Minnesota Snapshot: Block 518 takes shape in downtown Mankato

Anne Bretts, Special to Finance & Commerce
Finance & Commerce
Date: April 23, 2015

* Edited Article Summary

115 W. Cherry St., Mankato

The Tailwind Group is in the middle of construction on the Ridley Tower, a 50,000-square-foot, five-story Class A office building that’s part of Tailwind’s ambitious $40 million Block 518 redevelopment in downtown Mankato.

The building set for completion in November will be the headquarters for Mankato-based Ridley Inc., a major producer of livestock feed and nutritional products. Ridley has reserved 70 percent of the building.

As Finance & Commerce has reported, Block 518 included two new office buildings, a mixed-use retail and apartment building and a public parking ramp, covering about 70 percent of the block shared with four existing buildings.

The project is expected to cost a total of $40 million by the time the last building opens later this year. That total includes about $10 million in public money for the parking ramp and related infrastructure.

The sleek—and expensive—new offices were a gamble that paid off, Mankato City Manager, Pat Hentges said. The developers tapped into pent up demand for Class A space and have created what he calls “office envy” among some tenants in older buildings.

They had the idea of doing it right,” he said. “They dreamed big.”

Smith believes that he and brother Landon Smith and their partners Reggie Reed and Michael Sather benefited from great timing.

“Keep in mind that there hasn’t been a new office building built in downtown Mankato since 1983,” he said. The average lease rate before the latest construction was $13 to $16 per square foot, but Tailwind tenants have been willing to pay from $17.50 to $21 per square foot,” he said.

Not too bad from a team of four entrepreneurs who started out creating and managing college housing 10 years ago—while Smith was still in his 20’s—and added commercial work in the last five years. They now are doing projects throughout southern Minnesota, but Block 518 is by far their biggest venture.

“It grew organically,” Smith said of the way the Mankato project has expanded. The first finished building in the block, Profinium Place started out as a five-story Class A office building at 100 Warren St. It quickly became a seven-story, 75,000-square-foot building that was 80 percent leased when it came out of the ground, he said.

The two-story parking ramp swelled to four stories to meet demand. It opened in February.

Tenants in Profinium Place, which opened in March, include the Mankato branch bank of Fairmont-based Profinium Inc, CPA firm Abdo, Eick and Meyers and commercial real estate company Lidstrom Commercial Realtors.

ISG, which designed the project has staked out space for new offices in Profinium Place. Builder Met-Con Cos., which has offices in Mankato and Faribault, essentially built its own local office.

The third building also under construction, is an as yet unnamed 40,000-square-foot mixed-use building at 512 S. Front St.  It includes 6,000 square feet of retail and office space on the first two floors and 20 upscale loft apartments on four upper floors.

Mankato – Economic Boom

Paul Vogel, Director of Community Development, City of Mankato
The Connection Minnesota Shopping Center Association
Date: March 5, 2015

Mankato, Minnesota is a major regional center that has been designated as a Metropolitan Statistical Area and has earned several livability awards. Recently, it was reported that Mankato’s economic growth leads Minnesota and is among the top in the nation. Low office and energy costs and a productive workforce make Mankato one of the least expensive places to do business in the Upper Midwest; and, in the top 17 percent of the nation.

2014 was a record year for commercial/industrial development — Wal-Mart, Mills Fleet Farm, the Fed Ex building and some others,” said Mankato City Manager Pat Hentges.” We’ve had the best commercial year since the boom years of the ‘90s with the construction of River Hills Mall.” Jonathan Zierdt believes there is much more to come. “This is one of the biggest years on record and 2015 looks really strong,” said the president and CEO of Greater Mankato Growth. He points to four construction projects already slated to start next year: the downtown civic center expansion, new dining and clinical buildings at MSU, and a new middle school. “Those four projects alone are $150 million.”

The $75 million Wal-Mart distribution center, which has been anticipated for nearly a decade, is nearing completion on the east edge of Mankato. At 454,000 sq ft, it will be 2.7 times as large as Mankato’s Wal-Mart store. About 100 semis a day will move in and out of the site when it opens early next year.

The most high-profile construction projects are taking place on a one-block area of downtown Mankato. Tailwind Group is leading the construction of a seven-story office tower on the corner of Warren Street and Riverfront Drive, a five-story mixeduse building on Front Street and a five-story office tower on the corner of Cherry Street and Riverfront Dr. There were also several new strip malls built this year and others that were refurbished and expanded, often with two or three floors added for rental housing.

To read the full story click here.

UPDATE: Multi-Million-Dollar Downtown Development Takes Shape

KEYC – Mankato News, Weather, Sports
Date: Thursday, February 26, 2015
Updated: Friday, August 21, 2015

Several projects in downtown Mankato are either finishing up or just beginning construction.

Those projects are changing the look in the center of the city.

For nearly thirty years, Mr. Monogram has been located in downtown Mankato.

Owning the business for the past decade Owen Dundas has seen the area around his shop change for the better.

Dundas says, “The fact that we’re doing this renovation and making changes and trying to invite more people downtown. I just think that it’s going to lead to good things.”

Right across the street, the Tailwind Group has just started construction on The Residences of 518. The facility is to used for both retail and living spaces.

Reggie Reed, the director of operations for Tailwind Group says, “For 518 some residential leases are already signed up. It looks like the demand is definitely there. Our lease agents are busy working on that.”

Dundas says, “It’s going to be exciting to see. There’s going to be new tenants in there and hopefully that’s going to lead to more business for us and our neighbors.”

Around the corner, the new tower changing Mankato’s skyline is wrapping up final touches as new tenants will be moving into Profinium Place within the next 30 days.

Reed says, “It was planned for January of 2015 when we said we could provide them with their personal space. Now it’s up to them to finish it off. Each tenant space is based upon their own timeline based upon what their move–in day is.”

Dundas says, “It’s really amazing to see how quickly that’s come together.”

Reed says, “I think this town will be positively unrecognizable in the next couple of years.”

The first tenant in Profinium Place is the accounting firm, Abdo, Eick and Meyers. They’ll be moving in next month.

FLYING HIGH: TAILWIND GROUP MAKES ITS MARK IN MANKATO

Tim Krohn

Minnesota Valley Business Magazine

Date: January 2015

When Kyle Smith was working full-time as a pilot for corporate clients more than a decade ago, he would spend his down time renting a car and driving around communities across the country. He’d notice commercial and housing trends, like what tenants in strip malls were popular and the types of amenities college housing complexes were offering.

That curiosity would help him and some business partners as they later created Tailwind Group and dove into commercial and residential development in Mankato and across the Upper Midwest.

“We looked at student housing in the southwest and southeast and duplicated it here in Mankato,” said Smith, who, at 35, is one of the most active developers in the area and has one of the highest profile projects in local history going on along South Front Street.

That duplication of student housing led to College Town, a gated, 114-bed housing community located near Minnesota State University. The community includes 80 individual buildings with amenities students expect today. “It’s different than it used to be. They want their own bedroom and bathroom and all the amenities,” Smith said.

That eye for trends helped Smith and his partners – including long-time friend and fellow pilot Reggie Reed, brother Landon Smith, and Michael Sather – to begin investing in and developing other student housing and commercial projects including strip malls. But it’s the $40 million project, including a parking ramp and three towers, that is transforming downtown Mankato and pushing Tailwind’s profile from an under-the-radar business to major developer.

To read the full story click here.