Historic Properties Reuse Study of the Anderson ... - City of Wabasha

A 

Historic Properties Reuse Study 

of the 

Anderson House, 

Wabasha, Minnesota 

John Lauber and Company LLC 

Claybaugh Preservation Architecture Inc 

2010

TABLE OF CONTENTS 

Volume 1 

Project Background………………………………………………………………… 1 

The Project Team…………………………………………………………............... 2 

Approach………………………………………………………………………........ 5 

Issues Analysis 

Condition/Design…………………………………………………………... 6 

Site…………………………………………………………………............. 7 

Preservation………………………………………………………………... 8 

Community………………………………………………………………… 9 

Political……………………………………………………………………. 10 

Downtown………………………………………………………..……….. 11 

Tourism…………………………………………………............................ 12 

Hospitality…………………………………………………………………. 13 

Marketing………………………………………………………………….. 14 

Financial……………………………………………………………………. 15 

Alternatives 

Disposition………………………………………………………………… 17 

Use………………………………………………………………………… 18 

Ownership/Operation……………………………………………………… 19 

Reuse Scenarios…………………………………………………………………… 21 

Recommendations………………………………………………………………… 22 

Addendum: First Floor Rehab Only-Restaurant 

Volume 2 

Appendix A: Historic Views 

Appendix B: Existing Conditions 

Appendix C: Code Analysis 

Appendix D: Design Concepts and Cost Estimates 

Appendix E: Financial Analysis 

Option 1: Public Owner/Phased Rehab/Restaurant-Hotel 

Option 2: Private Owner/Phased Rehab/Restaurant-Hotel 

Option 3: Private Owner/Phased Rehab/Restaurant-Hotel-Condo 

Option 4: Private Owner/Phased Rehab/Restaurant-Condo 

Appendix F: Interviewees 

Anderson House Reuse Study

Project Background 

Wabasha is a historic community of 2,600 people, located on the banks 

of the Mississippi River in southeastern Minnesota. Wabasha is proud 

of its heritage as the first city in Minnesota to be settled by European- 

Americans, and is unusually rich in both historic and natural resources. 

Accessible by river and rail, as well as from the Great River Road, the 

community has been a popular destination for human travelers for many years. Its 

location on a major migratory route for raptors made it an ideal location for the recently 

established National Eagle Center. 

Until recently the community and its visitors were served by the Anderson House—a 

legendary hotel and restaurant located at the south end of the Main Street Historic 

District, just a block from the River. The building and the business were established as 

the Hurd House in 1856, and until the hotel was closed last year, the property had served 

travelers and tourists without interruption for more than 150 years, earning distinction as 

the oldest continuously operating hotel in Minnesota. The building was individually 

listed on the National Register of Historic Places in 1978. 

Closure of the property was considered a significant loss to the community, and has been 

mourned by business leaders, local citizens, and officials. There has been strong interest 

locally in seeing the property resurrected—as a hotel/restaurant, as condominiums, as 

studio/gallery space for artists, or for some other purpose. 

In an effort to return the Anderson House to productive use, the Wabasha Port Authority 

has been actively working with the local mortgage holder to preserve and market the 

property. Earlier this year, the city of Wabasha was awarded grants from the Minnesota 

State Historic Preservation Office and the Minnesota Legacy Fund to support completion 

of a Historic Properties Reuse Study for the Anderson House. The city issued a Request 

for Proposals for the project in April, 2010. 

In response to the RFP, reuse study veterans and longtime collaborators John Lauber and 

Bob Claybaugh formed a team to pursue the project. To prepare a proposal that would 

adequately and appropriately address the needs of the community, Lauber and Claybaugh 

began to gather background material on the community and the property. They visited 

Wabasha on 11 May to visit with city staff, take a brief tour of the community, and 

complete a walkthrough of the building. 

The team was awarded the contract for the project on 16 June 2010, and completed the 

work over the summer and fall of 2010. We are pleased to submit the following report 

on our findings.

The Project Team 

The team assembled for the Anderson House Reuse Study offers unparalleled experience 

in the assessment, rehabilitation, and adaptive reuse of historic buildings. Team members 

have also demonstrated their collective commitment to community-driven, process 

oriented planning through past participation in more than two dozen historic properties 

reuse studies, Minnesota Design Team visits, and a host of workshops and design 

charrettes intended to capture the imagination and vision of community members. 

John Lauber 

Historic Preservation Planner 

Master of Arts, Historic Preservation Planning, 

Cornell University 

John Lauber served as the project manager and co-principal 

investigator for the Anderson House Reuse Study. Since 

beginning his historic preservation career in 1991, John has 

amassed unusually extensive and varied experience in the field, 

completing cultural resource surveys, designation studies, 

historic context narratives, documentation projects, historic properties reuse studies, and 

Federal Rehabilitation Tax Credit applications for historic properties located throughout 

Minnesota and in ten other states. He has served as an intern for the Minneapolis and St. 

