Welcome everybody to our November 24th uh Rochester City Council study session.

And we have three items on our agenda this afternoon.

We will have a natural gas franchise fee engagement strategy report.

We'll have a DMC 20-year development plan update, and then we'll go into a closed session.

So with that, I will uh turn it over to Mr.

Tyler Neemeyer to present the uh natural gas franchise fee strategy.

Thank you, Council President.

Uh Council members, mayor.

Thanks for having us here today to talk about our proposal for the natural gas natural gas franchise fee engagement strategy.

Uh Kayla Betzold and I uh will be giving the presentation today.

We'll both stand for questions after a short presentation here.

So today again, we want to introduce our strategy for engaging the community on the concept of natural gas franchise fees.

Uh these fees are an option to create a stable local funding source for our sustainability efforts.

And this is a timely topic given the council's recent adoption of the strategic priority on responsible environmental stewardship.

So our specific purpose today again is to update council on natural gas franchise fee engagement strategy that we are going to approach the community with and the framework therein.

We're going to outline our approach for gathering that input through engagement activities and share a timeline for reporting back to all of you.

So first, let's quickly uh revisit what natural gas franchise fees are.

So franchise fees allow a city to collect a small steady fee from utilities.

In this case, we're talking about Minnesota Energy Resources.

Those franchise fees are you uh used to offset uh the utilities use of the right-of-way as part of their franchise agreement.

Um we do have a current agreement with Minnesota Energy Resources, um, and that includes a provision to implement franchise fees, but we have not exercised that provision to date.

Uh utilization of franchise fees is not unique to us and our peers or sorry to our peer cities.

Um other utilities also pay similar fees.

So we also collect a natural gas, or sorry, we collect a franchise fee on our cable utilities, and the city-owned utilities also pay a payment in lieu of taxes fee.

Uh the goal again here is to collect um collect the fees to support the city council strategic priorities and give us a more stable funding source.

That way we can plan uh better into the future and also have again a stable funding strategy uh to implement those efforts.

Um today, a lot of our sustainability efforts really rely on grants, which is in itself inherently unstable.

This would be uh much more stable funding source for us.

So, how do natural gas franchise fees work?

Merck would add a fee to their bills.

Uh, they'd collect those fees on our behalf and remit the fees over to the city.

Our current concept that you have in front of you in your packet would split those collected fees 50-50 between community efforts and more organizational efforts.

So, examples of um community efforts might be things like weatherization of houses or cost shares on energy efficiency investments that people could make in their homes.

Uh organizational efforts might focus on our, for example, transition to uh electric vehicles in our fleet.

So franchise fees are also a visible funding source.

So they're clearly identified on Merck's bills or would be as well as the council takes specific action on these items so people can see a direct connection between collection of these fees and what they're used for.

We brought in WSB, a local consultant to help us uh with this engagement strategy.

Uh WSB has a lot of experience with uh helping municipalities propose these fees to their communities as well as implement them through programs.

So going forward with positive feedback tonight from the council.

After further development of our engagement strategy with WSB, we would enter into an engagement period between January and March of 2026 and come back to council with a full recommendation for implementation for your consideration in April.

I'll give it over to Kayla here, and she'll walk through more of the specifics of the engagement strategy.

Thanks, Tyler.

Hi, City Council members, council president, mayor.

I'm Kayla Betzel, I'm the sustainability coordinator, and I will talk a little bit about the engagement strategy that we're kind of thinking through.

So really it's kind of built around three main goals.

First is providing you know transparent and accessible information to the community about what we're thinking about or what we're proposing.

Next is really listening to residents and business owners and community stakeholders.

So first, is there interest in this type of fee?

If so, you know, what type of fee, what fee level, what type of fee structure.

I think there are a lot of you know different options for not only fee structure, but also the level of fee, and then of course the use of the revenue.

And so what kind of community programs might be of most interest to our stakeholders.

And then third, we want to make sure that the recommendation that we bring back to you all really includes all of that feedback that we hear from the community throughout the engagement period.

So we're really working to kind of summarize all of the feedback, identify common themes, and then share those findings publicly and with you when we would come back with a final recommendation.

Looking at the IAP2 spectrum of engagement, most of our efforts are in the consult level.

So we're actively seeking community uh input, documenting what we hear, and then using that input to kind of shape our final recommendation, like I just mentioned.

Some of our efforts also do fall into the inform and the involve category.

So at the inform level, like I mentioned, we will have information that's available to the public, and I'll talk a little bit more about those tools in a in a few moments.

And then on the involved level level, we do plan to kind of consult or involve with certain stakeholder groups like housing groups or business focused groups as they kind of represent multiple stakeholders, and I think you know, have some specific needs and perspectives that they might be able to share with us.

So overall, we're consulting, but we're also informing and involving certain groups more directly.

So this kind of gives an overview of the key audiences that we're thinking through for engagement.

So, first community members.

This is homeowners, renters, landlords, and then also nonprofit and faith-based organizations.

And really the goal of engaging with residents and community members is to understand individual impacts.

How does this affect different housing types, different living situations, and then what types of community programs might be of most interest or most beneficial?

Second is business partners, and so this ranges from small local businesses to large energy users, and we're really here trying to understand you know the operational impacts, cost impacts, and then you know, potential fee structures that might be of most interest to businesses and kind of how programs might align with long-term planning or sustainability goals.

And then last is our utility partners.

So we're we've already met with both of our partners and we'll you know, we'll keep them involved throughout the process and really work with them on the technical coordination and any sort of information that would come in the future if there were to be a conversation around billing or implementation of the fee.

So, next kind of high level the engagement strategies that we're thinking through.

We plan a mix of different engagement strategies.

So everything from in-person meetings and virtual sessions for both residential and commercial groups.

Um, we're really planning to think through how do we join existing meetings or existing community events so that we can meet people where they're at and not expect you know residents or business owners to come to us for this, but really to make engagement as accessible and easy as possible.

Uh, we're also planning to engage with the broader community through a dedicated website page, which will kind of have all of the information about the project, and then um and then some social media posts as well, letting people know about how they can engage.

And this is just a way where people can kind of remain engaged with the project throughout the duration of the community engagement period.

A little bit more specifically, here are some examples of the tools that we'll use.

So on the informing side, um, the dedicated website, we're putting together some you know plain language kind of one-pagers that clearly explain the terms, um the different options, the different levels that we're looking at, um some FAQs, some information about you know, what is your gas bill look like, how do you kind of decode your gas bill, and then also some scenarios or a calculator showing what a fee impact would look like on an actual bill.

And then also some scenarios or a calculator showing what a fee impact would look like on an actual bill.

And then when it comes to engagement tools, again, we're putting together or we would put together slide decks for our different engagement events and community events that we would host, uh virtual and engage uh and in-person sessions, and then um social media posts.

This is just a little overview of the timeline that we have here.

So since receiving direction in in September of this year, um we kind of started to develop the engagement strategy in September and October.

We're now here today presenting that engagement strategy to you all.

And then after today, in December, we would work with our consultant to kind of um and our communications team to um kind of prep all of the uh communications and engagement materials.

So the website, the uh one pagers, the slide decks, things like that from January until March would be when we're engaging with the community through the residential and commercial facing in-person and virtual listening sessions, um, briefings, uh, community meetings, things like that.

Um, towards the end of March, we would start, we would work with our consultant to kind of start to um summarize all of the feedback that we've heard into a recommendation report, which we would then share with you all in um April along with our final recommendation.

And so that's everything that we have for you today.

Um I'd be happy to take any questions that you have along with Tyler, and then we also have Jenna Bowman here from communication.

Thanks so much.

Thanks so much.

Uh Councilmember Miller.

Thanks so much for the presentation.

Uh I guess uh I just want to start off with a comment of saying thank you for giving us a detailed strategy for engagement first and foremost.

I know this is a topic that many people in the community will have an initial opinion on and perhaps a different or more informed opinion after an engagement process.

So I'm really glad to see that as we've adopted a foundational principle of inclusive decision making, I see that really tied into this process.

Uh my question though was about uh the number of cities in Minnesota utilizing a gas franchise fee.

Do you have statistics?

Uh number of cities.

Um, yes, we have so several cities have natural gas franchise fees, um, at least over 20 that we've seen.

We know that there's at least six cities that are directly using franchise fees to natural gas franchise fees to fund environmental and sustainability work.

Um, and then there are other cities on top of those six cities that use um the franchise fees for trails for municipal facility upgrades and energy efficiency projects, and then it kind of gets more broad from there.

And where are we as a city currently using franchise fees, not in natural gas, but just in any utility access?

Yes, so we do have franchise fees on our cable utility, um, and then we have payment in lieu of taxes for electric water, I believe stormwater and wastewater.

Okay, so this is a fairly common uh structure in Minnesota and even in Rochester.

Right.

It is.

And in our conversation with Merck recently, we asked um, and they have uh natural gas franchise fees on their bills in about 20% of the communities that they serve in Minnesota.

Okay, thank you.

Other questions?

Councilmember Palmer.

I guess the end use that you're trying to do is for environmental reasons.

Um, when we first brought this subject up, it was uh for me a budget issue that we would just take it off our budget.

Um, and I don't see that as an um an alternative here.

So from an environmental perspective, if if how would you run a program because we already do it with our um CDBG money on insulating the houses and and and bringing them up to code?

Sure.

Yep, I'll answer the second part of that question first.

So we are in preliminary conversations with RPU, but we do feel like this would be a partnership with RPU and it would kind of be an add on, you know, to help enhance their existing conserve and save rebates.

We definitely want to partner with RPU, not recreate the wheel, um, you know, require or you know, work with RPU to make sure that people are taking advantage of the current rebates, and then this would kind of be an add-on or could be.

But I think that's really part of the engagement, you know, that we are interested in doing with the community is to say what types of programs would you be interested in, and how can we either you know enhance the existing rebates or fill maybe financial gaps that exist right now?

