Resolution accepting and approving a Community-Wide Assessment Grant Cooperative Agreement between the City of Mankato and the U.S. Environmental Protection Agency.

Resolution authorizing the City Manager to apply to Minnesota Housing for a Lead Safe Homes Grant.

Report on Change Order 3 for Capital Improvement Project 11100; Mayo Clinic Health System Event Center Arena Audio System Improvements.

Report on project and Change Order 1 for Capital Improvement Project 11200; Land of Memories Park.

Report on project and Change Orders 3 & 4 for Capital Improvement Project 11206; Hiniker Parkway and Hiniker Pond Park Parking Lot.

Resolutions accepting the feasibility report and authorizing the City Manager to enter into a contract with Interstate Power Systems through the Sourcewell Cooperative Purchasing Agreement for Capital Improvement Project 11146; Public Works Center Generator Replacement.

Resolutions executing professional services and guaranteed maximum price amendment for the Airport Traffic Control Tower Construction Project.

Resolution applying for airport tower construction funds through the 2027 Infrastructure Investment and Jobs Act FAA Contract Tower Competitive Grant Program.

Resolution authorizing the State of Minnesota Hazardous Materials Emergency Preparedness (HMEP) grant application for Training.

Resolution authorizing the City Manager to execute a Toward Zero Deaths Grant Agreement with the Minnesota Department of Public Safety for traffic safety enforcement.

Resolution authorizing application for the Fiscal Year 2026 Bulletproof Vest Partnership Grant Program.

Set October 26, 2026, as the date of public hearing for consideration of a business subsidy agreement for an equipment loan to Verdant Agritech, LLC.

Set October 26, 2026, as the date of public hearing to review the Ordinances amending Chapter 10 of Mankato City Code related to permitted and conditional uses in the R-3, Limited Multiple-Family Dwelling District and the R-4, Multiple Family Dwelling District; by request of the City of Mankato.

Mr. Konz reported that Jones Haugh & Smith, on behalf of property owner Scott Brown, submitted an application for Final Plat approval of Metcon Addition and a Conditional Use Permit (CUP) to replace three wetlands within the proposed development area. He noted that the Final Plat creates three lots within Block 1, two outlots, and a new public cul-de-sac named Ponderosa Court. The subdivision also includes a public stormwater retention pond on Outlot B and a potential future extension of Evergreen Drive. He indicated that the three lots have been rezoned to Light Industrial, and Met-Con intends to construct an office and shop on Lot 2. He explained that the development will provide access to Lots 1 and 2 from Ponderosa Court, with a potential shared access connection to Adams Street for Lots 2 and 3. The applicant must construct a dedicated turn lane on Adams Street and install a sidewalk along Ponderosa Court while maintaining the existing bike lane. Evergreen Drive is being platted for potential future use if traffic operations or safety concerns arise. He added that a development agreement will address stormwater improvements and dedication of Outlot B to the City. It was noted that Outlot A will require future subdivision before development.

Mr. Konz stated that the proposed development will permanently impact three seasonal wetland basins totaling approximately 18,792 square feet (0.4314 acres), as their locations conflict with the planned subdivision. The applicant proposes to purchase 0.8628 acres of wetland bank credits, representing a 2:1 replacement ratio, from Guentzel Family Farms Wetland Bank in Blue Earth County. The Technical Evaluation Panel (TEP) reviewed the proposal on September 16, 2026, requested revisions, and recommended that the replacement could proceed subject to those revisions. The applicant has since submitted an updated wetland replacement plan to the TEP.
Mr. Dieken moved and Mr. Mettler seconded a motion to approve the Resolutions approving Final Plat review of Metcon Addition, and Conditional Use Permit to allow a wetland replacement on the subject site (Southwest Quarter of Section 11, Township 108 North Range 26 West, Blue Earth County); by request of Jones Haugh & Smith, with permission of the property owner, Scott Brown. The motion carried unanimously.