Paul Heritage Preservation Commissions, and has worked for a private cultural resource 

management firm, a large engineering company, and the Minnesota State Historic 

Preservation Office. Since 1993, he has served as a guest lecturer at the University of 

Minnesota (Twin Cities) College of Design. He established an independent preservation 

consulting practice in 2003. 

A strong proponent of community-based planning and problem solving, John has 

participated in more than twenty historic properties reuse studies, most of them in 

collaboration with Robert Claybaugh. He has been an active member of the Minnesota 

Design Team, participating in four design charrettes and three screening visits. In 2003, 

he was selected to participate on an international town planning team that worked with 

the village of Walton-on-the-Naze, Essex, England. 

John exceeds the Secretary of the Interior’s Professional Qualification Standards for both 

History and Architectural History. 

Anderson House Reuse Study 2

Robert Claybaugh, AIA 

Historic Architect 

Bachelor of Architecture, 

Kansas State University 

Robert Claybaugh served as co-principal investigator for the 

Anderson House Reuse Study. 

Claybaugh Preservation Architecture Inc (CPAi), founded in 1989, provides outstanding 

architectural and technical services for owners and managers of historic buildings and 

sites. CPAi also provides consulting services to design professionals, and training for 

historic preservation professionals and laypeople. Principal Robert J. Claybaugh AIA has 

extensive experience with historic preservation projects and a commitment to preserving 

our built environment. 

Bob Claybaugh has worked to preserve schools, colleges, churches, courthouses, banks, 

and other public buildings in the Midwest and throughout the United States. His 

involvement has ranged from historic research at the inception of the project to providing 

contract documents and construction observation when the required work is underway. 

Working with the client, CPAi will develop an appropriate scope of work for preservation 

projects of any size and budget. 

Claybaugh Preservation Architecture has provided restoration design services at 

Minnesota Historic Society properties at Lindbergh Boyhood Home, Historic Fort 

Snelling, Sibley House Historic Site, Split Rock Lighthouse, Folsom House, Historic 

Forestville, Lower Sioux Agency and North West Fur Post. Other historic site 

experience includes the Washington County Historic Courthouse, the Mabel Tainter 

Memorial Theater and the Robert A. Long Mansion. 

Bob exceeds the Secretary of the Interior’s Professional Qualification Standards as a 

Historical Architect and is a licensed architect in the states of Minnesota, Wisconsin, and 

Missouri. 


Tom Nordyke 

Development Consultant 

Tom Nordyke has worked in non-profit real estate and public policy for more than twenty 

years. He started his career as the Manager of Facilities for the University of 

Minnesota’s Carlson School of Management and served as Vice President of Properties 

for Artspace Projects, Inc. from 1987 to 2003. Tom earned his degree in history from the 

University of Minnesota and has served on the Minneapolis Park and Recreation Board 

and the Minneapolis Planning Commission. Last year he was named Chief Operating 

Officer for Aeon, a non-profit housing developer headquartered in Minneapolis. 

Tom has extensive experience with the redevelopment of historic buildings, including the 

Central High School in Red Wing and the Hotel Kaddatz in Fergus Falls. He recently 

served as Development Consultant for a Reuse Study on the Kasson Public School. 

Terry Pellegrino 

Restaurant/Kitchen Consultant 

Terry Pellegrino is a senior consultant with Robert Rippe & Associates, a respected 

foodservice design and operations firm headquartered in Minnetonka. Since beginning 

her career in 1985, Terry has worked closely with clients in hospitals, colleges and the 

hospitality industry to plan and equip functional and efficient food service facilities. She 

holds a Bachelor of Arts degree in Food and Nutrition from Concordia College in Fargo, 

and completed an internship at Massachusetts General Hospital in Boston. 

ACME Cost Management & Estimating 

Construction Cost Estimating 

Don Hendricks of ACME has worked with the team to provide construction cost 

estimating services a number of historic building projects, including work at several 

historic sites operated by the Minnesota Historical Society, as well as a recent reuse study 

for the Washburn, Wisconsin Civic Center, and a historic structures report for the 

Newport Barn in Anoka County, Minnesota. 


Approach 

The project team has sought to provide sponsors with a thorough and well-written final 

report. To accomplish that task the team worked collaboratively with city staff to create a 

study process that was systematic and comprehensive, that will engage the imagination of 

developers and local citizens, and that will provide the facts the community needs to 

make an informed decision about the future of the Anderson House. Specific steps in the 

study process included: 

Pre-Contract Site Visit 

On 11 May 2010, John Lauber and Bob Claybaugh traveled to Wabasha to discuss the 

project with city staff and to tour the building. Information gathered during this visit was 

used to develop the project proposal. 

Background Research 

Once the contract was awarded, team members worked closely with city staff to collect 

as much information as possible about the history, operations, and evolution of the 

Anderson House. The team conducted additional research at the Wabasha Public 

Library, the Minnesota Historical Society, and the Minnesota State Historic Preservation 

Office. Materials examined included planning documents, building construction and 

maintenance records, historic preservation documentation, published sources, 

newspapers, historic maps and photos. 