So both Merck and RPU have uh programs that I've used and and they work pretty simple.

So I don't know, I've not heard that there's an outcry and that we're not using it enough.

And I've always said that we're the second best state in the United States for energy efficiency for our new houses.

Now I find out we're the number one state for energy efficiency.

So there's a huge amount of houses built since 1990 that this one to apply to.

So I'm I'm I'm not particularly sure this is a great fee to be put on people who would have no use for it.

I was gonna ask if that was phrased in the form of a question or yeah.

How would how would somebody with a house built since 1990 use this?

What's your idea that they were going to Yeah?

I mean, I think, and again, we kind of have just had preliminary conversations with RPU.

We definitely would want to partner with them.

I think there's an opportunity to, you know, um use this to enhance their energy audit program.

So for existing homes to pay to bring down the cost of the energy audits that they that they provide.

Also, um, with some of their programs, they are income qualified.

And so there are folks that you know might be a little bit above the income qualification level for um a subsidized program, but maybe don't have the funding to pay for the energy audit, or more importantly, pay for the upgrade after the audit.

And so I think this funding could be used to essentially incentive stock onto existing rebates or again fill financial gaps that there might be currently.

Also, RPU has you know limited funds per year.

They usually reach their cap, and when they reach their cap of their funds per year, they do stop um their incentives.

And so I think this could just help to kind of bolster their programs and enhance their existing programs if if I can, I'd also like to add that you know, as currently proposed, at least as a concept for the community to respond to, we have a 50-50 split in there, and half of the funds as proposed now would go towards more organizational efforts for citywide efforts.

That would benefit the whole community.

The the biggest benefit I see to a more stable funding source like this one is that it may help shrink some of the timelines involved in the council's priorities around environmental stewardship.

So that's got a broad benefit to the community, even if somebody with a newer house isn't directly seeing the benefit of an energy audit or something like that.

But you'd agree that that raising people's franchise fee on all people use the natural gas would affect all the city.

Correct?

Yes, everybody that's receiving a Merck bill.

Their bill would go up.

Yes.

Correct.

Councilmember Keene.

Thank you.

Um first, I just wanted to note that we're not yet scoping this to say that we are targeting how much we're gonna try to collect, we're gonna try to do that through the engagement, I believe.

But can you talk broadly that says this should fund us in the range of four million dollars or less, or do can you get a feel for that?

Yeah, so we have um several different kind of preliminary scenarios that we're working through based on you know what we've seen in other communities.

Um there are yeah, we have there are several different scenarios.

We're kind of looking, we have six options right now that we are looking at, um, ranging anywhere from just under $600,000 to just under $3 million, kind of based on the direction or the feedback that we hear from the community.

So I would say there's multiple different, various different ways that this could go at this point, but that kind of gives you a ballpark.

Yeah, that's helpful to get a feel for that.

Do you know approximately how many gas meters there are in the city of Rochester?

Yes, so it's similar to the RPU water meters.

Um, so about 45,000 um on the residential side.

Um, let's see, I do have the rate classes.

So for uh 47,500 um total with uh just under 45,000 of those on the residential side.

So oftentimes in multifamily buildings, there is one gas meter.

It's not uh metered individually.

So, you know, depending on the way that we would go with fee structure.

Um, if it were you know a flat fee, there would just be then one fee on a commercial build, a commercial and multifamily building.

So various different options though.

Okay.

No, I've seen them with the with the uh other utility works.

So I just more of a base question, make sure we get it straight.

Is the uh engagement asking the community to gather or uh whether they want the fee or not, and what type of fees, or is it are we assuming that we're doing the fee when we do the engagement?

I think it's probably both.

I think it's uh uh question of the community about if we should and how we could, if that makes sense.

Um, in I think it's important, especially for the council to be making a decision in that context of how is this generally received out in the community?

And then question B is then how do we actually what's the best strategy to implement if if it sounds like the community does want to move ahead with this?

Okay.

Um I know you mentioned communications, but I guess I'm as just the base question.

Um I do you have a like a method of um kind of ferreting out the difference between special interest input and grassroots community input, and how do you wait it average those?

Like if you went to the sustainability group, you might get one answer.

If you went to the chamber of commerce, you might get another.

How do you weight those?

We might phone a friend for Jenna's help on that one.

Ms.

Bowman.

So I have to push okay.

Sorry, I wasn't pushing hard enough.

Um I think uh thank you, council member.

Great question.

I I do think that's the benefit of bringing in a partner like WSB who's done this work in other communities.

Um, one of the key things that we've asked for them to do within this work is to um very well document um the engagement that we're doing.

So, as far as uh the different uh engagement processes that have been outlined, whether it's in person, um, et cetera, that will be a key thing that we'll be looking for them to provide is that delineation between um, you know, community members and and special interests.

And I think that will be part of moving through this process as we then have that report to indicate where are we seeing engagement and and feedback from those with maybe a special interest compared to general community, but being very clear in what that is.

I wouldn't, I I hate to give a too far ahead, but I think as we have with other projects, um, you know, be it a parks project or whatnot, I think we've have done a decent job of being able to give narrative around, hey, where is this feedback coming from, including, you know, throughout various states of the process, but I think once you see the overall report come back to you, um, including where we might have gaps or some questions being clear to you as the elected officials of here's where we feel really strong about the feedback and engagement we've got, and if we have any gaps, being clear about that, but also with the strategy that's been outlined here.

I think there are a number of opportunities to level set and work to address those gaps throughout the course of the process.

Very good.

Thank you.

I uh so just in closing, I've spent some time with the public works team.

I do have some concerns with this, and part of it is just like when we were going through our strategic initiatives, you end up with strategic priorities that are in somewhat conflict between affordable living and equity, and then the need to fund our sustainability uh requirements.

Uh the fact that this is an engagement coming in front of us now, I wanna support this.

But I also want to say like I I am concerned about those trade-offs as we go forward.

Thank you.

Councilmember Doring.

Yeah, thank you.

Um and I I really appreciate the presentation as well.

Um my esteemed colleague brought up uh housing stock questions.

So I think I have some questions for community development.

So sorry to put you on the spot.

I'm curious how much of our housing stock in Rochester was built after 1990.

Percentage of housing stock?

That's a good question.

I'd have to look into that to get you that number.

Okay, and then along those lines, then I would also be curious how much of that stock built after before 1990 is what we consider affordable housing in this community.

Are higher priced homes built after 1990 or before 1990?

Administrator's alms, were you gonna add something?

I'm going to, but I'm sort of regretting it.

Um the way that the LGA formula works would suggest that we don't do well in that category.

So but that doesn't give you the details.

No, I so the the question of equity is is popping in my head as well.

So my my colleague uh was suggesting uh that uh because um you know, houses built after 1990 are are built to certain uh standards that uh make in environmentally sustainable uh they're more environmentally sustainable than houses built prior to 1990, that this program wouldn't affect uh, you know, not applicable to everyone.

I would I would suggest that all of our programs aren't applicable to anyone and that there is still uh community good and equity, equity built into programs such as uh a franchise fee to incentivize people to um to make their their homes uh more environment environmentally sustainable.

Um I would love to hear some more about uh some of the the programs or the the organizational uh efforts in in terms of environmental sustainability that could be funded from a franchise fee, uh other than just modernizing our fleet or electrifying our fleet that could be funded if we implement a franchise fee if we go forward uh with this proposal.

Yes, and um we will be kind of I think working more on that after, you know, kind of running the engagement strategy by you all, certainly as we prepare for engagement um in January with our consultants, but we are taking a look at what are other cities using these franchise fees for.

Oftentimes it is cost share programs, like I kind of mentioned.

Um also, you know, it could be things like e-bike rebates or even bicycle rebates or something that's a little bit more across the board that anyone in the community would be able to take advantage of.

But I think that's really part of the engagement.

We want to go out, we want to ask people what types of programs are you most interested in?

What do you value?

Um, what you know, community benefits are most important to you, both on the community side, so the funding that would be going back into community programs, but also on the municipal side.

So is it something where you know the funding internally would be used for municipal projects that have a direct benefit to the community?

So things like you know, trails and EV charging stations rather than maybe municipal building electrification.

I'm just throwing out examples, but you know, I think these are questions that we're interested in asking folks.

So really trying to understand what is of most interest to people and most valuable for the use of this revenue.

Councilmember Wall.

Thank you.

Will uh staff have to be hired to administer the program?

Um I think you know, that's I think you know, we have that included in that it's included in my work plan for 2026.

And I think you know, it's something that we would budget for and prioritize um based on the outcome of the project.

I don't know if you have anything.

Yeah, I guess I would comment to that, you know.

I mentioned earlier about timelines to advance the council's priorities.

One of our limitations, frankly, is how many staff we have dedicated to sustainability, right?

So if we had a more stable funding source, um our staffing levels relative to the programs we might be trying to implement is one thing that we would look at.

Would you uh agree that uh this really has nothing to do with the franchisee other than the collector of funds and the writing of a check uh to Rochester?

I would say that there is at least thematically some connection there between uh fossil fuels and sustainability efforts, right?

Um there's maybe um more alignment between collecting franchise fees with a fossil fuel uh utility over, I mean, sustainability focused franchise fees over a cable company, for example, right?

There might be a difference there, but otherwise it is yes, literally just a pass-through for them to help us with our efforts.

And maybe I asked the question incorrectly.

Uh the franchiser or franchisee is not paying a cent of this.

Correct.

It's it's a pass-through cost for them.

It doesn't necessarily increase the cost of their business other than they do have some uh assuming some relatively small administrative cost to pass it over to the city.

So it really is, and uh uh we had some numbers put to it, really an effort to raise an extra 600,000 to under 3 million dollars from residents of Rochester.

Yes, correct.

So I think uh it could be more fairly called be more fairly called a tax.

I'll leave that label to you all, but it it is a fee collected for services, right?

Yep.

And then I hear the objection that uh uh renters would participate in this uh and uh they don't pay property taxes.

