In 1974, the City of Owatonna purchased the campus of the former Minnesota State Public School for Dependent and Neglected Children which had been in operation from 1886 until 1945.

Beginning in 1945, the orphanage was phased out and renamed the Owatonna State School. This school provided academic and vocational training to the states mentally disabled. The school closed in 1970. The site was renamed West Hills, and now serves as an administrative center for the City of Owatonna, as well as housing several non-profit organizations in the various historic buildings. The main building was built in 1886 at a cost of $50,000, and was named to the National Register of Historic Places in 1975.

After the buildings of the former State School had stood empty for several years, a group of Owatonnans, intent on finding a home for a community arts organization, walked through the empty forgotten rooms at the rear of the main building and could visualize musicians performing, rooms filled with paintings, decorative objects, and workrooms utilizing long-forgotten equipment with young and old learning new artistic skills. This was soon to become a reality.

The Owatonna Arts Center was founded as a 501(c)3 corporation in 1974, under the direction of Mary Leach, with artistic flair being supplied by Marianne Young. The first boards of OAC rolled up their sleeves and set out to clean and restore the facility, and invited the community to join in to become a part. Members, businesses, and volunteers all contributed their time and donations to the cause.