Site Visit 1: Building Evaluation 

Team leaders returned to Wabasha on 1 July 2010 to complete a thorough investigation 

of existing conditions in the Anderson House. The team examined all interior and 

exterior spaces, including the basements, mechanical rooms, attics, and the roof. They 

documented conditions with field measurements, photographs, and extensive notes. The 

information gathered on this visit was used to prepare baseline drawings of the building. 

Site Visit 2: Interviews 

On 23-24 August, team members John Lauber and Bob Claybaugh traveled to Wabasha 

to conduct two days of intensive interviews with code officials, city staff and officers, 

business and civic leaders and other stakeholders with an interest in the future of the 

Anderson House. Development specialist Tom Nordyke participated in interviews with 

real estate and financial professionals. At the end of this visit, the team conducted a 

follow-up inspection of the building to take additional measurements and photographs. 

Issues Analysis and Report Preparation 

In September, October and November, the team used the information gathered through 

fieldwork and interviews to identify and analyze issues and opportunities that may affect 

the future of the Anderson House. This information was used to outline a reuse strategy, 

develop schematic designs, prepare cost estimates, identify potential sources of funding, 

and complete financial projections for several reuse scenarios. 

All work on the Anderson House Reuse Study was completed in accord with A Primer 

for Historic Properties Reuse Teams in Minnesota, published by the Minnesota SHPO. 


ISSUES ANALYSIS 

Condition/Design Issues 

The Anderson House is generally in very good physical condition. A great deal of 

substantial rehabilitation work has been completed during the past twenty years, 

including a full window replacement, extensive repair of the exterior brick veneer, 

rebuilding the cupola atop the building’s corner turret, installation of a sprinkler system 

and replacement of an aging boiler. A summer storm during the reuse study damaged the 

upper portion of the chimney and caused minor damage to the roof. This damage has 

been repaired. The building has been heated and remains connected to water and electric 

lines since the hotel/restaurant operation was closed in 2009. 

As might be expected of a building its age, the Anderson House has experienced 

numerous alterations over its long lifetime. In its original incarnation as the Hurd House, 

the building was essentially a two-story timber framed residence with a hipped roof 

surmounted by a small square cupola. The building was significantly expanded into a 

true hotel building in the mid-1880s when a three-story brick-veneered addition was 

appended to the original building. A second addition was built a few years later, bringing 

the building to essentially its present form. Other changes have included the construction 

and subsequent alteration of a two-story porch on the south end, numerous small 

additions and subtractions on the back of the building, a change in the roofline of the 

original building, reconfiguration of interior spaces, many maintenance and restoration 

activities, and construction and demolition of a succession of outbuildings. 

Interior finishes are worn and shabby. Bathrooms are cramped and improvised. 

The basement bar is damp, musty, and accessible from inside the building only via a 

circular iron stairway. Both the health and building inspector have indicated that they 

would object to operating a bar in this area in the future. 

The main kitchen and the bakery are separated by the lobby and the front desk. The main 

kitchen has an unusually low ceiling. Floor, ceiling, wall, and shelf surfaces do not 

conform to current health codes. Much of the equipment in the main kitchen is outdated 

and need of replacement. The layout is inefficient. 

The main dining rooms are located on the north end of the building, but there is also a 

dining area on the south end that could accommodate meetings or large groups of diners. 

This dining room opens into an enclosed porch. 

Five original doorways provide access to the main level of the building from Main Street. 

These doors would make it possible to subdivide the interior into individual retail or 

office spaces without compromising the historic character of the exterior. 

A complete photographic tour of the building, a detailed description of existing 

conditions, and a full analysis of building, life safety, and health code issues and 

accessibility concerns are appended to the report narrative. 


Site Issues 

The Anderson House occupies a large corner site in a pleasant, well-established 

residential neighborhood a few blocks north of the central business district. The property 

is situated just a block from the Mississippi River, near the city park and marina. 

The hotel is located near the front of a large triple lot, much of which is essentially a 

large back yard. This space is currently underutilized. With creative planning, it could 

become a significant asset to the business, providing space for outdoor dining and bar 

activities, and providing a quiet place for guests to relax. There is space in this area to 

create additional parking spots or a drive-through entrance to the building. Former 

owners commissioned plans for this back yard, but the plans were never implemented. 

The hotel originally had a canopy extending out into Main Street. Although a version of 

this canopy is still in place, it ends at the curb line. A bump-out into Main Street could 

create space for several tables which would allow patrons to enjoy a cup of coffee on 

Main Street. 

There is an alley at the back of the property. There is currently a limited parking off the 

alley, but most visitors to the building must park on the street. 

The carriage house at the back of the hotel property has been fully renovated to serve as a 

residence for the owners and operators of the Anderson House. It could continue to 

function in this capacity with no modification, or it could be converted to another use, 

such as a condominium unit or a freestanding bar. 

Despite its proximity to the Mississippi River the access along Bridge Street, is visually 

uninteresting and relatively unimproved. The river connection could be made much more 

explicit and inviting with the help of well-designed and relatively inexpensive streetscape 

improvements. 

