Staff photo by Clay Schuldt The buildings at 511 and 513 N. 3rd St. face demolition as part of a property rehab by owner Doppeleichen Vineyards, which plans to redevelop the properties to make wine.

NEW ULM– Doppeleichen Vineyards is planning a demolition and rebuild of the properties at 511 and 513 N. 3rd St.

The two properties are annex buildings behind 227 N. Minnesota St. The properties were add-ons to the back side of the Minnesota Street property. The existing historical building facing Minnesota Street will remain intact. The demolition is limited to the one-story buildings on the north-facing North 3rd Street.

Currently, these buildings are vacant and were previously office space. Owner Paul Neyers’ plan is to rebuild the properties into winery production and tasting spaces.

The project would include the demolition of interior walls and the installation of washable surfaces throughout the properties. Floor drains will be added to accommodate the cleaning of tanks.

Neyers’ original plan was to rehab the two properties, but the expense to fix the buildings exceeded $150,000. He said after this cost he would be left with an old, inefficient building that was patched back together.

The building will require specific equipment for wine production, and integrating these features into an old building would create additional difficulties. Neyers decided it was more efficient to replace the structures.

The property currently has steam lines connected to it. Neyers will extend the lines into the new buildings. He said steam is used in wine production for sanitation purposes. It is used to clean barrels.

The cost of the demolition and rebuild is estimated to exceed $600,000. Neyers requested a $74,900 Commercial Property Rehab loan from the city’s Economic Development Authority to cover some of the cost. The EDA board approved a 10-year loan at 2 percent interest earlier this week.

Neyers has additional funding in place for the project, including a reimbursement grant from the Minnesota Department of Agriculture. A Property Assessed Clean Energy (PACE) program also might be implemented.

No start date for the demo and construction project is set. Neyers said it is dependent on contractor availability.