Hospital won’t move into downtown building

Published 8:03 am Sunday, March 18, 2012

A private-public partnership that could have brought Mayo Clinic Health System in Albert Lea to downtown’s Freeborn National Bank and Jacobson buildings is not moving forward, according to city and hospital officials this week.

Mark Ciota, CEO of Mayo Clinic Health System in Albert Lea and Austin, said in a written statement Thursday that though the hospital has a tradition of partnering with the community, it will not be able to move forward with this project.

“Because of current economic conditions, we are experiencing capital constraints that prevent us from participating in the development of the Freeborn National Bank and Jacobson buildings,” Ciota said. “We continue to be interested in partnering opportunities with the city that contribute to our community’s growth and look forward to an economic upturn that better supports those efforts.”

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The city and hospital had been in serious discussions about the partnership for about two years.

“It was disappointing that we couldn’t find a way to make the project work with Mayo,” said Dan Dorman, executive director of the Albert Lea Economic Development Agency. “But given the reality of what’s there, we’re going to reach out the best way we can and try to find a possible use for it.”

Dorman said the city hopes to find other ways to work with the hospital — the city’s largest employer — in the future.

Albert Lea City Manager Chad Adams said the city will begin to move forward with Plan B options for the former bank building and the second, third and fourth floors of the Jacobson Apartments building. The first floor is the home of the National Vitality Center.

Dorman said this could involve looking into the feasibility of housing in some of the upper floors. He noted while he doesn’t think there’s a demand for high-end apartments or condominiums downtown, there may be projects utilizing low-income housing tax credits that could be feasible. He noted the success of the Lea Center just around the corner from the buildings, which has a waiting list to get in.

The Freeborn National Bank and Jacobson buildings were originally constructed in the 1920s but have been vacant since 1995, according to the city directory.

They were purchased by the city for $75,000 on April 19, 2001, out of concerns that they might be lost. City officials hoped the buildings could be the key to revitalizing Albert Lea’s downtown business district.

In 2006 and 2007, the city invested $1.7 million for the exterior renovations of the bank building, at the corner of Broadway Avenue and William Street.

The interior has not been remodeled.

Dorman said the length of time that the city has owned the two buildings without being able to find a developer or tenant speaks to the difficulty of projects like this.

“We should be open to any kind of arrangement that makes good long-term sense,” he said. “We want a project in there that’s successful.”

This means recruiting someone that has not only the financial ability to complete the project, but someone with a plan of how to do it, he noted.

“We don’t want to do something that looks good in the short run that in the long run doesn’t make sense,” Dorman said.

He estimated the cost for interior renovations on the low end would be $5 million.