The Walnut Avenue bridge creates a significant physical and visual barrier between the 

central business district and the Anderson House. This issue was identified in a visioning 

document commissioned by the city in 2005, but it has not bee resolved. 

A manufactured home erected on the adjacent lot as housing for former owners, is 

inconsistent with the historic character of the surrounding neighborhood. 


Preservation Issues 

Wabasha has a strong and longstanding commitment to historic preservation and has 

made preservation a key to maintaining its vitality. Residents expressed a strong interest 

in preserving not only the historic Anderson House building, but also its historic function. 

This indicates that the restaurant/hotel operation has served an important function within 

the community. 

Wabasha has a rich collection of officially designated historic properties. 

The Anderson House was listed on the National Register of Historic Places in 1978. The 

community is home to eight other individually listed National Register properties as well 

as a commercial historic district encompassing most of the central business district. 

The Anderson House’s National Register status makes it eligible for a number of grants, 

tax credits and other incentive programs, depending on the nature of its reuse. 

City officials share in the community’s commitment to historic preservation. 

Preservation and tourism are repeatedly called out in the city’s comprehensive plan as 

important tools for maintaining Wabasha’s health and vitality. 

The city has an active and well-established Heritage Preservation Commission. The 

Commission has design guidelines in place for the downtown commercial historic district 

and has achieved Certified Local Government Status, which makes it eligible for a 

number of state and federal grant and incentive programs. 

The Wabasha Port Authority commissioned the Anderson House Reuse Study, and 

obtained a Certified Local Government grant from the Minnesota State Historic 

Preservation Office and another grant from the State’s Legacy Amendment Fund to pay 

for the reuse study. 

The community has made historic preservation an important component of its efforts to 

maintain the vitality of its central business district. Wabasha was one of the first 

communities in Minnesota to apply the precepts of the National Trust’s Main Street 

Program to revitalize its central business district, and leaders have expressed their interest 

in becoming affiliated with Minnesota’s recently revived Main Street Program. 


Community Issues 

Wabasha is the seat of Wabasha County. Major employers include St. Elizabeth 

Hospital, Uni-Patch, a manufacturer of medical and control equipment, and an assortment 

of small industries. The community drew national attention in the 1980s as the setting for 

two Grumpy Old Men movies featuring Jack Lemmon, Walter Mathau, and Ann Margret. 

The community has experienced a slow increase in population over the past forty years, 

and has a higher than average percentage of older residents. The number of residents 

over age 65 is projected to increase over the next decade. 

Many older residents who grew up in the area have remained close to home. There is 

also a growing contingent of expatriate Wabashans who grew up in town, moved away to 

pursue careers elsewhere, and returned to the community to retire, citing its beautiful 

natural setting, relaxed pace, well-preserved downtown, and relative proximity to the 

Twin Cities and Rochester. These returnees have brought new vitality to the community, 

taking on the challenge of rehabilitating a number of downtown buildings, opening small 

businesses, and participating in the social and political life of the community. The 

success of several new condominiums and lofts in Wabasha appears to be attributable in 

part to returnees. 

During the interview phase of the reuse study, it quickly became evident that there is 

nearly unanimous agreement among local residents that the Anderson House is 

significant, not only as a historic site, but also as a community icon, and that it must be 

returned to useful life. 


Political Issues 

Elected officials in Wabasha, like those throughout Minnesota and the rest of the country 

are facing significant challenges posed by the economic downturn of the past few years, 

and by popular sentiment that presently favors fiscal austerity and small government. 

These factors could make it politically difficult for officials to materially support a 

rehabilitation of the Anderson House. 

Local officials appreciate the importance of the Anderson House to the community as a 

whole and are aware of the overwhelming public support for preservation. 

The city has been willing to provide financial assistance to the Anderson House in the 

past, offering TIF financing for improvements, and subsequently forgiving the debt in an 

effort to maintain the viability of the business. 

The Port Authority has been willing to consider ways to revive the operation, including 

the possibility of acquiring the property for redevelopment. 

City purchase of the property may be controversial. It could be perceived as putting the 

city into competition with local private business owners, and as unfairly relieving the 

current mortgage owner of the fiscal burden imposed when the property went into 

receivership. 

Conversely, a failure of city official to take actions to preserve an important community 

asset could be politically unpopular. 


Downtown Issues 

Like many small communities, Wabasha’s central business district has gone through 

significant changes over time. Commercial buildings that once provided basic goods and 

services now contain offices, bookstores, gift shops and restaurants—many of which 

cater to out-of town visitors. The community has treated it historic downtown buildings 

with care over the past several decades, creating a tidy, human scaled district that appeals 

to citizens and visitors alike. The city has thus far avoided the invasion of “big box” 

retailers, but many storefronts are vacant or marginally utilized, suggesting that residents 

do much of their shopping elsewhere. 