Uh does that sound right to you?

Well, first can you help me with does that sound right?

Okay.

I uh uh okay, I'll put my cards in the table.

Um a landlord owns a home and rents it out, and the property taxes up go up $500.

Uh would you uh say that the landlord is likely to say, I think I need to recoup that $500 rather than say, I think I'm going to make $500 less next year in my rental.

Sounds reasonable.

And uh the same would be true of apartment houses, a 220-unit apartment house, if uh if um the cost of gas uh goes to a certain point, they are going to uh or the property tax uh goes to they're going to assess that against their renters, likely.

So so I you know, I believe that renters pay property tax.

Uh it's just paid through their landlord.

So uh to somehow use a franchise fee to say it'll be more fair because it will uh reach everybody in Rochester.

Well, I think it's going to reach everybody in Rochester one way or another, uh, either through uh owning a property or renting a property.

I'm following your logic, but Kayla might have more to say on the distribution of that cost of pairs.

Well, I think just from I mean, I can just speak to I guess the meter side of it.

Um different, you know, if you're talking a rental home, that would be a little bit different than a multifamily building.

So typically gas is metered more similarly to water.

So and again, there are a lot of variables on the table, I think right now, as far as which direction we would go with the type of fee and rate structure.

If it were a flat fee based on the meter, then a multifamily building would just have one fee if it were metered that way, which according to Merck, um, it does sound like a lot of multifamily buildings do have one meter.

Um, and so you know, that is something that we would be considering, especially as we talk to housing groups, property managers, things like that when it comes to the multifamily situation.

And I guess my point is uh whether we call it a franchise fee or whether we raise taxes by a million or three, uh, it's going to come from the same pockets, whether you're a renter or a business owner or uh single family homeowner.

Um, I have kind of one more question, but then uh is this a time to offer an opinion as well, or just wait on it?

What I would say is uh we are in a study session, so we we do have a more on informal uh process, and so uh council members can uh mix their questions with their commentary.

Uh what I would caution the council is uh if don't ask staff to agree with your your assessment of it or make a comment of how you've assessed it.

That's that's an interesting commentary.

I would disagree with that, but if that's the chair's rule, um we are going to be a gentle suggestion.

I heard it as a rule, but I'll take it as a gentle suggestion.

Um we are going to uh seek community feedback.

The September 3rd presentation was a great deal more uh uh uh fleshed out than what we're currently seeing.

With there were three options, now you're saying there's six.

Uh the uh amount of money that we believe could be raised with each option, uh the pro programs that we're going to use this for.

It sounds to me that the program is really really quite well baked already before we uh go to the public to ask uh their uh opinion.

Uh I know that you said that uh we would be asking whether or not they think it's a great idea, and then if, then go on to I think some of the things that I was just saying.

Um but I I would I would uh like to have a really open forum uh with the public as to is this something, is this a really a way that we want to raise 600,000 or 3 million uh dollars.

Um yeah, again, I I just I I think this is uh more a tax than it is uh some kind of fee and the other uh fees that like the cable fee.

You don't have to you don't have to buy cable.

Uh you do need gas if you're going to live warmly in Minnesota.

Most most of us do.

Thank you.

Thank you, council member.

Council member Fredericks.

Thank you.

More of a an opinion just to share.

Uh is that all right?

Absolutely.

That's what you were elected to do.

Thank you.

Uh Mr.

Keene actually raised some good questions earlier, and I I am really in his camp.

Uh I understand the desire to follow what the council has laid out as their basically their game plan or what they'd like to see have happen for just to put it in plain terms.

Uh but the way I feel about it is the same way I felt when we talked about it last time.

This is essentially a regressive tax.

It hits the people that make the least amount of money the hardest, and we're taken from them and we're distributing it the way that we see fit.

And I'd really don't agree with that.

Uh a franchise fee on optional items, I completely understand.

Not on essential items.

Same reason there's no tax on clothing and food.

Um, I just don't believe there should be.

And people are heating their homes with natural gas and hitting them with a fee, whether it be on usage, whether it be on meat or whatever, it's still a regressive tax.

Um, although it's only, I did read the numbers, you know, although it's only five to ten dollars, you know, but that adds up.

If we just keep doing that a little bit here, a little bit there, the community doesn't appreciate it.

Though the the overriding thing I hear is quit taxing, quit feeing, all this and that.

So I understand that there's a marriage here.

We're trying to um find the funding to uh achieve our objectives, but it isn't by adding more tax uh uh to people that already are saying, hey, let's stop.

Let's let's let's put the brakes on here.

So that's what I got.

Thank you, council member.

Uh Mayor Norton.

Thank you.

So uh the council's taken a position that we were going to move ahead on this earlier this year.

And this is a process to how are we going to do that?

So I think we're jumping the gun.

I hate that expression.

But jumping the gun a little bit in uh trying to determine how much this will be or what the end game is, because what we've been handed today is a really good process that is better than most processes I've seen for some time that lays out how they're going to do it and what they're going to learn from the residents.

And if there's anything that I think we all have agreed on, is that we want to listen to our residents and have their voices at the table before we make decisions.

This process is going to allow us to do that.

So I would say we need to listen to the people in this process and ask that they bring back an honest representation of what they heard.

We know there will be people that will support it, and we know there are people that are not going to support it.

You can call it a franchise fee or a tax, but we all know that in government, in running cities, states, and the country, it is taxation from the history of this country that we do that by.

So this isn't unusual.

It is just trying to find a way that makes sense to the expenditure with where you're getting those funds, which is why we are using a franchise fee in this case.

Um and franchise fees go back a long way.

And in our community, we've not utilized this one, and we could have.

And so I think it is it makes sense.

Um I I do not necessarily agree that it's regressive because when yes, we all have to use gas, but the size of our home and the amount of gas we use, the amount of gas we use is somewhat control.

But the size of our home, if you have a smaller home, you will use less gas.

If you have a large, expansive home, you're going to use more gas, and you're going and the pay will be commensurate with the amount of uh electric or uh gas that you're using.

So I I don't think it's as regressive as as maybe other taxes are.

I'm um very comfortable with the process, and I just want to thank you for really being thoughtful about how we're going to look at this and listen to the people, and that's what we should be doing.

Councilmember Miller.

Thank you.

I have a couple of follow-up questions based on this discussion.

And I'd like to ask Mr.

McCullough about the conserve and save program.

Is that funded by ratepayers?

Uh yes, Councilmember Miller, the conserve and save program is primarily funded from electric rate pair funds.

It's a state statute requirement for us to invest to try and achieve one and a half percent annual savings, so it does come directly from electric utility rate payer funds.

And so it's it's fair to say that it's driving behavior and lowering energy use because it exists and because it's funded, right?

Um I would say that it is the source of funds we use to implement the conserve and save program.

Um to answer that question.

But have you not also reported lower per capita energy use among households in Rochester?

We have.

I can't speak to whether there's a direct connection between the rebate programs and that.

I think that's also a a factor I would assume right now of newer and more efficient housing stock coming online as well, balancing that lower.

Uh and so then a question uh for staff on uh property tax.

Were we to raise property tax?

Does that encourage any specific behavior?

Is there a way that a uh property owner can save money on their property tax by taking behavior, uh by taking specific action?

Uh council council president, council member miller.

There are some things people can do um depending on where they qualify for some of the programs.

Um so they can apply for certain programs depending on if they qualify.

Um, but arguably some of what they can do is contact you.

Okay.

And so uh comparatively, if we were to implement a franchise fee that's based on use of energy, it's fair to say, right, that that could incentivize people to conserve energy.

He's asking for their agreement.

Fair to say.

Uh is that a point of information?

Uh point.

Well, I'll just say that uh I I'll state it as an opinion of my own is that a fee that's based on usage, and in my opinion might offer some encouragement of how people are using less energy.

And I in my own case, uh I live in a house that was built in the 1930s.

I have a small part on the northern side of my house where the snow melts first.

I know there's heat leaking through there.

I have asked contractor after contractor after contractor how to fix it.

And there are some elaborate solutions.

So the other part of this, and just make a point of and scoping out the reason for this program in my view is that we don't have current capacity for helping homeowners in a situation like mine or others who would prefer prefer to keep the heat inside of their homes, whether they're electric or gas heat generation.

And I think a program like this perhaps adds some uh economic development contractor capacity to build out programs to better support homeowners for saving money, for using less energy, for just keeping their houses more comfortable.

And I know many residents in my neighborhood and in my district live in older homes, and I've heard from people even recently talking about how when they had children um the upper bedroom was 50 degrees consistently throughout the winter.

And again, I think as a parent, it's fair to say that many people wish that there were programs that helped cut keep their children warmer in their house, more comfortable.

And so I think having a a conversation with the community about the programs that could exist through this is is great engagement strategy and that better informs not the initial reaction to uh mention of a new fee, but understanding what those trade-offs might be.

And so I'm I'm grateful that we have a scoped out process to do engagement.

And um I I look forward to learning more about the community's uh informed opinion after you do engagement.

Councilmember Palmer Well, Mr.

Miller, I I owned a house built in 1947 and I used to conserve and save, and I use the the um natural gas companies program to um keep my house's heat in the house, and it was very effective.

Um I don't think that they they are lacking the um knowledge to do that.

Um so I'm a little confused on that.

But um people are struggling in and for us to say that we're gonna add another fee to them, um which we need to try to keep everything in a living affordable.

And the people who are in the lower um income level there, they're having troubles.

And and I don't think adding more fees to it.

The one thing I dislike about what we do surveys in Rochester is is we say, would you like a new Cadillac, but we don't tell them what the cost of that Cadillac is going to be.

Um everybody wants to save this, but they don't know what the cost is, and we kind of hide that.

And then somebody says, well, five dollars isn't much.

Um it is to a lot of people.

And and you know, uh I think Mr.

Frederick said it, you know, you had five here and five here, five here, and pretty soon you're talking, you know, a haircut.

