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Because she was relocating from St. Paul, the 43-year-old director of SMU's new women's leadership institute didn't want to buy a house right away, so she looked at apartments downtown.
Vaughan had noticed the Washington Crossing building under construction when she interviewed for the job in January, so in March she came to look at the former Winona Middle School. Even in rough condition, she fell in love with the building's high ceilings and giant windows.
She took a spacious two-bedroom apartment in what was once the 1915 building's library a serendipitous home for someone with a master's in English who worked part time in a bookstore just to get an employee discount.
"I love this, being able to walk everywhere," Vaughan said while decking her new digs with Christmas greenery. The public library is around the corner, a grocery store three blocks away.
"I can even walk to Wisconsin," Vaughan said, adding that she recently made the trek across the Interstate Bridge.
Vaughan's apartment is part of Winona's newest development a $7.8 million project that turned two unused school buildings into 62 downtown residences while preserving the historic buildings on Broadway and could be a harbinger of the downtown's future.
The key to downtown revitalization, one of the most often heard phrases among city council and mayoral candidates this fall, is residential housing, said Phil Carlson, a Minneapolis-based urban planning consultant.
Over the past 50 years, downtown Winona has lost the population density necessary to support downtown businesses, Carlson said. Average family size has dropped, fewer people live in the homes and development has moved to the edges of town.
"There's nothing unusual about what has happened in Winona as far as development on the outskirts," Carlson said. "Downtown suffers because it's not easily auto-oriented and there's no resident population to support the businesses.
"Downtown residence is necessary."
"I think making your downtown a 24-hour business makes sense," said Judy Bodway, Winona's director of economic development. "It's a trend on a national basis. We've been doing this for years. We started creating apartments on second floors with public funds in 1990."
But downtown redevelopment is not cheap. Existing buildings limit what builders can do, and often require expensive abatements and demolition before new construction can begin.
"Redevelopment is always more difficult than new development in a cornfield," Carlson said.
"I really believe that if everybody on the city staff and elected officials could wave a magic wand and make it happen they would," developer Jon Krofchalk said of downtown redevelopment. "The problem is, you need someone with money."
Washington Crossing is the work of MetroPlains Development, a St. Paul-based company that specializes in converting historic buildings into apartments. MetroPlains has completed about 40 such conversions and is working on one now in downtown Albert Lea, but such development does not happen by market force alone, said the company's development coordinator, John Errigo.
Instead, MetroPlains uses a combination of tax breaks and subsidies designed to promote historic preservation and affordable housing.
"Market rate projects don't get done unless they're very high rent," Errigo said. "Even in Minneapolis they don't get done unless they're for sale or assisted living. That's what can be privately financed. Not rents of $625 and $725 a month."
MetroPlains financed the project with tax credits they received for preserving the 1915 and 1925 buildings, which they bought from the Winona Area Public School district for $5,000. They also received income tax credits from the federal office of Housing and Urban Development in exchange for making 60 percent of the apartments affordable.
Winona City Manager Eric Sorensen credits Bodway with bringing the school board together with MetroPlains and helping secure some of the alternative funding.
Although development is easier in a cornfield, that isn't always the best solution, said developer Stuart J. Morgan, who has proposed to buy the county-owned Plaza Building and replace it with a multi-story building that would combine residential and retail uses.
"Downtown development is inherently more environmentally sound than suburban sprawl," the St. Louis Park architect and developer said. "Redevelopment uses centrally located land and existing resources efficiently, preserving bluffs, farmlands and prairie."
And with downtown development, cities don't have to extend utility services like sewer and water for miles into the countryside.
Morgan recently bid $327,000 for the Third Street mall that the county bought in 1993. Morgan's bid fell almost $500,000 short of the county's only other offer. Morgan said his bid for $50,000 more than the assessed value of the land under the Plaza Building represented the most he could afford to spend considering the cost of relocating the building's tenants and tearing it down.
Morgan will present his plan to the county board at its Tuesday morning meeting. Sorensen also plans to speak to the board and express the city's support for Morgan's idea.
"I really think it should be a $1 property," Morgan said, noting that MetroPlains was able to buy the former school buildings for $5,000.
To build a six-story structure on the site would cost about $9 million, Morgan said.
Morgan said his project which could include a restaurant, retail stores and as many as 80 housing units, would ultimately provide greater returns in the form of increased tax revenue.
Over 30 years, he said, his development could generate additional revenue worth about $2.6 million today. Increasing the tax base does not translate to an increased levy. But, Morgan said, there is a direct relationship between what the county can tax and what it does.
"I have no doubt that type of redevelopment could revitalize the entire neighborhood," Morgan said. "The money that people spend in nearby businesses has a multiplier effect."
"The fact that somebody wants to invest in downtown is always good," said Midtown Foods owner Tom Thompson. His store's business has not increased since the completion of Washington Crossing, but neither has it dipped since the opening of Wal-Mart.
"If more people lived downtown, more people might open businesses there," said Amy Marks, owner of Blooming Grounds Coffee House on Third Street.
Regardless of the economic impact, Morgan said, his project would improve the block. His plans call for building materials like brick and pilasters that would be compatible with the surrounding historic buildings, but are too expensive for an unsubsidized project.
"Where the Plaza Building is now is kind of a black hole," he said. "It's a completely internal mall that turns its back on the street. All street activity, all commerce stops there."
Reporter Chris Hubbuch can be reached at (507) 453-3511 or chubbuch@winonadailynews.com.