The central business district is home to the public library and the post office, and features 

an unusually good assortment of places to eat, including an Irish Pub, a pizza place, a 

typical small town café, and restaurants offering Chinese and Mexican Food. 

In an effort to maintain and increase the vitality of its downtown business district, 

community leaders have expressed their intention to affiliate with the recently reestablished 

Minnesota Main Street Program. Conceived and developed by the National 

Trust for Historic Preservation, the Main Street approach has a long and successful record 

of helping to keep historic commercial districts viable through a combination of good 

organization, careful design, intensive and collaborative promotion and economic 

restructuring. 

A number of historic downtown buildings have been redeveloped in recent years by a 

local resident. This enterprise has enjoyed mixed success, spawning several popular 

restaurants, and housing other new businesses. Four of approximately a dozen 

redeveloped properties are currently vacant. 

The National Eagle Center, a grassroots organization formed in 1989 by local residents 

who were fascinated by the bald eagles that populate the Mississippi River corridor, 

opened a spectacular new facility on the downtown riverfront in 2007. Last year the 

Eagle Center drew an estimated 100,000 visitors to Wabasha’s downtown. 


Tourism Issues 

Located on the banks of the Mississippi River at the foot of Lake Pepin, and surrounded 

by high wooded bluffs populated by soaring bald eagles, Wabasha enjoys a breathtaking 

natural setting. The community has always been a stopping point for travelers. The first 

visitors arrived by steamboat, later arrivals came by train, and most recently tourists 

come by automobile, turning their cars off the scenic Great River Road to enjoy the 

attractions of this historic community. 

The city website offers a great deal of information for tourists, and the city has provided 

some amenities intended to serve visitors, including a marina and a city park with 

camping spots at the north end of Main Street. The community is also served by a scenic 

golf course, a downhill ski area, and a privately operated marina. 

Wabasha is located between Red Wing and Winona, within easy driving distance of the 

Twin Cities and Rochester. For many years, the surrounding area has supported a 

number of tourist-oriented hospitality businesses, including the historic Hubbell House 

Restaurant in Mantorville, the St. James Hotel in Red Wing, and the Harbor View 

Restaurant across the river in Pepin Wisconsin. 

The Great River Road and a network of roads through the river bluffs provide ideal 

routes for bicycling enthusiasts. The local bicycle club has more than 150 members. 

An important new draw for tourists in recent years has been the Eagle Center, which 

brings in an estimated 100,000 visitors per year. 


Hospitality Issues 

The Hurd/Anderson House was operated exclusively as a hotel and restaurant for more 

than 150 years. Despite this continuity, however, the nature of the Anderson House’s 

business has changed over the years. In its earliest iteration the hotel provided basic food 

and lodging for travelers on the river. In later years, the hotel served commercial 

travelers who arrived in Wabasha by rail. A spacious sample room provided a venue for 

salespeople to display their wares and do business for a few days. The hotel’s fortunes 

waned in the post World War II years, as travelers of all types took to the highways, 

seeking accommodations in “motor hotels” designed specifically for cars. The Anderson 

House hit a low point in the early 1960s, when it became essentially a refuge for the 

down-and-out and the transient. The business suffered from poor management in the 

early 1970s, then enjoyed a renaissance later in the decade when the family of former 

owners acquired the property and reinvented it as a boutique hotel/bed and breakfast, 

famous for its home cooking, specialty baking, and cats. 

Despite very modest fees for overnight stays, the Anderson House hotel operated with an 

average occupancy rate of only ten to twenty percent. One interviewee suggested that the 

hotel operation might work best as a seasonal enterprise. According to one interviewee, 

the restaurant accounted for ninety percent of the business, with a huge majority of diners 

coming from outside Wabasha. 

In recent years, operators of the hotel worked hard to make improvements that would 

provide amenities expected by recreational travelers. Some of these improvements 

appear to have been completed piecemeal and on modest budgets. Efforts to provide 

bathrooms in every guest room, for example seem improvised, with facilities placed on 

platforms in cramped, awkward spaces. Carpets are worn and rumpled, upstairs hallways 

have suspended ceilings and many other interior features are shabby, contributing to a 

sense in some areas that the hotel is not as much historic as merely old. 

Food preparation takes place in a kitchen and bakery that are located in entirely separate 

parts of the building. The kitchen is crowded and inefficiently arranged, and with 

structures, finishes, systems, and fixtures that do not conform to current health and 

building codes. 

People with disabilities currently have access only to the first floor of the Anderson 

House. Without an elevator, disabled patrons have no way to reach the hotel rooms or 

bar. 

The hotel barroom is located in the basement of the 1887 building. Despite efforts to 

make the room appealing through the use of holiday lights, screens and paint, the room is 

dungeon like and difficult to access. Although spiral stairway, stairway leading to the 

back yard, the original stairs and areaway leading from the street façade is still in place 

but appears to be seldom used. 

Wabasha has a relatively new hotel—a 64-room Americinn on Highway 61. This facility 

primarily serves business travelers, and is equipped with an indoor pool, an event room 


and a catering kitchen, but no restaurant. The owner cited a study commissioned by 

Hospitality Marketers International finding that the relationship between business hotels 

and destination hotels such as the Anderson House is symbiotic and not competitive. 

