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Will Kmart parking lease revisions address city's concerns?

A revised lease for operating a park-and-ride facility in the former Kmart parking lot seeks to address concerns cited when the agreement was reviewed in January.

The former Kmart site has been repaved and striped to provide parking for Mayo Clinic employees in Rochester. (Andrew Link / alink@postbulletin.com)

A revised lease for operating a park-and-ride facility in the former Kmart parking lot seeks to address concerns cited when the agreement was reviewed in January.

It also caps the use for contracted parking at 10 years, citing the possibility of a shift in direction after the first five years, depending on the results of a proposed 16-month planning effort slated to start next month.

The Rochester City Council will review the proposed changes toward the end of its 7 p.m. meeting Wednesday in council chambers of the city-county Government Center, 151 Fourth St. SE. 

Approval of a three-way lease agreement is required to grant a permit for the site to be used as a parking facility since recent zoning changes only allow for publicly designated surface parking.

The proposed agreement involves the city, property owner Camegaran LLC and Mayo Clinic, which is proposing to lease 95 percent of up to 1,357 parking spaces to Mayo Clinic for use by Saint Marys Hospital employees.


The remaining 5 percent is dedicated to the city under the lease revision. If the city generates revenue from the spaces, it will be required to pay Mayo Clinic for maintenance, since the organization will be the lot’s tenant and operator.

The adjusted lease sets the initial term at five years, but it allows Camegaran to extend it twice, for 2.5 years each , depending on whether new development opportunities emerge.

At the same time, the new lease also includes a variety of dated goals with potential financial penalties for Camegaran and Mayo Clinic. Among them are construction and landscaping requirements for this year and demolition of the former Kmart building by the end of 2022.

Council approval of demolition will still be required, and city staff has suggested a new traffic study will likely be needed before the added parking can be permitted.

The lease also requires Camegaran to have preliminary construction drawings and be ready to hire a contractor by the end of the 10-year lease.

Failure to meet many of the milestones would cost Camegaran or Mayo Clinic $4,000 a month until the objective is met.

Camegaran is also agreeing to add a stormwater feature and air-quality monitor to the site, and Mayo Clinic is agreeing to limit shuttle hours to between 5 a.m. and 9 p.m. on weekdays. Saint Marys employees will not use the site on weekends, and Mayo Clinic contractors will not have access to the weekday Saint Marys shuttle.

In addition to reviewing the revised lease, the Rochester City Council is slated to consider the permit for use as a surface parking lot.


This week, Allison Sosa, planning supervisor for the city’s Community Development Department, said the information on the proposed project has not changed since the council held a Jan. 6 public hearing on the issue.

Planning staff is recommending approval be limited to the 729 parking spaces identified in the first phase of Camegaran’s proposal, which would require a future permit application and review for the additional parking.

Sosa said the council has until March 12 to take action on the initial permit request.

Meetings during the week of Feb. 17 include:


• Fire Civil Service Commission, 3:15 p.m. Tuesday in room 104 of City Hall, 201 Fourth St. SE.

• Public Utility Board, 4 p.m. Tuesday in the Rochester Public Utilities board room, 4000 East River Road NE.


• City Council study session, 3:30 p.m. Wednesday in the council chambers of the city-county Government Center, 151 Fourth St. SE.

• Library Board, 4:30 p.m. Wednesday in meeting room C of the Rochester Public Library, 101 Second St. SE.

• City Council, 7 p.m. Wednesday in council chambers of the Government Center.

Olmsted County

• Legislative committee, 10 a.m. Tuesday in the county administration conference room in the Government Center.

• Health, Housing and Human Services committee, 11 a.m. Tuesday in conference room 4 of the Government Center.

• Housing and Redevelopment Authority, 1 p.m. Tuesday in conference room 1 of the Government Center.

• Physical Development committee, 2 p.m. Tuesday in conference room 2 of the Government Center.

• Administrative committee, 2 p.m. Tuesday in conference room 4 of the Government Center.

• County board, 3 p.m. Tuesday in board chambers of the Government Center.

• Parks Commission, 5 p.m. Tuesday in conference room A at 122 Campus Drive SE.

• Environmental Commission, 7:15 a.m. Wednesday in the Public Works conference room at 2122 Campus Drive SE.

• Chester Heights Sewer District Advisory Board, 4 p.m. Thursday at Schott Distributing, 6735 U.S. Highway 14 E.

• Human Rights Commission, 7 p.m. Thursday in conference room 4 of the Government Center.

Rochester Public Schools

• School Board, 5:30 p.m. Tuesday in the boardroom of the Edison Building, 615 Seventh St. SW.

Related Topics: MAYO CLINIC
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