$40M Proposal For Old Montgomery Ward Site in Downtown Rochester
Rochester, MN (KROC-AM News) - The owners of a more than 85-year-old building in downtown Rochester have approached the city with a request for public assistance on a project that would retain much of the historical features of the property while expanding it vertically and converting vacant office space into a 136-room hotel.
The building at 102 Broadway was built in 1937 and for the next several decades was known as the Montgomery Ward building. It currently houses the downtown post office and the offices of an investment firm, but according to city officials, it is about 70% vacant.
According to city documents, Utah-based Terratron Incorporated has teamed up with Rochester Broadway Investments to develop plans to refurbish the existing structure and then add another eight stories to the building at a cost of about $40.5 million. The plan calls for a restaurant on the street level of the building, mixed retail space on the second-floor skyway level, and the new Element by Westin Hotel on the upper floors. The Marriott-owned hotel brand features extended-stay lodging with apartment-like amenities to facilitate longer stays in the city by Mayo Clinic patients and their families.
Most of the requested public assistance would come in the form of $3.5 million In Tax Increment Financing. The request also includes 45% of the parking revenue generated by visitors staying in the hotel and using city parking facilities overnight. The documents say City Staff has reviewed the request and "believes that the amount of assistance requested is viable and reasonable based on the project benefits."
The review states the building has experienced a long period of significant vacancy and the conversion of the neighboring Double Tree Hotel into University of Minnesota-Rochester housing has removed approximately 200 hotel rooms from the downtown market. City staff also noted the proposed hotel's close proximity to the Civic Center and that it would add street-level retail offerings in an area of the downtown where there are currently none.
Members of the City Council are being asked individually about the proposal to gauge their interest and allow the property owner to make a decision on whether to pursue additional design and engineering work. The letter from the property owners requesting the assistance includes a "rough" timeline that suggests that the construction project would take 14-16 months and that it could be completed in early 2025.