Originally posted on postbulletin.com on Nov 4, 2014, written by Jeff Kiger.

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A South Dakota developer plans to build a $15 million, 110-unit apartment complex near downtown Rochester, plus 179 more apartments on the far northwest side.

Stencil Homes of Sioux Falls, S.D., has purchased three buildings — Buckeye Liquor, the empty Flowers By Jerry shop and the 3rd Avenue Pet Hospital — on Third Avenue Southeast and Fourth Street, across from the Olmsted County Government Center and Rochester City Hall.

Developer and builder Nate Stencil and his partner, Sean A. Kaufhold, plan to build a six-story apartment complex with 3,100-square-feet of retail space on the main level and underground parking for residents.

"We're really excited about this project," Stencil said on Monday. He expects construction to begin in early spring 2015 and the complex to be completed in spring 2016.

To clear the way for the project, his company purchased the former flower shop at 410 Third Ave. S.E. for $450,000 on Oct. 15 and followed up with a $600,000 buy on Oct. 22 of the Buckeye Liquor building and nearby parking lots. Stencil bought those properties from Kevin Patton, the owner of Flowers By Jerry.

"I just think it is going to be nice to put something there to revitalize the neighborhood," Patton said.

Diane and Robert Satterwhite, who operate Buckeye Liquor and now lease from Stencil, said they will move their liquor store and continue to serve Rochester. However, no timeline for that has been determined.

The developers also recently purchased the 3rd Avenue Pet Hospital at 414 Third Ave. S.E. Dr. Caroline Baihly, who has owned 3rd Avenue since 1998, is essentially merging her clinic with the Quarry Hill Animal Hospital. After Nov. 24, Dr. Baihly and the other doctors at Quarry Hill will serve her client list.

"At this point, I looking forward to the change," she said.

With the surge of Destination Medical Center-driven development, this was something Baihly expected to happen eventually.

"I looked at the practicality of the whole thing," she said. "It seems when I look at the DMC map that this whole area is included. I think DMC has a lot to do with it."

Stencil said DMC did have something to do with the Third Avenue project, though it cropped up after they already had decided to invest in Rochester. He began working with Rochester Realtor Merl Groteboer about three years ago.

"When we started, DMC wasn't even on our radar. We were well into planning before we even heard about it," he said. "Though the project in downtown was probably influenced by it."

Second project

Stencil and his partner also have lined up property near the 65th Street Northwest interchange across U.S. 52 from the new North Menards store. Construction of the 83-unit Woodland Park apartments began there a few weeks ago. Stencil said he expects Woodland, which architecturally will be similar to the Metropolitan Marketplace complex, to be completed by late spring to early summer.

Work on Stencil's third complex, Kascade Place, is expected to begin nearby soon after Thanksgiving. It will have 96 apartments.

Those apartments, along with the proposed downtown ones, will be priced comparably to other market rate units in Rochester, he said. That means rents ranging from $900 to $1,000 a month.

"We feel very good about the market apart from DMC," said Stencil. "We believe the need for housing is coming as part of Rochester's natural growth."