Mr. Konz indicated that RJC Rental Properties, LLC is requesting a conditional use permit to operate Golden Anchor Treatment Services, an Intensive Outpatient Treatment (IOP) clinic, at 1618 3rd Avenue, with 1614 and 1620 3rd Avenue included for parking and access purposes. He noted the site was previously occupied by House of Hope. The proposed clinic will provide outpatient substance use and mental health services, including individual and group counseling, assessments, family education, relapse prevention, case management, and recovery education. It was stated that no overnight or residential services, medication distribution, or exterior site improvements are proposed. The facility will operate Monday through Friday, with a maximum of 16 clients present at one time and a maximum of four employees, as stated by the applicant. Services will be provided indoors by appointment, with staggered scheduling to minimize traffic and parking demand.

Mr. Konz confirmed that all three properties are zoned R-3, Limited Multiple Dwelling District, where hospitals and medical clinics are conditional uses. The proposed IOP program meets the City Code definition of a clinic. The applicant intends to obtain the applicable Minnesota Department of Human Services license under Minnesota Statute 245G.

Mr. Konz stated that the site plan identifies 15 existing parking stalls, exceeding the 14 stalls required based on approximately 2,100 square feet of office space and five employees. Recommended conditions address compliance with parking requirements, striping of parking stalls, shared access and property ownership or recorded easements, and parking availability for future uses of 1620 3rd Avenue. Additional conditions address lighting, signage permits, refuse screening, indoor operations and noise, licensing, operating hours, and maximum occupancy. The applicant must also provide a staff-approved plan for client pickup and drop-off, deliveries, and vehicle queuing before occupancy, with no queueing permitted to block parking stalls or the alley. Any future use of storage areas for purposes other than storage will require additional review and approval through an amended conditional use permit.

Mr. Konz noted the city engineer reviewed the submitted traffic data, which estimates approximately 40 daily vehicle trips, including 20 trips during each peak hour, assuming clients and staff arrive separately. The additional traffic is not anticipated to adversely affect surrounding roadways. The site has sidewalk access along 3rd Avenue and is within the Kato Flex service area, allowing eligible clients to access curb-to-curb transit service. He stated that the applicant held a neighborhood meeting on September 9, 2026. A recommended condition requires the applicant to provide a local contact or complaint hotline before occupancy to address neighborhood questions and concerns, including those arising outside regular business hours.

Ms. Hatanpa asked if there would be any outdoor space needed, where a fence would be necessary? Mr. Konz advised that no, there is no outdoor space, the space that is there will be used for parking.

Mr. Mettler moved and Ms. Hatanpa seconded a motion to approve Resolution approving a Conditional Use Permit to allow the operation of an Intensive Outpatient Treatment Clinic in the R-3, Limited Multiple Dwelling District (1618, 1620 and 1622 3rd Avenue); by request of RJC Rental Properties LLC. The motion carried unanimously.

Mr. Konz reported that Kody Schendel is requesting a conditional use permit to expand the existing New Hope Board and Lodge recovery housing facility, along with a variance to reduce the required rear yard setback from 66 feet to 25 feet in the R-3, Limited Multiple Family Dwelling District. He mentioned the facility, which has operated under a conditional use permit since 1997, currently provides 18 bedrooms for individuals seeking recovery housing, along with shared living spaces, offices, laundry facilities, and dining services. The revised proposal includes a two-story, approximately 3,150-square-foot addition with 16 new bedrooms, each with a private bathroom, and shared kitchen, dining, and living areas on each floor. He stated the expansion would require 28 additional parking spaces, based on city requirements, which may be provided onsite or on an unencumbered lot within 500 feet. Alternatively, the applicant may seek reasonable accommodation under the Fair Housing Act for parking flexibility. 