And uh that's important uh to that uh we can spend our money wisely.

Um and so I'm totally against adding this franchise fee.

I was in the very beginning in favor of it if we were gonna lower the property tax with it, but we're not.

And so I think spending any time with the staff on this, um it should end today, and uh we not talk about this for another five or eight, ten years.

Thank you, council member.

Uh I what I would say one, I I really commend you on moving forward with the community engagement uh process.

And I look forward to seeing robust feedback both on the fee as well as uh the uses of uh potential uses of the fee.

I guess where I'm looking for more uh framework, more kind of structure is uh what are the goals, what are the objectives, and what are we going to be measuring progress to goals?

I think if we're going to be going to the community and say, you know, we're we call it what you will, we're we're uh we're uh asking for a franchise fee.

I think understanding what it's going for, how it is uh going to be of value to the community, whether it is uh uh potential cost reduction or or uh reducing the our carbon footprint or uh so I think uh I'd like you to go back while the the community engagement is happening and really build that framework on how you want us to help prioritize what those 50 percent community projects are and uh 50 percent organizational projects.

Thank you, Council President.

I think coming back in April with some fleshed out uh performance metrics, um performance indicators is is a reasonable ask for our proposal.

Yeah, great.

Uh council member Palmer.

Mr.

Schubring, I don't not hearing four people in favor of this project.

I think there's four people who wanted to stop today uh I uh I'm one of our people can raise their hand if they want or however you want to make the uh uh okay.

Uh uh I would say I'm in favor of moving it forward.

Uh I've heard from I believe three colleagues of mine that want to move it forward.

I'm seeing it not.

So I think we've got four.

Do you want to vote?

Um I'm taking a shaking head.

Administrator's Elms.

Um, Council President, you you would typically not well, I would not recommend that you take a vote in a study session because the the community hasn't been informed that there would be a vote taken, but I would just want to also clarify that what you're moving forward is additional engagement, not approving a national gas natural gas franchise fee.

And I think that the staff, and maybe they were already gonna work on this.

I would guess they were.

Um, also heard a lot of um requests for additional information on top of community engagement.

Like, is this considered generally a regressive tax, depending on how you deploy it, and um information about our housing stock and things of that information about how you might actually um utilize funds if it were to move forward.

So just to clarify, you're not approving a natural grass franchise fee um by allowing the community engagement to move forward.

So I just wanted to make that clear in case it wasn't.

Councilmember Keene.

Yeah, I there's nothing about this discussion that surprises me.

I've talked to public works about this.

This is sort of where it was um going back to what City Administrative Zelms is saying.

Some of my questions about does the engagement include gathering information if this is acceptable to the community, is important to me.

Um, but the and then the scoping of of what it is is important.

So yeah, I I feel like I am here approving after discussion and after interaction.

Um, and again, I I think these kinds of discussions shape how the staff will address this.

Councilmember Fredericks.

Thank you.

Here's my fear with it.

A lot of people don't pay attention to the the things the way they should.

It's just the reality, but they're busy working, they're busy raising their families, they're busy with all the affairs of their life.

And when they start paying attention is when the bill shows up.

And we can do all the studies, ask all the questions, do all the things.

And the reality is, is my fear is is a lot of people just don't pay attention until it hits them in the wallet.

Thank you, council member.

Part of your job is to make sure they pay attention.

So work hard on that community engagement, get the message out, and we here can help uh uh when it comes to forums and neighborhood events that uh you'll be holding over the next three months.

Thank you.

Council president, if I can't quickly, I was gonna say we've we've done everything we can at this point to try and engage in the best ways that we can and get as much input as we can.

But yep.

Um we're going out of our way to try and make sure that we don't leave anything on the table as far as engagement goes.

So um I do want to be clear.

I think our staff and and our and our people within our city do a great job of it.

What I'm saying is a former non-council member, you didn't pay attention until what the heck's this?

Then you realize I should have been paying attention a year ago.

So I'm just being honest.

They don't pay attention until they're hit with it.

Thank you, councilmember.

Thank you.

Thank you for the input.

We are now moving on to destination medical center 20-year development plan update.

Ms.

Steinhauser.

Yes, thank you, Council President Schubert.

I'll just stay here because my role is very brief.

Um, you're going to be hearing from our partners at DMC.

Um, as you know, DMC legislation required a 20-year plan be prepared, and that plan needs to be updated and reaffirmed every five years.

And so that is what our partners are here today to do is to um uh bring forward uh work that they've been doing since the conversation we had with you in August related to the um work around the update of the plan.

Again, no action tonight.

This is really meant to be a conversation to inform what should happen with the plan, and we'll be coming back for action um at a council meeting after the first of the year.

And with that, I'll turn it over to uh executive director Patrick Seab.

Mr.

C.

Thank you.

Thank you, uh Mr.

Chair, members of City Council, Mayor.

Cindy, thank you for that introduction.

I'll be joined during this presentation by my colleague Catherine Malmberg, whom you've met along the way.

We are pleased to be back in front of you today.

Do I drive this?

Um we are pleased to be back with you again today.

Um we left off having a conversation back in August with this group when we talked about this notion of what makes Rochester special and unique and distinct from any other city in the country.

And we likened it to this idea that if you wanted to be a country music star or um are a fan of country music stars, you'd probably move to Nashville.

And if you wanted to be a film producer or write movies or bump you know shoulders with movie stars, you might move to Los Angeles or Hollywood.

If you were a car engineer and you wanted to be involved in the building and design of automobiles, you might choose Detroit or Silicon Valley in today's world.

But if you want to be in America's City for Health, a city where you can uh get the best best health care, where you can live a healthy life, where you can uh practice your craft or your trade, where you can invent and innovate, you might you would choose Rochester.

And we organized this presentation around these three themes that you heard and talked about, and we left that meeting in August feeling a lot of affirmation around these themes.

Um, health innovation as an economic engine, health excellence as an attractor, and health in the built environment.

I felt a lot of enthusiasm.

We talked about it at our annual meeting in September.

Um, but I'm gonna forewarn you there's been some evolution.

So as much as you've all practiced and uh committed to this set of language as we continued our community engagement.

Uh, we've heard some feedback around evolving these, but rest assured they really um reflect the same uh set of themes that um that we talked about in August.

Um before I invite Catherine up to give an update to the work that's progressed since August, I just want to do the boring stuff, which is to remind people, and I know you all know all of this, but some people paying attention or listening to City Council might not necessarily remember the the birth story, the origin story of Destination Medical Center, and a little bit about how it functions.

So bear with me as I walk through a couple of slides just as uh as a reminder and and table setting.

So DMC was formed out of this idea that uh Rochester was a world uh an environment for world-class experience with healthcare, and we needed the capacity for the city to grow alongside um Mayo Clinic.

We set a set of goals, targets over a 20-year plan, um, and very ambitious targets around capital investment, pri uh uh uh uh net tax revenue, um, new job growth, um uh creating an ecosystem of planning documents that ensured that it wasn't only one organization who was really involved in shaping and planning, and then ultimately improving the experience that people have in Rochester.

We also developed a uh governance model that ensured checks and balances and ensured um the right responsibilities and roles, including how does the state of Minnesota influence its commitment, how does the city of Rochester retain control of local decisions?

Uh funding formula that reflected that this the commitment by the state, by the city and and Olmstead County would stimulate and and uh catalyze private investment, and it's a measure of that private investment that would release further public investment funds.

But ultimately, those public investment funds would support community development, jobs and and public infrastructure and and uh and um uh small business support.

So providing community benefit at the local level in addition to the the uh growth of the economy.

The state law that enabled destination medical center said that the development plan needed to be updated every five years.

And it happens to make good sense that we would keep our uh our development plan up to date.

And the this the state law has specifications about what should be included in the development plan, and you'll find that we this work in progress will include all of those required elements.

But it goes beyond that in thinking about how we can invest in and shape our city going forward.

So we're here today as we've continued this process of updating this development plan, knowing that we're um there's several more stages to come, including this conversation, including additional conversation in the community, um, action ultimately by um by you before it comes to DMC in February.

And um before I turn it over to Catherine, I'm gonna just skip ahead uh a few slides because I want you to I want a little awkward here, but um you've now seen the whole presentation.

Um but as as we are walking through this presentation, know that you all just got it in writing a week ago.

We don't expect that you have necessarily read it all or digested it all.

We know there's a lot more community conversation to be had, but we would like you to be thinking about how does this uh how does how do you feel this interfaces with your strategic priorities that you have been developing?

Um are there places that we could be strengthening the plan?

Are there community groups or organizations that should be more involved?

And how do we ensure alignment with other priorities?

So just as Catherine walks through this, these are some of the questions that can you hold one minute, Mr.

Steve uh Siebe.

Uh Councilmember Palmer.

Yes.

I didn't mean to interrupt you, but but in today's Minneapolis paper, um, and I'm gonna read it here.

It says that uh the uh rapid growth has spurred outsized property values, an increase in taxes to make it too expensive for some retailers in Rochester.

How do you how do you answer them to say DMC is really helping you and this is what we've done?

Well, I think that is uh needs to be a shared message.

And uh that's their message, so well, and I appreciate your message in asking the question because I do think that I'm sorry, Councilman.

Go ahead, President.

Mr.

Supreme Councilmember uh Palmer, uh it is um it is very much the fact that Rochester is going through an exp explosive growth.

I mean, and by any definition, we are going through explosive growth.

And some of that is being felt in the construction disruption that people are experiencing, and some of it is being felt in the property valuation that is occurring.

And we have to work together to mitigate all of those.

So, in that article, if you go further in the article, it talks about a program that has been created around pop-up retail and led by the RDA and something that DMC has been very involved with in supporting, creating new ways for retailers to get into the bricks and mortar space and ultimately hoping to um find success so that they become could become uh long-term brick and mortar retailers.

But in that article, it's a it's a temporary four-month commitment, and and we're gonna try something in.

