The newly sold City Center Hotel in Mankato is at the center of a planned $56 million investment in the city’s core business district.
Hotel Mankato LLC, a group that includes Landmark Real Estate, paid $5.4 million for a 45-year-old hotel at 101 E. Main St., according to a certificate of real estate value made public Thursday. MHIH of Yankton, South Dakota, is the seller.
The sale price represents less than a tenth of the total investment planned by the new owners, who intend to combine the City Center with the adjacent Landmark Center building to create a combined 173 hotel rooms with new amenities, including solar panels and a rooftop lounge.
TPI Hospitality of Willmar is a partner in the development, said Jon Kietzer, owner and broker with Landmark Real Estate in Mankato.
Kietzer told Finance & Commerce Thursday that the City Center Hotel is connected by a “skywalk” to the Mankato Civic Center, which includes a 6,500-seat arena, 2,200-square-foot Grand Hall, a convention center and meeting space.
The original plan was to turn the City Center into a Holiday Inn. The hotel was built in 1978 under that flag, Kietzer said.
Instead, the new owners intend to increase the number of rooms by converting the Landmark Center into a 40-room hotel, which will operate under the same brand as the City Center, Kietzer said.
The Landmark building will also include upscale apartments on the fourth floor, Kietzer said in an email.
Kietzer, who has owned the Landmark Center since 2014, said there’s a need for more hotel rooms in downtown Mankato to complement other investments. In recent years, he said, downtown Mankato has seen about $175 million in new development.
“This is sort of playing off all the previous developments that happened recently,” he said.
Recent additions to downtown Mankato include the 70,000-square-foot Eide Bailly Tower, and the Bridge Plaza mixed-use building, both of which are close to the City Center Hotel.
The Profinium Place Tower, a seven-story Class A office building developed by The Tailwind Group and built in 2014, was also a springboard for new development.
Along with the five-story Alltech building, the Profinium Place Tower, was “transformative for the downtown area,” Andy Wilke, director of business development and public affairs with Greater Mankato Growth, told Finance & Commerce in 2022.
One of the missing pieces is lodging, Kietzer said.
“We need more hotel rooms,” he added. “In recent years, we’ve lost a lot of conventions because of the lack of quality hotel rooms down there. That is one of the biggest needs that we have in downtown.”
Paul Vogel, Mankato’s community development director, said the city has not yet received a formal application for the hotel plans.
“We reviewed a previous proposal for the adjacent [Landmark] building, but that includes apartments above the ground floor and some hospitality on the first floor. It appears that those plans will be changed,” Vogel said in an interview.
Vogel said the hotel renovation is “obviously needed and helps support the convention business and other events at our event center.”
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