After an about-face that shocked city officials, plans to bring a Dollar General to Wanamingo have abruptly been canceled, leaving the Wanamingo EDA’s visions of a modestly sized commercial district along Highway 60 facing a decidedly uncertain future.
The project, which could have provided city residents with the opportunity to meet their basic shopping needs without traveling to Zumbrota or Kenyon, had appeared set to move ahead, despite sticking points between the city and developers over access to the highway.
While Dollar General preferred a simple access drive, city officials wanted to build a full extension of Hill Street to accommodate the project and future development, with the cost split between Dollar General and Wanamingo taxpayers.
After potential environmental cleanup costs led developers to abandon their initial plans to put its store at 677 3rd Ave., the former site of 60 Stop gas station and convenience store, they turned their attention to a much larger adjacent site.
With just 1.5 acres needed to host the new store but local farmer Lew Groth looking to sell 14.8 acres, Dollar General planned to sell most of the property to the Wanamingo EDA for just $1, enabling future development along the key thoroughfare.
City officials preferred extending Hill Street as a way to connect city residents to the store and increase the value of the EDA owned property. Even if the city had approved plans for a private access, MnDOT would have had final say over whether to approve or reject the plan.
Had MnDOT approved the proposal for a private access to Dollar General’s store, city officials feared that the agency would block other requests for access, landlocking the nearly 10 acres of the site set to be owned by the EDA.
In addition to the street extension, city officials pushed hard for a shared stormwater detention pond to serve the entire property so as to ensure proper water flow. In total, the cost of the street and water improvements was projected at nearly $1 million.
Initial development agreements indicated that this cost would be split 50-50 between the city and Dollar General. Though the Dollar General developers did not raise any immediate objections, city staff was still prepared with options to reduce Dollar General’s share.
Preliminary agreements were approved by the council and EDA at their January meetings, but the developers backtracked less than two weeks later and again demanded that they be allowed to connect to Highway 60 via a private drive.
According to Wanamingo City Administrator Michael Boulton, project broker James J. Wilding Jr., of JABE Companies, explained that Dollar General is moving away from development in cities like Wanamingo, which have a population of under 3,000 residents.
While the development had been allowed to proceed, because a purchase agreement had already been signed, Dollar General apparently gave the developers strict budget parameters in order to continue with the project.
Combined with rising construction costs and interest rates, the additional expense of paying for part of the street extension pushed the project over budget. Boulton offered several options to reduce the developer’s share of the project, which were flatly rejected.
Boulton told First Link LLC President Lou Pappan that while he could bring the matter back to the Council and EDA, he did not have the authority to fulfill the request for immediate city support of a private entrance to the Dollar General site.
Rather than bring the issue back to the Council and EDA, Pappan opted to abruptly drop plans for the Wanamingo development. Boulton accused Pappan and Wilding Jr. of unprofessional conduct and said that the “final negotiations” didn’t appear to be in good faith.
“It was like they’d already made up their mind and were looking for a way out,” Boulton said.
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