Efforts to develop a new $4.5 million hotel on the downtown waterfront have failed to 

reach fruition, due in part to the difficulty of obtaining financing in the current economic 

climate. The developer cited a study commissioned by Hospitality Marketers 

International suggesting that the relationship between the proposed new development and 

a destination hotel such as the Anderson House was likely to be symbiotic and not 

competitive. 

One recent and innovative approach to providing lodging for visitors to Wabasha has 

been very successful. Operating under the title “Eagles on the River,” this enterprise 

consists of a consortium of individual property owners who rent their lofts, 

condominiums, or apartments (some in historic buildings downtown) to visitors through a 

centralized reservation brokerage. Lodging in these properties commands rates from 

about $150 to $300 per night. 


Marketing Issues 

The Anderson House is a Minnesota icon, widely known and highly regarded for its long 

history, excellent food, and rooms equipped with beds, televisions, wireless connections, 

and cats. The cats, which were introduced in the 1970s to provide companionship for 

lonely patrons, were also a stroke of marketing genius, garnering national attention in 

publications such as the New York Times and the Wall Street Journal, and inspiring a 

children’s book about a curmudgeonly cat named Blumpoe the Grumpoe. 

Current health codes would prohibit reinstating the cats as a feature of the Anderson 

House requiring new owners to find a new way to establish a unique identity. 

The Anderson House actively cultivated relationships with operators of tour buses, which 

would discharge dozens of visitors at the hotel to partake of home cooked lunches and 

dinners. Several interviewees felt that those efforts had diminished somewhat in recent 

years despite a significant influx of groups coming to visit the Eagle Center. 

The National Eagle Center attracts an estimated 100,000 visitors to Wabasha each year. 

Although the community has a number of interesting small restaurants, closure of the 

Anderson House made it difficult for local restaurateurs meet the demand for meals for 

from all of the visitors. The Anderson house was the only restaurant in the central 

business district with enough capacity to serve large groups. 

There appears to be a strong opportunity for a reopened Anderson House to participate in 

cooperative marketing activities with the National Eagle Center and other local 

businesses. 

A reopened Anderson House could seek marketing assistance from the University of 

Minnesota Extension Service’s Tourism Center and through membership in 

the National Trust’s Historic Hotels of America program (HHA). According to the 

organization’s website, the HHA program seeks to identify “quality hotels that have 

faithfully maintained their historic integrity, architecture and ambience. These hotels are 

promoted nationally and internationally to those who prefer historic settings for their 

leisure and business travel.” 


Financial Issues 

Although the Anderson House remained in business continuously for more than 150 

years, its history has not been one of uninterrupted success. The facility’s fortunes waned 

for a period during the 1960s, when the hotel became essentially a single-roomoccupancy 

operation. In 1980, owners sought bankruptcy protection after an erroneous 

report that the restaurant had given patrons food poisoning caused a dramatic decrease in 

business. As one reuse study interviewee put it, profit margins in the hospitality industry 

are “skinny” under the best of circumstances. 

The most recent owner/operators of the Anderson House purchased the property at the 

height of the real estate boom, and were quickly beset by the economic downturn of the 

past several years. The mortgage on the property was foreclosed in 2009, and the 

property was returned to the First State Bank of Wabasha, which held the mortgage. 

Until the building is sold, the Anderson House will be a significant liability to the bank. 

The amount remaining on the mortgage is significantly higher than the current asking 

price for sale of the building, which means that the mortgage holder will sustain a loss 

even if the building is sold. 

For at least the past several decades, at least, the restaurant seems to have been the 

primary cash center for the operation. Despite very reasonable rates for overnight 

accommodations, the hotel operated with an average occupancy rate of only ten to twenty 

percent. Comments from interviewees and the general public suggest that the restaurant is 

sorely missed within the community, and that a restaurant operation may have the most 

immediate potential for generating revenue. 

The city of Wabasha provided tax increment financing (TIF) to finance improvements in 

the Anderson House a number of years ago. In an effort to keep the hotel in business, the 

debt was forgiven. 

The Hotel has also received grants from the Southeast Minnesota Multi-County Housing 

and Redevelopment Authority and other public funding sources for improvements in the 

past. 

Although the building is generally in very good condition, alterations required to upgrade 

the kitchen, make accessibility improvements, refresh the décor, and provide amenities 

for guests would be costly. 


ALTERNATIVES 

Disposition Alternatives 

The Anderson House has stood vacant for well over a year. It has remained in relatively 

good condition due largely to the efforts of the current property owner, which has heated 

the building, maintained electrical and water service, and arranged for lawn care and 

snow removal. 

Demolition 

Under this scenario the Anderson House building would be demolished and the site 

redeveloped for another purpose. Demolition would be expensive, and would result in a 

considerable loss of value for the property owner. It would also require demolition of an 

iconic historic property. These factors, combined with strong public support for 

preservation and inquiries from a number of potential developers make demolition 

unlikely. 

