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Castle Community default points to potential legal action

Specific actions to address alleged noncompliance with city agreement remain uncertain, and it's not too late for the sides to negotiate.

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The Castle on Tuesday, Nov. 16, 2021, in downtown Rochester.
Joe Ahlquist / Post Bulletin file photo
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ROCHESTER — City officials are pointing to the potential for legal action related to an alleged default of an agreement with the Castle Community.

While a notice from Rochester City Attorney Michael Spindler-Krage raises potential legal action, it also opens the door for negotiations.

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“Possible negotiations may include an amendment to the Development and Property Sale Agreement that aggregates the additional amount of time the Castle Community has remained out of compliance, along an amendment to the initial (request for proposals) to identify the new vendors/programming the Castle Community will bring forward to ensure compliance,” he wrote in a letter sent to Scott Hoss, president of Castle Community LLC.

Jenna Bowman, the city’s strategic communications and engagement director, said no deadline has been set for potential negotiations to start, and the city cannot say what would be sought if legal action is taken.

“We are still evaluating options and anticipate a closed session of the (Rochester) City Council in June to review next steps,” she said.

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When the Castle Community purchased the former Armory building on North Broadway Avenue from the city in 2017, an agreement called for it to provide space that advances arts and cultural offerings in the city through November 2023.

The 2017 agreement also provided financial support for renovations through tax increment financing.

The operations were in compliance until the COVID-19 pandemic forced a variety of shutdowns, which left the building largely empty for a portion of 2020.

The building’s owners eventually entered into a rental agreement with Echo Church in September 2020, providing an income stream while other uses of the space were not possible.

However, on November 11, 2021, the city issued a “notice of default” giving the Castle Community 60 days to return operations to an arts and culture focus. The required arts and culture use was also extended to February 2024, to account for a portion of the lapse in compliance with the original agreement.

Echo Church moved ou t of the building last month and now holds Sunday services at Mayo High School, but operational plans at the Castle remain unclear.

At one point, Castle Community representatives indicated Threshold Arts would return to assist with programming the building, but Threshold Arts Founding Director Naura Anderson recently signed a Chateau Theater operations agreement with the city, indicating the arts group was ending involvement with the Castle Community.

Castle Community President Scott Hoss did not respond to a call seeking comment Friday morning.

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The full letter can be found below:

Randy Petersen joined the Post Bulletin in 2014 and became the local government reporter in 2017. An Elkton native, he's worked for a variety of Midwest papers as reporter, photographer and editor since graduating from Winona State University in 1996. Readers can reach Randy at 507-285-7709 or rpetersen@postbulletin.com.
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