NEW ULM – The city agreed to move forward with a tax abatement program for a new winery located in the former Lamplighter building.

Rebound Real Estate recently purchased the former Lamplighter building with a plan to convert it into a wine bar and restaurant. The city council previously authorized a conditional use permit for this project. However, since the building experience a major fire in Sept. 2022, it will require significant redevelopment. The total project cost is estimated at $2 million, of which $1.4 million would be dedicated to construction activities.

Rebound requested a tax abatement program to rebate a portion of the property taxes to the owners to offset redevelopment costs.

New Ulm Community Development Director David Schnobrich said the city currently has six tax abatement program. The abatement programs can be used for general economic development that improve the tax base.

“This property certainly sustained substantial fire damage and it is going to take a lot of work to get it deconstructed and reconstructed,” Councilor Les Schultz said. “I think tax abatement is perfect for this project.”

Schultz made the motion authorizing city staff to move forward with the step necessary to setup a tax abatement program, with a second from Councilor Eric Warmka. The motion was unanimously approved.

A public hearing on the development agreement is required before final approval of the tax abatement.