The University of St. Thomas has decided to sell the Daniel C. Gainey Conference Center in Owatonna, Minn., because it cannot continue to operate the center in a financially sustainable manner and has determined that expansion plans would not overcome ongoing weaknesses in the conference services market.
The center, which opened in 1982, has struggled financially over the past decade and has had annual deficits. St. Thomas has considered options, including expansions, to make Gainey self-sustaining but concluded that it cannot continue to operate the center.
The St. Thomas Board of Trustees, which has reviewed the situation over the last year, voted Thursday to put the 180-acre property on the market.
“This was an extremely difficult decision because we have had a great relationship with the Owatonna community, and we are proud of the services that we have offered over the last three decades,” St. Thomas President Julie Sullivan said. “Unfortunately, we don’t believe we can return the center to break-even status in a way that remains consistent with our educational mission, and we have determined the most prudent action is to sell the center.”
St. Thomas will operate the center as a going concern during the marketing process and will soon select a broker. Depending on a buyer’s plans, the university may operate the center to the date of sale or close it before any transfer.
The center has nine full-time and seven regular part-time employees, most of whom live in the Owatonna area. The property includes the Gainey home, a replica of a French Norman country house; the conference center, which includes meeting rooms, dining facilities and 35 guest rooms; a classroom building called the Mews; two smaller houses; and horse barns.
St. Thomas will retain the ownership rights to the Winton Guest House, designed by world-renowned architect Frank Gehry, either on the Gainey property or on a new site. The house was given to St. Thomas and moved from its Lake Minnetonka location to Gainey, where it was renovated and dedicated in October 2011. The house is open for public tours and is used by the St. Thomas Art History Department for academic purposes.
The university has considered expansions at Gainey over the last 15 years as a way to increase volume and improve financial stability.
An expansion was announced in 1999 to provide additional meeting space and bedrooms, but the project was put on hold when Gainey’s largest client, Honeywell, was acquired and moved its conference operations to New Jersey.
St. Thomas raised $2.6 million in gifts and pledges for the most-recent expansion plan as part of its Opening Doors capital campaign, which concluded in 2012. The plan included a second conference room, a chapel and larger dining and kitchen facilities to increase capacity and accommodate multiple clients, but was not finalized because of lingering concerns about the conference services market. St. Thomas will be in contact with project donors in the weeks ahead.
Gainey built horse farm on property
Daniel C. Gainey moved to Owatonna in 1922 to work for Otto Josten, who owned a watch repair and jewelry store, and became general manager within six months. Gainey bought the business and embarked on an expansion in which Jostens became a leading producer of class rings, yearbooks, and graduation announcements and diplomas. He served as president and CEO of Jostens from 1933 to 1968, when he retired.
Beginning in 1939, Gainey purchased three farmsteads consisting of 180 acres along the Straight River on the southern outskirts of Owatonna, and he began to raise Arabian horses. He went on to develop a world-renowned line known as Gainey Fountainhead Arabians and served as president of the Arabian Horse Registry from 1958 to 1972.
Gainey hired architect Edwin Lundie to design the French Norman house, which was completed in 1957. The house is filled with materials from around the world, including Louis XV and Louis XVI period furniture, oak-paneled rooms, silk wall coverings, marble floors, teak countertops and elegant chandeliers.
St. Thomas receives Gainey property
Monsignor Terrence Murphy, president of St. Thomas from 1966 to 1991, and Gainey were friends. Upon his death in 1979, the Gainey Foundation left the property to St. Thomas, which used proceeds from gifts from the Gainey, Jostens and Owatonna foundations to construct the conference center.
The $1.5 million center, linked to the Gainey house, opened in August 1982 and was marketed to businesses, nonprofit organizations and government agencies as a venue for retreats and planning meetings. In recent years, external clients typically have accounted for 60 percent of revenue, with the balance coming from St. Thomas departments that used the center for retreats, seminars, meetings and classes.
St. Thomas has been involved in community projects such as Music in Owatonna, a civic group that has sponsored performances at Gainey. The first two festivals, in 1990 and 1992, had a classical music theme, and subsequent festivals featured sacred, Irish, blues, country, big band, jazz and bluegrass music (in 2012). St. Thomas joined with Owatonna for its sesquicentennial celebration in 2004 to host the Minnesota Orchestra in a Fourth of July concert at the nearby Steele County Fairgrounds.
In the late 2000s, St. Thomas considered the establishment of a wildlife art gallery at Gainey to recognize the work of Owatonna and southern Minnesota artists, several of whom started their careers as commercial artists at Jostens. The gallery concept failed for lack of funding.
St. Thomas created a Gainey advisory board of community leaders and university representatives in 1988. The board meets twice a year and was active in expansion discussions in recent years.
“The board has been instrumental guiding Gainey over the years, and we thank members past and present for their involvement,” said Mark Vangsgard, vice president for business affairs and chief financial officer, who serves on the board. “We are proud of our association with them and with the Owatonna community.”