Mr. Konz indicated the requested variance would allow the addition to be constructed 25 feet from the rear property line, revised from the originally proposed 11.2-foot setback. The applicant contends that the variance aligns with the intent of the zoning ordinance and the City’s Comprehensive Plan by supporting diverse housing options, infill development, and stable recovery housing. The applicant also cites the property’s existing layout, building placement, access points, and utility corridors as unique circumstances that limit feasible expansion options. He advised that the proposed addition is intended to complement the existing building and surrounding neighborhood, with parking and landscaping designed to minimize impacts. A neighborhood meeting was held as recommended by staff, and the applicant reports receiving support from adjacent stakeholders.

Mr. Laven asked if the increase of 16 beds, does this pose a significant safety risk for the community? Mr. Clifton replied that while no behavioral conduct can be predicted, based on the clientele, there will be an increased call load.

Mr. Mettler wondered if the facility would lend housing to people that are in between treatment and independent housing. He also asked if there were concerns in the community. Mr. Konz responded that only one person showed up to the meeting; and however, after talking to the owner, they were comfortable.
 
Mr. Mettler moved and Mr. Dieken seconded a motion to approve the Resolutions approving a variance to decrease the rear yard from 66 feet to 11.2 feet in the R-3, Limited Multiple Family Dwelling District; and amending the Conditional Use Permit to construct and operate a 16-bedroom expansion to an existing recovery residential facility (1429 3rd Avenue); by request of Kody Schendel. The motion carried unanimously.

Ms. Kramlinger reported that on August 10, 2026, the Mankato Economic Development Authority reviewed a proposal from Skillbred Development, LLC, to develop the property at 2004–2134 8th Avenue, known as the Quarry View project. The development would prepare infrastructure and building pads for 16 residential lots intended for for-sale townhomes. She stated the Developer is requesting $485,000 in pay-as-you-go tax increment financing (TIF), with 5% interest, to reimburse eligible infrastructure and site preparation costs. Rather than providing upfront funding, the City would make payments twice annually from new property tax revenue generated by the development, after retaining 5% for administrative costs. Reimbursements are projected for 2029 through 2044, for a maximum of 15 years, and are contingent on available tax increment and the Developer’s compliance with the development agreement. She advised that the City would not be responsible for any revenue shortfall, as the TIF note is payable solely from the project’s generated tax increment. Baker Tilly reviewed the proposal and concluded that the project is unlikely to proceed without TIF assistance.

Ms. Kramlinger confirmed the project aligns with the City’s Economic Development Policy and Strategic Plan by expanding affordable homeownership opportunities and addressing identified housing needs. Under state requirements for Housing TIF districts, all 16 units must initially be purchased and occupied by households earning no more than 115% of the area median income (AMI). During the TIF period, existing property tax revenue will continue to be distributed to the local taxing jurisdictions, while only the additional revenue generated by the new development will be used for eligible project costs. She stated that after the TIF district’s term ends, all property taxes will return to the regular tax rolls. The Planning Commission approved the development district’s consistency with the Comprehensive Plan on September 23, 2026. 

Ms. Hatanpa moved and Mr. Laven seconded a motion to approve the Resolutions establishing Development District No. 51 and Tax Increment Financing District No. 51-1 (Quarry View). The motion carried unanimously.

Ms. Kramlinger stated that on September 14, 2026, the Mankato Economic Development Authority directed staff to prepare materials for tax abatement assistance and a business subsidy agreement for Old Town Riverfront Properties, LLC. She explained the developer plans to invest approximately $13.56 million to construct a 63,000-square-foot office and indoor organic production and processing facility for mushrooms and microgreens at 1961 Energy Drive. Construction is expected to begin in early 2027 and conclude by the end of the year, creating an estimated 17 jobs in the first year and 75 jobs in the second year. She further explained the developer is requesting a pay-as-you-go tax abatement, under which it would receive 90% of the City’s share of the increased property taxes generated by the project. The City would provide no upfront funding, and payments would be made twice annually after property taxes are paid.