Do Nothing 

Under this scenario, the building’s heat, power and water supplies would be 

disconnected, and the building would be allowed to remain in its current state, with no 

active intervention of any sort. While this would yield a modest short term savings on 

the costs of utilities and maintenance, the building would be subject to slow deterioration 

due to continued infiltration of water, lack of ventilation and deferral of routine 

maintenance. This would reduce the value of the building in the long run. 

Mothball 

Under this scenario, the property owner would maintain heat, power and water 

connections, but would take additional, low cost steps to stop water infiltration and to 

improve ventilation. This would entail such simple measures as extending downspouts, 

sealing hatches over the coal room, and installing portable fans. This approach would 

prevent the building from deteriorating and would help to maintain its value. 

Phased Rehabilitation 

Under this scenario, the building would be rehabilitated in stages in order to return it to 

useful, profitable service while avoiding the cost of a full rehabilitation. Work would 

initially be focused on the main level of the building, which has the best potential for 

restaurant or commercial redevelopment. This approach would allow time for the 

property owner to consider eventual uses for upper levels, to prospect for partners, to 

investigate alternative ownership models and to move forward as opportunities arose. 

High cost work such as the installation of an elevator would not have to be competed 

until the upper levels were developed. 

Full rehabilitation 

Under this scenario, the entire Anderson House building would be rehabilitated as a 

single project. Because this approach would require a significant investment, the 

property owner would have to have a clear vision of how the building would be used, a 

well-researched business plan, the financial wherewithal to complete the project and 

confidence that the new use would generate sufficient revenue to support the investment. 


Use Alternatives 

Although many of the people interviewed during the reuse study process expressed the 

hope that the Anderson House could continue to function in its original capacity, there 

was nearly unanimous agreement that a restaurant should be a component of any 

rehabilitation/reuse effort. Conversations with former owners, a restaurateur, and a 

historic hotel developer made it clear that a restaurant in the Anderson House would have 

to be a “destination restaurant,” offering a unique menu, exceptional food and 

outstanding service. Ideas that emerged during the interviews included: 

Restaurant/Hotel 

Restaurant/Hotel/Condos 

Restaurant/Condos 

Restaurant/Apartments 

All of above may have commercial uses on first level. 

Museum 

Veterans Housing 

Assisted Living Facility 

Apartments 

Gallery/Artists’ quarters 

Lodging for participants in Native American Eagle Handling Training (in conjunction 

with Eagle Center) 

Training facility owned and operated by Stout State University in Wisconsin to provide 

practical experience for students in its hotel/restaurant program 


Ownership/Operation Alternatives 

For all of its history the Anderson House has functioned as a small family owned 

business, with both the restaurant and hotel operated by a single owner. Alternative 

ownership models could help to reduce or diversify the risk of rebuilding the business, 

and open doors to various types of incentive programs. 

Private Redevelopment by a Single Owner 

The Anderson House could be sold to another single owner/operator. Several parties 

have expressed an interest in acquiring the property, including some with a demonstrated 

record of success with the operation of similar businesses. 

Because the Anderson House is listed on the National Register of Historic Places, a 

private developer would be eligible for a Federal Rehabilitation Tax Credit and the newly 

established Minnesota Historic Structure Rehabilitation Tax Credit. Both programs 

provide a twenty percent tax credit on the costs of a certified rehabilitation. 

A private developer could also be eligible for Tax Increment Financing (TIF), the New 

Market Tax Credit, the New Market Tax Credit, and for grants offered by the federal 

Economic Development Administration, or local property tax abatement. These 

incentives could make redevelopment of the property more attainable. 

The city has provided TIF funding to help with improvements on the Anderson House in 

the past, and the TIF obligation were forgiven in order to provide an additional stimulus 

for the business. This action was somewhat controversial and has resulted in litigation. 

Redevelopment by Multiple Owners (Condominiums) 

The property could be redeveloped as a condominium, with individual owners helping to 

finance various components of the rehabilitation. For example, one owner could 

rehabilitate and operate the restaurant on the first floor, while other owners might 

rehabilitate the upper levels as individual housing units. 

A condominium redevelopment could be accomplished most efficiently by one initial 

developer, who would incur the risk having to sell the units in the building. Many of the 

incentives available for a single private developer could be applied to a condominium 

redevelopment, depending on the eventual uses of individual units. 

Public Ownership/Private Operation 

The property could be acquired and redeveloped by a public entity such as the Wabasha 

Port Authority. The hotel and restaurant operations could be leased to a concessionaire, 

with the proceeds from the lease helping to offset redevelopment costs. 

Public redevelopment would accomplish the goal of reestablishing an institution that is 

widely perceived to be an important community asset 

As a publicly owned historic property, the Anderson House would be eligible for a 

variety of grant programs available only to units of government, these include Small 


Cities Grants, as well as State Capital Bond Fund Grants, or Historical and Cultural 

Grants provided by the Clean Water, Land and Legacy Amendment—both administered 

by the Minnesota Historical Society. The property would also be eligible for certain 

foundation grants and for the Save America’s Treasures Grant program administered by 

the National Trust for Historic Preservation. These incentives could help to significantly 

offset the costs of rehabilitating the building. 