And that's a small part of it.

But if I'm an existing business partner downtown, that's that's where my worry is.

Yes, you know, on that.

The other one is is that we had met with the um UMR um Chancellor, and I asked her the simple question of what students want, what do parents want, and in security is is number one in their opinion.

And and um I found that to be um interesting to hear that.

How is DMC helping us out with our security in Rochester?

Yeah, I uh council President Schubering, Councilmember.

Is that part of your presentation at all?

If if it is, we can get to that when it's in your presentation.

Um it's not necessarily in the presentation, so I mean I I'm happy to try to respond.

Okay, go ahead.

I I I would say that our role with respect to ensuring a secure downtown is creating a more vibrant downtown.

More people living in the downtown, more people working in the downtown, more people using the downtown creates, I think an environment where people generally feel more feel safe, and there is uh this kind of eyes on the street kind of experience where you know that safety and numbers.

And that's been my experience.

And and I'm I support DMC as you always know, but it these are just questions that I get asked, and I did go through your report, so I do have a lot of questions to ask as the as the uh program goes on.

So I'm shocked to I appreciate your shocked.

Ms.

Steinhauser.

Council President Schubring, members of the council.

I just want to build off of that.

The other, I think important role that uh DMC plays in navigating the issue around safety in downtown, is they are the um partner that convenes the downtown task force, which is made up of all of our partners, and it came out of it started out of COVID, but it continues to this day.

And it came out of, it started out of COVID, but it continues to this day.

And you recall from the downtown task force report, there were a list of recommendations, including public safety and security.

And we continue to meet once a month and talk through all of these kinds of issues and say who's the partner that should take the lead role and what are the what are we hearing on the street?

And so I think it's important to acknowledge that they are the keeper of managing that downtown task force that brings all the partners together.

Thank you.

Council President We are prepared to go into a uh more formal presentation, but we are really looking forward to and welcome the conversation.

So to the extent that uh you would give us a moment to try to walk through this as a table setting, but we really are very interested in the in the conversation and engagement.

Sounds good, thank you.

Happy to uh we're happy to respond to any questions in flight.

But Catherine, I'll let you take the lead.

Great.

Thank you so much, Council President, members of the council, mayor.

Um really excited to be at this point in this process in this journey with you all.

And I'm gonna just use a few minutes here to do as Patrick mentioned, kind of a navigation of the document, because um I did my best to keep it as concise as possible, but it's still 178 pages.

So want to help orient what we have in there and help unpack it a little bit, both for you all and the broader audience that might be listening.

Um, and then as Patrick mentioned, really excited to start to hear what questions and um comments are coming to mind.

Um, so this is our overall timeline, hopefully looking uh familiar from past presentations, circling there where we've been in front of council specifically, and the um star indicating where we are today in that process.

Um, but also just continuing to emphasize that this is not a process that's happening in isolation.

It's really in close coordination with both the our city colleagues and also all of the other planning efforts that are going on in the community and have been going on over the past decade as DMC has evolved over time.

Um in May, we had completed uh the look back portion of the work, and there was a bunch of data that came out that um you know led to some insights, and this is again the highest level kind of measurement against those five major goals that um were part of the founding of the DMC.

Um we have taken that and visualize that more, sort of connected what those numbers might look like in the downtown when you're looking in the downtown, and we're gonna continue to develop this series of maps.

There's a bunch of maps in the document, but digitally, I think there's some really cool and fun opportunities to bring these to life as we continue to develop the work.

Um so you'll see those in there.

This is that sort of weaving together of all of those other key plans that this is um continuing to build off of and and pulling themes out of.

You'll see a whole section in the document that tries to very specifically go into those plans and show where those alignments might be found with the strategies that we're proposing going forward.

Um, and I think that's a great sort of community vision alignment portion of the update.

We've also, of course, kept in mind this city council's priorities and principles as we move forward, and I'm hoping that the conversation will help us find those common ground and also those questions that you want us to dig in more deeply on those fronts.

Um, we have been pretty intensely involved in engagement activities over um the course of 2025 and really continued to build on those um plan alignment review themes that surfaced and that we heard that you know really resonated when we were before you in August.

Getting us back to this idea that at this moment, you know, we in 2015 with the original development plan, the um strategic priorities were geographically based.

These were the first target areas, heart of the city, discovery square, and transportation.

By 2020, we had the opportunity to refine those priorities, and it really came out as kind of doubling down on that discovery square as the economic engine.

Um now instead of just transportation, we had all of the integrated transit studies and um some prototypes and the BRT corridor was defined.

Um we had the identification of the riverfront and small business support as other key priorities, and that brings us to where we are today, where we're talking about how are we at this moment, halfway through this 20-year period saying, how do we be bold?

How do we evolve from America City for Health not just as a tagline, but really using it as that generative competitive strategy for Rochester?

And so this is what Patrick was alluding to earlier.

Through many, many community conversations and stakeholder conversations, we've evolved the language that we're using to talk about those strategies a bit, but the strategies remain the same.

So we're saying accelerate health innovation, design for well-being, and drive purposeful growth as those strategic priorities.

So how does that fit?

Oop.

There we go.

Um, within the sort of funnel that uh explains how DMC works.

So at the top there, you have those five major goals, right?

That are foundational that aren't changing.

Then those are shaped.

How do we do that?

Through the eight guiding principles that are also part of the original DMC development plan.

Those are the same, aren't changing.

Um now we're talking about that next tranche there, where it's about what are those strategic priorities that enable us to shape those annual commitments around capital improvement investments or our work plan and our operating budgets, our programs, processes.

Um, and so what we're talking about in this update are really um about accelerating health innovation, design for well-being, driving purposeful growth as those um strategic priorities looking forward.

So here they are presented in the similar way is where we left off in August, but with the sort of new, hopefully more accessible language and terminology, the way we're talking about these three um strategic priorities.

So this is what the document looks like.

It is available online as well as in print, both here at the city and at the DMC offices for people to review, provide input and feedback.

Um it's a continuation and evolution of what was in the original plan.

Um it comes to city council first, so that's what um Deputy Administrator Steinhauser was saying.

Um in January, we'll be back in front of you all.

Um, and then it goes to the DMCC board after that.

Um, there are no specific projects that are in that um in this document, right?

It's a strategic framework to guide investment going forward.

Um, so it's organized around these three major chapters.

One is um stage setting, providing that context, and who our key uh partners are, how we work.

Um the second section is kind of a snapshot of where we are today.

Um we have some good demographic data in there.

We talk about the change that we can see, whether that's capacity building, new buildings, et cetera.

Um we talk about each of the eight core areas that were outlined in the enabling legislation, whether that's research and technology or hospitality, um, and kind of what has happened in each of those sectors.

And then we get into that plan alignment with the other planning initiatives.

And then in the final chapter, um, it's talking about tomorrow, uh outlines where we are, this very critical inflection point in Rochester's history.

Um, and then it dives deeper into each of those three strategies and ends with sort of a vision for looking forward and what um you know is to come in terms of implementation.

Um a little primer on how we did some of our economic impact analysis is this idea that in many different ways we can sort of take the past history and project a historical trend line of you know, if we if things continue in the future as they have in the past, this is the path or the journey that we would be on.

And what we're really interested in are what are those key interventions that could help drive that growth curve above that historical trend line.

And so we looked at various industries and what those industries are projected to do uh in the future to help identify uh different inner potential interventions that might look like vertical development or horizontal investments in infrastructure or policies or programs.

Um, and so that's how we did uh our economic impact analysis.

And there we go, back to the questions.

And so now I think we could launch into hopefully some good um conversation.

I have the milestones just to remind everyone of what comes ahead.

But uh Councilmember Miller.

Thank you so much for the presentation.

I I guess uh just as a as I've been reading this the last few uh days and returning from NLC is thinking about some forward-looking cities and a lot of aspirational presentations.

Some of the things I really appreciate is I I think this uh update gives us some context for where we are in the midst of construction and almost gives us a lens to look through that next five-year period of very intensive construction and see what we might get to on the other side.

So I appreciate the bringing in the alignment with our other plans, our comprehensive plan and others, and really helping us as policymakers tie these all together because there are a lot of plans.

And I think that this is a good time for us to see where these give us a unified direction forward.

And I think one of the key challenges that we face in all settings, but particularly in something as broad as this is how we communicate effectively.

And I'm I'm glad to see in this uh broader packet, new tools or an update looking at tax capacity, the value per acre, helping us communicate how the DMC district impacts the broader context of our community, um rising property values for one, and and where that's happening and and what the triggers of that are and what some of the the factors might be that are reducing that trend line.

And I'm really looking forward to having a more thorough conversation about that next year when that's presented to us.

And I also see in this this uh report a real contemplation of the community um more so than maybe in past updates.

And I I I appreciate that that is something that's come through from our discussion in May, um, and even a plan that's come through since with the Cutsky Park engagement, thinking about the impacts to the residential areas adjacent to this downtown development in and next to the DMC.

And I represent many areas that are being impacted.

And I I wonder how this plan also looks to strategies to maintain the the community's needs.

There's a mention of authentic character of Rochester, but I think some of these neighborhoods particularly and um we learned about some programs in um Salt Lake City as well, National League of Cities looking at anti-displacement strategies and making sure that we have key programs in place that help people afford to stay in their homes and enjoy the amenities being near downtown or connected to the transportation access to downtown or elsewhere in the community.

But also as we increase the number of rental units looking at programs that help people build equity, especially even as they're renting, uh, how rental uh home choice might be a pathway to economic stability as well.

And I think there's some really interesting programs that we heard about there, and I'm sure that there are other other cities, but Salt Lake City was the host and got to highlight a lot of the innovative things that they're doing of creating housing nonprofit models that reinvest in the the tenants and provide some loan programs and also equity that they can take to purchase a home or just save for other needs.

So I wonder how we continue to really focus the community in this.

