing and workforce units.
Existing housing downtown primarily serves Winona State University students. A mix of other uses to diversify downtown activity would make it more accommodating to a wider range of people, Winona development coordinator Myron White said.
“We want more offices, more jobs downtown. That attracts so much more activity,” he said. “We’ve got a long list.”
The historic Latsch building in downtown Winona is home to one of the area’s first commercial rehabilitation projects in years, but city officials launching a new development initiative predict an onslaught of similar efforts will reshape the city. Submitted photo: City of Winona
Any future projects would dovetail with a comprehensive plan developed in 2007 and other downtown-specific development frameworks. Improvements in and around Levee Park along the river, for example, are designed to facilitate waterfront access.
Officials are considering fresh landscaping and easier access for boaters in addition to pedestrian and bike paths. Such upgrades would help make the park and the surrounding riverfront more of a “front porch” to downtown – and a draw for developers, said Lucy McMartin, Winona’s economic development director.
“The riverfront is a critical piece of what has to be redeveloped,” she said. “It’s what our city was built on – we’re a historic river town – and it’s a very important part of the development and redevelopment of downtown Winona.”
Next year, the city will invest more than $600,000 total for riverfront work at the park and beneath the new bridge. Even without the $250,000 pledge to jump-start Opportunity Winona, the funding marks the city’s biggest financial commitment to downtown infrastructure in years, officials say.
The Port Authority funding will primarily cover “soft costs” tied to project implementation, including conducting studies, coming up with financial projections and putting together development agreements.
“There’s already a pretty large commitment of money for a city of our size to get some of these things going in the downtown,” Peterson said.
The city plans to offer incentives, including tax increment financing, to get projects done. Winona could also apply for grants and other funding it could dole out to support redevelopment, and it will consult with state officials on other resources available to developers.
“This is far more than a $250,000 undertaking, that’s for sure,” White said.
Much of the budding development in Winona centers on its historic downtown area. Many old buildings in that part of town are open for redevelopment, and a transformation that started a few years ago is steadily taking hold.
Several historic buildings downtown have been converted in recent years, mostly into new housing units. Developers Richard Huber and Allan McCormick in 2013 took on an abandoned 16-unit condo project downtown after the project, in the works for years, stalled out under other ownership.
The historic Choate building in downtown Winona was converted to student housing, a model the city is hoping other developers follow as part of a new public-private partnership to give the area a makeover. Submitted photo: City of Winona
Plus, Winona developers Peter Shortridge and Mike Gostomski unveiled plans last year to put $3 million into an overhaul of the Latsch Building, a downtown landmark built in the 1860s that will find new life as a 16,000-square-foot office space.
The Latsch project and a bulk of the housing conversions tapped into historic tax credits – one pathway to new growth for Winona after the state approved its credit program in 2010.
In Minnesota, the credits can shave 20 percent off costs for qualified historic rehab projects, potentially doubling the savings available through a federal program. Historic districts in Winona on Second and Third streets downtown are both ripe for new uses.
“We have a significant number of buildings that could potentially use tax credits as a resource for renovation,” McMartin said. “Game-changer is a very good word for it.”
Winona planners are looking to La Crosse and other old river towns for inspiration. They’ve also got their eyes on Rochester, which earlier this year launched one of the biggest economic development pushes in state history, with $6 billion in investment expected through the 20-year life of the Destination Medical Center effort.
But Winona doesn’t see the massive project as competition.
“I think we work together,” McMartin said. “We’re a region and as their areas grow, that can help us. It’s an opportunity for Winona.”
Winona’s initiative is an outgrowth of years of talks over how to reinvigorate a downtown that has struggled to find vitality outside its student population and the services that cater to it.
The growth push picked up steam in the last year after Winona manufacturers – some of the city’s key economic drivers – complained they couldn’t find enough skilled workers willing to live and work in Winona.
The Nostallja Studio salon is nestled on Third Street in Winona, a corridor lined with historic buildings that the city hopes will stoke redevelopment interest as part of a $250,000 initiative to reshape the downtown area. Submitted photo: City of Winona
“When they talked about recruiting employees from out of the city, one of the things they said is a more attractive downtown would certainly help in the recruitment of employees,” White said.
Winona had a population of more than 27,300, as of 2014. Its average household earns $38,353, below the $59,836 state average.
There’s no set timetable for Opportunity Winona, but it’ll take a while before any lasting change takes hold. Planners acknowledge it’ll take time for developers to cozy up to Winona and build buzz after so many quiet years.
Still, they say they have to start somewhere – and soon – to compete on a regional and statewide scale.
“There’s a sense of urgency here,” White said. “We’d like to get this moving forward.”

Related content:

Destination Medical Center development plan begins taking shape
New Chamber of Commerce program aims to plug workforce gaps
Interstate Bridge project information from MnDOT

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