Public ownership would remove the property from the tax rolls, but taxes on the property 

are quite low ($12,104.00 for 2010) and the reduction in revenue would have little overall 

impact on the city budget. 

City purchase of the property could be controversial. It could be perceived as putting the 

city into competition with local private business owners, and as unfairly relieving the 

current mortgage owner of the fiscal burden imposed when the property went into 

receivership. 


REUSE SCENARIOS 

Based on the information gathered during the reuse study process, the team has 

determined that the best opportunities for reusing the Anderson House include: 

-Restaurant/Hotel 

-Restaurant/Hotel/Condominiums 

-Restaurant/Condominiums 

To illustrate how each of these scenarios might play out, we have prepared schematic 

designs, cost estimates and financial pro-formas for each of these possibilities. Although 

each scenario could be completed by a private developer, a public developer, or by a 

public/private partnership, the team has assembled figures for the following 

configurations. 

Option 1 

Public (City) Owner/Developer 

Phased rehabilitation, Restaurant/Hotel 

Option 2 

Private Owner/Developer 

Phased rehabilitation, Restaurant/Hotel 

Option 3 

Private Developer, Multiple owners 

Phased rehabilitation, Restaurant/Hotel/Condominiums 

Option 4 

Private Developer, Multiple owners. 

Phased rehabilitation, Restaurant/Condominiums 


RECOMMENDATIONS 

The financial analyses indicate that Options 1 or 2 offer the best opportunity for 

redevelopment of the Anderson House. Options 3 and 4 could also work, but only if 

condominiums could be sold at prices approaching $300,000 per unit, which may not be 

realistic in the current market. 

The redevelopment of the Anderson House property is important to the bank that holds 

the mortgage, which considers the property to be a liability. It is also important to the 

community at large, which considers the Anderson House to be an important community 

asset. Both the current property owner and the city should determine what, if any steps 

they could take to buy down the costs of redevelopment for a new owner. The bank, for 

example, could reduce its asking price or offer favorable financing terms. The city could 

offer tax abatement, TIF financing, grant or bond funding or complete streetscape 

improvements to better connect the property to the River. 

Take steps to diversify the risk of redeveloping the property. Explore the potential for a 

non-traditional ownership model and separating operations from ownership as outlined 

above. 

Post some or all of the reuse study information on the Anderson House website, the city 

website, and the bank website as a means of providing information about the building to 

prospective buyers. 

Create and maintain a website with information about the history of the building and 

describing efforts to help people to understand that there is still something there, and that 

the operation is likely to reopen. The website should include a response mechanism that 

would capture the names and contact information of potential clients. 

Reopen the restaurant as soon as possible. The restaurant has been the Anderson House’s 

primary profit center for many years. Focusing initial redevelopment on this part of the 

operation would enable a property owner to generate revenues while minimizing 

rehabilitation costs. 

Take immediate steps to stop water infiltration and provide adequate ventilation to the 

building to stop growth of mold and mildew. 


Anderson House Reuse Study 

Addendum: 

Rehab First Floor Only 

Restaurant

Addendum: 

Restaurant Only-Public Owner 

Wabasha residents appear to share a strong and nearly universal interest in seeing the 

Anderson House returned to service as soon as possible—especially the restaurant 

operation. Many interviewees cited the large number of visitors generated by the highly 

successful National Eagle Center as an important addition to the reputation and economic 

vitality of the community, and indicated that the Anderson House was the only local 

restaurant that had the capacity to serve large numbers of tourists while providing them 

with a memorable dining experience that would enhance their experience in Wabasha. 

One way to accomplish that task would be to focus initial efforts at the Anderson House 

to rehabilitating and returning just the first floor to service as a restaurant. This would 

offer the advantage of reducing the cost of the project by allowing expensive work such 

as installation of an elevator, reconfiguring and redecorating guest rooms, and completing 

extensive mechanical and plumbing work required by the hotel operation to be deferred. 

The potential disadvantage would be a reduction in the economy of scale that could be 

realized by completing a full rehab of the building. 

The pro forma on the following pages assumes that the Anderson House building would 

be acquired and redeveloped by a public entity such as the Wabasha Port Authority and 

leased to an independent business for operation of the restaurant. For the purposes of this 

example, the schematic designs for rehabilitating and expanding the kitchen and dining 

areas and completing site work are assumed. The exterior shell of the entire building 

would also be rehabilitated. This approach could be considered to be a relatively “high 

end” approach to the work. The cost of the project could be reduced by pursuing a less 

ambitious strategy—deferring site work, for example, or completing a less extensive 

rehabilitation of the kitchen. 

Anderson House Reuse Study

Historic Properties Reuse Study of the Anderson ... - City of Wabasha

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