It's very exciting to see the economic opportunity that comes out of this, particularly for Mayo Clinic and what we do for access to the best healthcare in the world and how we drive innovation.

But I'm really glad to see that design for well-being and focus on the community is part of this.

And to the earlier question about who are key partners or stakeholders, I think the students and council member Palmer alluded to the or asked this directly as well.

But I'd just say I think the student voice as a unique uh stakeholder of the downtown who's very different than a downtown employee or downtown resident, just in that.

They are at a different stage of of life and career, and I think have a unique set of needs.

So I was glad to hear safety, and I I have also heard from uh the chancellor that access to recreation and transportation are key needs in that population, not to mention affordable housing and access to businesses that are perhaps lower cost or even no cost for them to spend time and study and collaborate with their peers.

So those are some initial comments based on the and I look forward to the discussion.

Thank you.

Councilmember Palmer.

Thank you.

On page 24 of your report, it says policies to incentivize new development and foster targeted sector growth.

So my question is about home ownership in how do we get ownership, kind of what what um Mr.

Miller was kind of talking about.

So we have the Maxwell study on page 155.

And it's the first time Olmsted County has risen more than the greater 16 County metro area.

And in the Maxwell study on page 46, it says a home ownership fell from 71% to 64% due to the large number of rentals.

And in the DMC area, it says 84% of the households are rental, and 68% of people live by themselves.

So again, Maxwell study page 52, the Federal Reserve average homeowner net worth, if you own a home, it's 40 and a half times greater than that if you're a renter.

And in basically your net worth for the Federal Reserve says it's 296,000 of your net worth if you own a home, and it's 10,000 if you're a renter.

So there's a disparity there.

So really what I'm asking is I don't see anything in the DMC plan to increase ownership like condominiums in in row houses.

And I think the DMC is really one of these agencies that can say, let's do some condominiums.

I know that there's some difficulty from, but how do we how do we get over that hurdle?

And in how can we do roll houses so we use better use of our land?

Um so uh why is home ownership not more in in your um plan?

Right.

Go ahead.

Yep.

Yes.

Um so we have uh to date one small prototype project um that we are expecting to get underway.

Uh Josh uh Johnson at the city has been our key partner in the um development that is scheduled to happen on 2nd Street, um, brought forward by the Jura Development uh group, and that contains a partnership with First Homes for a four-unit uh workforce for sale uh project.

So that would be the first for sale um project that DMC has participated, and we our participation is based on we're also connecting the uh mid-block public pedestrian infrastructure through that block to sort of chop up that super block, and then um the value of the land beneath that prototype project to help keep those costs down for that workforce for sale housing prototype.

So that's one way in which DMC is working to help test something, even if it's starting small right now to see if that's a successful partnership and project.

Um, that would not be possible without the leadership of you know private sector developer coming in and being willing to do it, the not-for-profit partner that is first homes, and kind of all of us working together with the city and DMC to try to get that project to happen.

Um, another challenge we face in the DMC district is um because it is a denser area of the downtown, most ownership options would be condo minium sort of structures, and there are some state level challenges with the tail of liability that make it not very enticing for investors and contractors and developers and even architects to uh design for sale housing right now, and that's a broader statewide issue, and we're in conversation with other um communities across the state to see if there are ways that we could work together at a statewide level to maybe um advocate for some change in the way that that structure works, because that's something we don't have a lot of local control over.

Um at the same time, we also have one of the tools that we use is we have an annual developer-investor conference where we try to convene people interested in doing development, and we've talked about maybe there has been growing um, you know, this isn't the first time I'm hearing about this need and this demand for you know for sale housing in the downtown.

Um, so maybe that's a potential topic to sort of focus um some of these larger convenings where we bring people together to try and see if we can figure out ways to cultivate more interest in developing multi-unit for sale housing in the downtown.

But I don't see that in your plan.

And in if this is discussion about this is a discussion about your plan, it's nice to have a story that we have four units coming, and this is what we we're we're aware of.

That I'm looking at a thousand home ownership um uh a year that we need to be filling.

How do we do that?

How do we get equity into the rental spot?

So that's that's one of my questions.

Um on page 32 of your report, there's no mention really of UMR sales tax that brought UMR to Rochester.

It almost sounds like the DMC brought UMR to Rochester.

Um we all agree that UMR is a big asset to Rochester and so is DMC, but I didn't I didn't see that the investment that the citizens of Rochester made to get UMR to come to Rochester.

Basically the only city in the state that's done that.

And so I think that's a big thing.

The other thing that's not in there is is RCTC's vital role in Rochester.

On page 32, I did not see that.

Um, you know, they own some property south of 6th Street.

Um, I would hope that they would would would uh move that to the downtown area because I think it's great to see the citizens or the kids down there, I should say students down there and see that with some empty blocks that would be a nice a nice one.

Um on page 120, you talk about sports and sparks compliments.

Um, you know, we've got the sports complex coming.

I know it's not in the DMC area, but think of the asset that that is for us that you know during the week we're full of our hotels, we have great uh hospitality, we have great restaurants, but now on the weekends, how do how do we work with that?

Because this last week we just had a uh basketball group that I think almost every hotel room was full in Rochester and in the restaurants I were at was was not there.

Um page 125, you have um TIFF for hotels, I believe.

The city of Rochester doesn't give TIFF money to hotels.

Is that a that's a difference from from the DMC?

I'm assuming the DMC is still tiffing hotels.

Well, that policy direction is set by our board, and it's not something that's in our current set of priorities, but it was historically since the beginning of DMC.

So there was earlier in DMC's.

So it's no longer a priority.

It's not one of the current priorities.

And I'm almost done, so be patient.

Um the other thing on page 137, you talk about the mixed use on the main floor in it.

And my problem with it is that we have like the Maven and five or six other ones that we've made them put this, the brick is another one that we made them put retail on the main floor, and it sits empty.

And in how do we rethink that plan?

How do we incentivize getting um people into those businesses down there?

Um again, it's I know it's hard to do, but but I think that that's one of those areas when I walk by a storefront and it's empty, empty and empty, it's just not inviting.

Um so that was that.

Um the the other one I'll bring up is is on 171, you talk about the Kutsky tree cap canopy.

DMC area is not really much of a Kutsky Park.

And so I was surprised to read that.

But if you're rebuilding the roads that are heading that direction, and it says you're gonna save trees, which is the tree canopy, uh on Center Street, we're losing on 68 trees.

That's a lot of trees to lose.

And if in Cusky Park, they're talking about burying the power lines, which is going to take out even more trees.

And and I don't know if the homeowners know if they bear the cost on that.

Now that might not be a DMC issue, but you did put it on your page 171.

My last page was page four.

And that's the tax revenue that you have.

You have 1.6 billion dollars in tax revenue, 136 million in property tax.

The question I have, and if you could break that down for me later on, is how much of that is the city portion of the property tax, and how much of that is um um was was here before DMC arrived?

And then do you have the how much is currently in TIFF?

Because the problem we have is we put these these TIFF projects out there, we're not actually getting any new property tax for another 10 to 15, 20 years.

How much of that is tied up and when do we start seeing some of the DMC TIFF areas come onto the property tax to help out pay for things in Rochester?

So I appreciate your patience.

I appreciate everything that you guys do.

I I'm trying to be respectful on my questions.

Um, but it was an interesting report.

Um, I enjoyed reading it.

Um it took me a couple days.

Um, and so I appreciate your patience.

Thank you.

Thank you so much for all those comments.

Yes, very helpful.

Thank you, Councilmember.

Anything that you want to respond to from Councilmember Palmer?

Yes, I will note on that last um comment about the that is net new tax revenues there, and we do have significant amount of uh additional data.

So what I'm hearing is next time we're in front of you, you'd like a little bit more of a deep dive into that, and um happy to do so.

Yep.

Councilmember Doring.

Yeah, I uh I appreciate uh the strong leadership of the DMC team uh that that worked diligently to put this report together.

Uh just uh I have a technical question, then a kind of a philosophical question.

Uh the first is the technical question how large is the metropolitan Rochester metropolitan statistical area that you reference.

Um is that Rochester proper proper?

Is that how far does that spread into the county?

How are what are you using for your metric for that statistic?

Sure, yeah, and that is um not defined by us, but defined by the bodies that um draw those lines and the population.

What I could tell you right now is the population is about 240,000 of the MSA.

Um I can get back to you with the exact geographic line of, but that obviously I think encompasses um some of the surrounding communities outside the Rochester boundaries.

Yeah, it that might just be helpful in the key that you have as you describe those charts to include uh that uh definition.

Um again, I started by saying that I appreciate the strong leadership of the uh DMC uh team.

I believe an aspect of strong leadership is humility, and I didn't see a lot of humility in the document.

So I would love to see uh some areas where uh DMC made a mistake or two, uh, where there was a failure or a prototype that didn't work, how lessons learned from those things, and how that how that caused a pivot into where we're heading into the future.

Um I think those are important things for our community to hear.

Um, that we are trying, that we are innovating.

Um and with innovation, um attempts are made.

We learn from that innovation, um, and we proceed in a different way after those learnings.

So uh I would I would love to see some of that in future iterations of uh these kinds of documents.

Great, thank you.

Yeah, council member Keene.

Ah, thanks.

And um I just want to start out by saying, like uh the uh EDA team invited some of us, I think most of us in early on to kind of like before this document was there in that preparation.

And um, I I want to thank you for that.

It's kind of an interesting step back because you know you get caught up in a cost overrun or a schedule change.

But when you sit back and look at the 10 years back and the 10 years forward, it does create a different like uh motif for how for how we're looking at this.

Uh when I think back to 10 years ago, I think of the kind of the seven different zones, and then talking about uh discovery um and hospitality were the key early on things.

Um I probably wasn't attuned that transportation was in there already, but to me, transportation came a little later and is really a major focus.

But that as we switch those focuses, it's interesting.

Um it's interesting to watch.