Ms. Kramlinger indicated that following an updated construction schedule, the projected assistance increased to $192,000 over seven years, compared with $140,750 over five years. Payments would begin in 2029, with the seven-year abatement running through February 2036. She explained that the City’s consultant, Ehlers, determined that tax abatement is necessary for the project to proceed, recommending seven years if the developer’s proposed land value is accepted or five years if a lower land value is used. Staff recommend the seven-year option, citing the creation of high-paying jobs, expansion of the City’s tax base, and diversification of local industries and employment opportunities. The proposed agreement limits payments to tax revenue generated and paid, subject to the developer’s compliance with the agreement. She advised that because the seven-year option exceeds $150,000 in assistance, it triggers additional requirements under Minnesota’s business subsidy statute. The City Council is being asked to adopt a resolution approving the seven-year property tax abatement.

Mr. Laven moved and Ms. Hatanpa seconded a motion to approve the Resolution(s) granting property tax abatement for seven years for Old Town Riverfront Properties, LLC. The motion carried unanimously. 

Mr. Bienfang and Mr. Smith reported that the TH 169 Revitalization Project proposes roadway and infrastructure improvements from Belgrade Avenue to north of TH 14, led by the Minnesota Department of Transportation (MnDOT) in coordination with the cities of Mankato and North Mankato. Proposed city improvements include sanitary sewer, watermain, and storm sewer work beneath and adjacent to the reconstructed highway and city streets. They explained that additional improvements include the realignment of Range Street and reconstruction of portions of West River Lane and North River Lane to accommodate a proposed roundabout at North River Lane, as well as a pedestrian underpass and trail connections near the Harley-Davidson building. Following public outreach, including an open house on September 2, 2026, staff recommends that the City Council accept the feasibility report and proceed with the improvement hearing. MnDOT plans to advertise the project for bids, with bids expected to open in fall 2026, followed by development of a cost-sharing agreement with the city.

Mr. Bienfang and Mr. Smith stated the estimated total project cost is $36.562,017.37, including $7.242,289.16 for the City of Mankato’s portion and approximately $29.319,728.16 in MnDOT and City of North Mankato participation. Mankato’s costs include utility construction, pedestrian and trail improvements, roadway access changes, engineering, administration, and contingency expenses. The indicated preliminary funding plan for Mankato’s share relies primarily on federal and state grants totaling $3.650,560 (50.4%), followed by water revenue of $1.079,400 (14.9%), sewer revenue of $947,800 (13.1%), and state aid of $727,586 (10%). The remaining funding will come from special assessments, information technology capital funds, and general obligation bonds. Special assessments are estimated at $386,000, or 5.3% of the city’s total project funding.

Ms. Arntz briefly touched on the project, and how it is important to the community. This overview is just a portion of the project and does not include all the work being put in from North Mankato, etc. 

Mr. Dieken moved and Mr. Mettler seconded a motion to approve the Resolution accepting the Feasibility Report, conducting an Improvement Hearing, ordering plans and authorizing bids for Capital Improvement Project 11189; TH 169 Improvements. The motion carried unanimously.

Mr. Konz reported that on November 25, 2024, the City of Mankato City Council adopted zoning standards to determine which zoning districts cannabis-related businesses are allowed to operate. With implementation of the ordinance, minor clarifications and updates are necessary for accurate implementation.

Mr. Konz stated that the amendment clarifies the intent of the 2024 adoption. Specifically, cannabis manufacturing, processing, testing, and transportation are proposed to be included as permitted use in the M-1, Light Industrial, and the M-2, Heavy Industrial, zoning districts. 

Ms. Hatanpa moved and Mr. Laven seconded a motion to approve the Ordinance amending Chapter 10 of the Mankato City Code in the M-1, Light Industrial District, related to allowed cannabis uses; by request of the City of Mankato. The motion carried unanimously.