Seconded by council member Fredericks.

All in favor say aye.

Aye.

Any opposed say nay.

The motion carries.

Uh I'll now call to order the uh Rochester Economic Development Authority meeting for May 19th, 2025.

And uh our first item is to approve the consent agenda.

Is there a motion?

Uh it's moved moved by council member Wall, seconded by Councilmember Fredericks.

All in favor say aye.

Aye.

Any uh opposed, say nay.

Uh motion passes.

We have one public hearing on our uh agenda.

It is the economic development plan and tax increment financing plan for citywalk apartments, and I believe Mr.

Johnson, you will be presenting this item.

Yeah, thank you, President Schubert and Council members.

Um tonight before us we have a public hearing uh and a request to uh approve an economic development plan for economic development district number eighty five and a tax increment financing plan for the redevelopment tax increment financing district number eighty five one.

Um so this project consists of five parcels located at the uh intersection and corner of 2nd Street Southwest and Sixth Avenue Southwest.

Uh the project proposal is a 13-story 340 unit uh highly amenitized uh and high density housing.

Uh I think when we're looking for density of housing, this location makes a ton of sense.

It's obviously across the intersection from where Mayo's bold forward on bound projects expanding to.

Uh it's also about 60 yards away from where there's going to be a future high frequency transit uh station uh right across the street.

Um other benefits of the project is uh the site currently houses some very underutilized and some vacant uh buildings.

Um in order for us to um request a redevelopment district, the owner had to uh conduct a blight study.

Uh the study considered all of the current structures on the building to be structurally substandard.

So this is revitalizing that corner, uh, bringing it to a much higher and better use.

Um we've spent a considerable amount of time this evening talking about intersections.

One of the other benefits of this project is it is going to improve this intersection.

Right now, when you turn south going on Sixth Avenue, you enter sort of a blind uh merge into that lane where you have to look backwards to see uh if there's traffic coming.

Uh so we'll improve the safety uh vehicular safety as well as the pedestrian safety uh by making access going north across 2nd Street or east across 6th Avenue more uh safe for pedestrians.

Um the other, I think unique facet or creative facet of this project is we know that we need more housing.

Uh we know we need both market rate housing, but we also need affordable housing.

Uh in order to make the numbers work on this project, it was really, really difficult because it's on thin margins already to incorporate affordable housing into the 340 units.

So what we did is we worked with the current owner of those sites.

Uh he happens to also own an apartment complex to the east and apartment complex directly to the south.

So through the negotiations, we actually uh came to terms in an agreement to put those what are now naturally occurring affordable housing into the county's 4D program, which ensures affordability for the next 20 years.

So there'll be two two cycles of 10-year renewal cycles uh into the county's program.

Um when I was looking uh through the Maxfield study, um, it indicated the vulnerable vulnerable vulnerability of naturally occurring affordable housing, especially in areas like this that are receiving or seeing economic revitalization with Mayo's uh project with infrastructure improvements and the Link Rapid Transit project.

So it's only gonna be more difficult to have affordable housing along this corridor.

So uh what Maxfield said is many of these older developments are vulnerable to redevelopment due to their age, modest rents, and deferred maintenance.

So I them um committing to a 20-year process uh that gives us uh a longer ownership horizon and incentivizes more um uh more updates and and and more investment into those properties long term.

Um other things that I want to mention is we often talk about TIFF project and development projects, and I think we we we feel like they they're occurring much more rapidly than they maybe are.

Uh so also in the Maxfield study it said that 74% of the market rate rental development in the DMC area occurred during the last decade.

So there's actually been no new development of market rate units uh that has happened since 2020.

Um the exception to that would be um uh the former YMCA development, but that's not fully constructed yet, so those units haven't come online.

Um the only other project that we approved was a mixed income project, that would be the BRIC, uh, which uh that development assistance uh was approved in 2021.

Um a couple of other just TIFF related items since it's been a while since we've uh you know re-looked at where we're currently standing with TIFF.

So our current percentage of TIFF compared to our overall tax capacity in 2024 was four and a half percent.

Uh we pulled nine other comparable cities, some of them are cities in comparable size, some of them are just cities more located proximity to Rochester.

Um the average over a five year span of of those nine municipalities was 4.5%.

So we're right in the you know mid range of uh of other municipalities.

Um they also range from one percent from St.

Cloud percentage of tax capacity all the way up to about 11% for St.

Louis Park.

So I'd say we we we're still in a very healthy spot in terms of our overall TIFF commitment.

Um another fact that I just want to touch on really quick and then we'll open it up to the public hearing, is that uh we did look and we have we anticipate seven TIFF projects to come in line in about the next three years or in about three years, and that'll be about the time that if this TIFF district is approved that we're actually will actually be collecting increment on Citywalk.

Um and those seven TIFF projects would account for about 103 million dollars in total market value.

So in about three years, we'll be decertifying uh seven projects with a value of about 130 million dollars.

So I think that's another um key point to add.