And and I you almost need that 10 year view to kind of realize how some of those are working.

Um so that that bigger picture is helpful, and I think it does help us like put into better focus what DMC is and what it is not.

And I and I do want to talk about that a little bit.

Um in the new plan, I I really do like some of this idea of the health excellence drivers uh and that idea of like um how this specifically applies to our community, and I should say our economic community, but also the people who live here.

Um, that idea of uh America's city for health.

I do it's sort of like it comes natural to me when I think health innovation is an economic driver.

Um I think I have a good view when I hear health excellence as an attractor and that idea of like how do we draw people here.

I I have less of a little more of a murky feeling when I hear health and the built environment and how the DMC EDA and how the city comes to bear on that.

Um, just in terms of what is the unique aspect of health in the built environment.

Thank you.

That's the helpful feedback.

And that is a little bit while we're trying to evolve some of the language that we use too and shifting more towards talking about um how do we design for well-being and ensure that the um sort of clarity, we can continue to develop that as we um as we evolve the document and uh you know, recognizing that the city is really our key partner in that one specifically.

It's it's really how are we making these um decisions around our infrastructure investments, um, as well as what we're asking of private developers that might come in.

Um, but that one's a uh kind of very very focused one.

It has to do with how we are um making choices about the infrastructure investments and I realize this isn't like a project document, so I'm not looking at that level deal, but I I I do, I mean, I actually do struggle some of that within the built environment because as a city, we are a built environment, and I want to make I want to you know be more aware of those if there's things that we need to be changing as we as we talk about that.

I I do want to just do my take on some of these things and like when I think right now, even our language right now, but mostly in the community is what is DMC and what it's not.

Um and uh DMC is a partner of the city, and it the DMC, DMC corporation is one thing.

The DMC EDA is a different thing.

Um I still kind of smile when people say that's a DMC project or not.

Everything is a city project, and may and the funding sources are different, and many times they come from uh DMC funding, but they are the partner that helps fund things for the city.

Uh, and I try to keep that in mind.

Um I also think like the state of Minnesota is the big winner when it comes to, you know, why DMC is funded and what the state gets out of it in terms of when you're measuring by tax collection.

Uh the state also gets this wonderful health care right here in our own community.

Um and uh I think those are very valuable things for the state and why they're in control or they're investing in our in our community.

The city also uh is one of the, you know, it becomes this great benefactor by um having both the this growth that's going on right now, but also this idea of having this health center uh right in our community.

Um I think one thing that's lost a lot is um that there are benefits to people like me too, who have no connection to Mayo Clinic for jobs or for kids' jobs or anything like that.

That um I I mean I get to have this sort of health care locally that's much better than anywhere else in the world.

But more than that, I can watch the economics grow in such that when um when someone's gonna open a new um uh auto repair shop, they don't want to open it like 20, 30 miles away from here.

The economic engine right now is Rochester, and they're coming here.

And I think that's because of the growth we're providing.

Um, and I hopefully that's a good growth.

Um, but one of the attractor things that I'm really pleased with when I think of people looking to come to Rochester is that you've got Rochester as a city, but you've got these townships, which is many people want to live in.

You've got these small towns close by, you've got all these different like um options in terms of schools, in terms of types of living.

You've got all these different like options in terms of schools, in terms of types of living.

And I don't know of any city that, you know, even the twin cities, I can't find that in those same ways.

So I think it is an attractor for us.

Um I I want to continue to work through this.

I think of DMC as a force for good.

I know we'll have our our our debates on when I can invest in this and where I can invest in that.

But when I look at it and and the kind of the forethought that we bring to our streetscapes in that, I appreciate it and I hope we can continue forward.

Councilmember Wall.

Thank you.

I really did appreciate the maps, the color coding, the past, present future, uh, the illustrations, I think that really helped uh put life to the many words that are so thank you for doing that.

That uh helps break up uh all kinds of pages, pages of good information.

Uh I was going to go down really kind of the same road that Mr.

Keene uh has done.

Uh when I first started uh campaigning, uh a lot of what I heard uh was when I bring up uh uh DMC or Mayo is why are we spending all this money downtown?

And uh of course the answer is it's the legislation.

Uh I think it's implicit, but not explicit within the document, the great benefit that this is to uh the state of Rochester, to the Southeastern Minnesota region, to and especially because we answer to Rochester taxpayers to the citizens of Rochester.

If we could be really explicit to say uh uh and here's how the entire city is strengthened because of these uh uh this one square mile downtown that is stronger.

I'll give you an example, and I'm making this up because it's not true.

Uh if Biolabs uh decides to spin off a company and they uh reside in ward three, I mean that that's a specific uh that will help uh the ward that I come from.

But even if they go to uh ward one, it's going to help all of Rochester by uh establishing this uh new tentacle of health growth.

Uh and so uh the more that we can do to interpret this as a citywide, one could say region wide or statewide uh program.

Uh I think that we are uh going to be better off in the long run so that we all own this program rather than those people downtown.

Actually, thank you.

Thank you, Councilmember.

Uh Councilmember Miller.

Sure.

Just a couple of questions.

Uh how might this document change before it comes to us later?

And one area I'm specifically looking for a little bit more in is the success metrics.

I feel very high level.

Um would we expect a more defined set of measurable uh submetrics within each of those areas?

Sure.

Um so there are a number of ways where I could see there being kind of supplement.

First off, there are the unpredictable ways, right?

We're out having these conversations now or hearing what people are interested in, and you know, trying to um respond to that.

Um that's a bit unpredictable.

But um, in terms of uh what we know we have, there is a sort of next level of analysis that we would anticipate would be found in the appendix when we come back.

Um, you know, not wanting to put too much into the main body of the document to make it still as digestible as we could, but there is a lot of um additional um analysis and information that we could, I could see kind of navigating uh a set of appendices to get that level of detail if that is something that's um you know we're hearing interest around.

So I guess I'll just say I I would love a a bit more refinement in the language, and I I think drive our drive well-being or the the change from health in the built environment to a focus on well-being is is a good one, in my opinion.

I think it's easier to understand.

Uh but then I look at drive purposeful growth growth success metrics, improve housing ecosystem.

There are many ways we we have a supply issue, we have an affordability issue, we have a choice issue, a transportation-related issue.

What does that mean?

I guess and and perhaps that's defined in an appendix.

Perhaps it's a refinement of that goal.

Um, but it's hard for me to read these as metrics because I I'm not even sure how I would define them and even to measure them.

So I I would hope that that comes from a bit more analysis um and then refinement of the document.

Uh an opportunity, I feel like, uh, because that's asked here, alignment with other community initiatives.

We've had uh had on our bonding priorities and then removed it, redesign of Civic Center Drive and Broadway.

I think particularly the Broadway section that comes through the DMC district, in my mind is a real uh physical barrier to the connection of our downtown.

And I would wonder how this plan might reflect um that as part of the economic as developed for well-being, et cetera.

Personally, as one member of this council, I would love to see a focus on that.

And I know that's gonna be a multi-partner approach, but I I think it's a physical barrier to the full potential of our downtown.

And then relatedly, even though the DMC district uh houses residents, employees, it has a much broader impact, particularly in transportation, and I would think that ROCOG is a key partner, um, particularly in that trip generation to and from downtown.

Um, because you also in this plan talk about programs that are in exist in other areas, but we don't necessarily have a commuter program, a travel demand management program, and there are different stakeholders that likely need to be involved.

The city Mayo, ROCOG, and others, UMR.

And I would wonder how DMC might contemplate that with the transportation focus as well.

And then I I just put in a plug again.

I think uh so much of equity and building wealth has come up and acknowledging that many properties that are developed downtown are rental properties, how the coalition for Rochester Area Housing might be involved in looking at new models that allow renters to build equity, new new models of building ownership or participation.

And um the the one that I would just point to based on the National League of Cities is the perpetual housing fund that's in Utah and it's developing properties that are contemplating exactly these questions and how we might consider that model, learn from it, adapt it to the local context, because I I hear that over and over is a key priority.

And I and I just don't think that we have to have this distinction between if you rent, you cannot possibly build wealth in your housing.

I I think we have to be more innovative than that.

And I think that there are communities that are leading the way, and we should be one of those too.

Thank you.

Mayor Norton Thank you.

Um, first, I just wanna state how proud I am of our community and what DMC has been able to accomplish thus far.

Uh, with the pandemic right in the middle of the first 10 years.

And I think we need to remember that.

Sometimes I see things in the press, and I think people forgot there were a couple years in there where things stalled out and we're still coming out of that.

Um but this has given us an opportunity uh that I I don't we would not be here uh were it not for the DMC initiative.

Um and Mayo Clinic's involvement in that certainly is you know bringing the idea forward.

Um so a couple things, and I I know I'm gonna sound like a broken record to some of you, but we have new people on the board, so they get to hear my record maybe for the first time, but I'm gonna do it anyway.

Um first of all, to remember that the Destination Medical Center initiative was developed to use in the downtown area as defined by a number of different ways.

But there is a space where the money gets spent.

One of the reasons for this and for uh the development of this was to build the infrastructure for the future that all the growth and development that was going to occur could manage.

So it was about infrastructure, it was about growing out, and it was about our downtown.

And the reason, and and some of you may not know this, but the initial language that came forward was for the city to put in 28 million dollars.

The legislature changed it to 128 million dollars.

And through a lot of negotiation, we helped define how the city could spend that 128 million.

Where it would come from, not what it would be spent on, but where it would come from.

And so it frustrates me sometimes to hear um the the community's confusion about TIFF.

But that was one of the levers that allowed the city to manage to spend 128 million dollars that it had never budgeted for, right?

This was like surprise, here it is this year, and it was passed in three months or four months.

It was very quick.

And the city was not prepared for that.

TIFF is one way the city got to do that.

That 128 million can be TIFF funding.

And and the beauty of all this is it allowed the city to spend its budget that it plans to spend on the whole rest of the city.

And the DMC funds that the state was going to give us were focused downtown.

That was the benefit to the city of Rochester, and ultimately, as they knew, to not just the city of Rochester, but to the entire state in economic development.

And if you look at the numbers, Minnesota is the driver of economic development in the state of Minnesota.

And frankly, ours is better.

The numbers are better than most of the cities across the country.

So it is working, and we need to celebrate that it is working.

And we need to also inform the community about what DMC is doing and not let them blame everything that they get angry about on DMC because it really is building out the infrastructure in our downtown for the betterment of the community.

And they don't understand that.

And I know change is hard, right?

Change is hard, and there is a lot of change going on by private developer, private investors and private developers.

The city is just sort of along for the ride in some areas and paralleled with it in others, right?

But it is because of our growth and development that all this is happening.

So I just I wanted to make that clear.

And so it TIFF was given this increased ability for TIFF was gifted to the city as our way to come up with money that we didn't have to support this initiative so the legislature would approve it.

It's that it really is that simple.

It is also not hurting us because it was money that we never we never had, and we wouldn't have had were it not for the growth that DMC is helping us get.

So one do that.

I also am um two other issues I wanted to touch on.

One is safety.

I too have met with the two different groups of UMR students.

And there, and we've talked to the administration about this already, and I know some of you have too.

Safety is a concern for our residents and for young people living downtown.

But safety is not DMC's issue.

It is the city of Rochester's issue.

So let's be careful where we place the blame for safety or the responsibility for safety.

If you look, there were eight, it was about infrastructure.

DMC was about infrastructure, but there were eight areas that it meant, you know, it was meant to impact in the downtown area.

And safety, that's our job as the city.

So we I will tell you, we probably need to talk more about safety.

We need to talk to administration, we need to talk to the police department, we need to talk to the university and see what we need to do it.

But I'd be really careful on putting that on DMC's lap.

That's not their job.

And neither, frankly, and I know this will get me in a lot of hot water, is housing.

Um, that was never part of the discussion at the Capitol.

And I know because of the housing crisis, we started talking, not we as city of Rochester, we as the world started talking about housing as infrastructure.

But that was not the conversation at the Capitol.

I just want to be clear about that.

There's a lot of things that need to happen in Rochester and in the downtown area to take care of the growth.

So let's be careful that we don't spread ourselves so thin that we try to use DMC funds that were meant for sewers and roads and sidewalks and all the things that we need to do downtown to try to solve a problem that's a nationwide problem.

I mean, they're great partners for us.

I'll I will agree with that.

But let's not try to make that the cash cow for a problem that is bigger than ours.

So um that's a lot um to say.

But I get frustrated when we when I when I look at the comments, I should not do that.

I should just not do that.

But you look in the comments of news articles and papers, and every every day people blame DMC.

Every day.

And they they do not understand the benefits.

They only every time something doesn't feel good, it becomes a scapegoat.

And so I just wanted to lay this out here a little bit and have you help me inform the community about what DMC is and what DMC isn't.

And several of you had have made some excellent points already, and I appreciate those comments.

That's the end of my lecture.

Thank you, Mayor.

Uh, Councilmember Fredericks.

Thank you.

I think my colleagues about have it covered.

But I do want to say thank you to you and Patrick Siebe for your work for putting together this presentation tonight.

I did read through it, it's quite expansive.

So but to expand a little bit on what Mr.

Wall stated, uh, you are a large part of a of a positive worldwide impact.

You know, it isn't just on a local level, this is a worldwide impact, and it's really neat to be part of that as a city to not take our eye off that.

It's it's an amazing thing.

And and you guys are a huge part of that.

On a local level, I have witnessed you help uh large businesses, obviously, Mayo, several other businesses, developers, so to speak, that are doing great things in the downtown quarter, but I've also helped you or have also witnessed you help the smallest of businesses.

I've watched you uh help the affordable housing space for a fact.

I've witnessed that, and you've made a big impact in that space.

It doesn't get talked about much, but uh I'm here to tell you I've seen I've witnessed it on every level, and I believe you are covering your basis.

It's it's a great thing.

So thank you.

Thank you, council member.

Uh so from my perch, I mean, one congratulations uh at the 10-year mark.

And it's it's very uh interesting to see how DMC has evolved from uh it's almost the opposite of what uh a lot of uh new organizations do where uh you've you started with the infrastructure, bricks and mortar.

So we understood what it was, whether it's Discovery Square or uh Peace Plaza or uh or uh helping with the the pool at uh at Soldiers Field.

Um but now you're moving to these concepts, uh accelerate uh health innovation, design for well-being, drive purposeful growth.

And so part of my uh and maybe it's a I'll pose it as a question is how are you going to ensure that there is something that you're you're actually meeting those objectives through the use of the funds because they are concepts.

Sure.

And a little bit of this I think relates back to Councilmember Miller's question about those success metrics and how well we're defining those.

And so I'm hearing that we should come back with some of the back work that kind of defines those to a greater level of detail.

So that's a piece of it, right?

Like quantifying what we would expect to see.

How are we going to measure if we're accelerating health innovation, right?

And and um my colleague Mike Flynn and his team have a portfolio of work that they're doing around that.

And I think we could bring some some of that back to you next time that helps to define those things.

I also think what's really exciting about this time is the velocity at which projects are coming forward.

And so um I think the shift towards the strategic focus is allowing us to kind of use those as criteria when there are going to be a lot of competing interests and a lot coming before the city as you know, more and more new great ideas are coming forward.

Um, and it it allows us to adapt and be flexible within these defined strategic priorities rather than in the beginning, where they had to be very clear, I think about like, okay, let's prove that this works.

And here are the first, you know, projects that you should focus on.

And it was a little more prescriptive at the beginning to kind of get things off the ground.

And now we have this partnership and we have this velocity of work that's happening, um, which I think allows us to kind of come back to the strategic level to help focus the priorities going forward.

No, and I I appreciate the the strategic framework.

Uh an area that I and it relates to uh council member Palmer's uh um some of the line of his questioning as far as downtown vitality storefronts, and I do think uh when it comes to downtown vitality, eyes on the street does add to public safety.

So there is an element of it there.

Uh what I uh want to make sure is that the balance of the, and I think it falls and drive purposeful growth.

The the pop-up retail, this the uh helping with arts and culture to really bring that downtown vitality is really important.

I know that the biolabs bring that international wow, and I want to make sure that we're really getting our bang for our buck here in Rochester when it comes to downtown vitality.

When I look at uh the initiation of DMC, I heard it's bringing that uh quality and uh and feel with that's within Mail Clinic to out uh outside of Mail Clinic, and that includes the experience of patients and visitors in our downtown.

And so uh really want to uh make sure that that you don't lose focus on that and work with partners like RDA and others uh to push that uh forward because as uh council member Palmer said, there are empty storefronts.

I mean, we're talking about, you know, I and I I fully believe it.

We are the economic engine of Minnesota, but we kind of have to work on the block by block storefronts as well to really show that to uh to our residents and visitors.

Yes, yes, agreed.

And the um you really hit upon, I think, uh, another way I've been thinking about these three strategies, and we've talked a little bit about it.

But if you think about um driving health innovation, that's something that you know DMC has resourced a team to focus on that, obviously partnering with Mayo Clinic, and then all of the sort of private companies globally that they're looking to work with, right?

When you think about uh design for well-being, the city is really that key partner in that.

And then when you think about that last one, the driving purposeful growth, that is something that is um impossible without the partners, right?

Like that is something where you know, RDA, Experience Rochester, the Coalition for Rochester Area Housing, like those are our partners that bring that strategic priority to life.

Um, and so I think yeah, you've really kind of hit upon that, and um, and we'll we'll yeah, bring some additional clarity to that when we come back.

Great.

Thank you very much, Ms.

Steinhauser.

Any any closing comments or Mr.

Steve?

Thank you.

Um, I just want to say thank you to all of you and the uh comments you shared.

I was taking extensive notes.

Jamie Rothy from our team is here as well.

We've been listening closely.

And I just want to say there's so much in this conversation that does in fact reflect this in inflection moment we're at.

When DMC first came to Rochester, we landed like a thump in this in this town where it was this big new thing that came from outside, and we're at a point now where um DMC is not the only game in town.

The municipal government has grown and expanded and and um modernized uh Rochester Downtown Alliance, Experience Rochester, the housing coalition, the the entire ecosystem that really is necessary to support a city's growth has grown up around.

We have had 10 years of the opportunity of making mistakes, as council member Doring uh uh mentioned, and and learning from those mistakes.

And I think it's right to to acknowledge those.

And this work that we're coming forward with isn't going to have specific plan projects in it.

And so if anybody's looking for a project, you didn't get to page 177 in your um in your notes, but I'm pretty sure you read the entire entire document.

But we're not going to bury a plan or a project, rather a project somewhere in the middle of this document that if you sign on to this, you've now signed on to some project that you weren't aware of because we know the project decision making happens with the give and take of this council, the community, major employers, ourselves and others to figure out what's right, what's what's next.

And I think we have an incredible work plan we've developed.

And and I will just say that what's happening in Rochester right now is going to have a two-generational impact.

You happen to be the council that's living through it, that is building building through it.

The bus rapid transit.

74% of downtown city streets are going to be impacted rather in the DMC district, are going to be impacted, have been impacted or are going to be impacted in the next few years.

And you're at the tip of the spear in that.

You're hearing from community members.

And we have this chance right now to figure out are there new models as BRT is developing and there is going to be new housing along that three-mile corridor.

Are there new models that can get to solutions around home ownership and wealth building?

And are there are there new models for how we make decisions in this community?

And you get to be, you get to be right here making those decisions.

And this tool, this resource called DMC is wants to power that and partner with you.

And that's what this plan is going to try to reflect.

But it isn't a line in the sand and isn't it isn't one and done.

You know that we we get it in the ground, we get a plan documented, and then it will continue to evolve and shape as as conversations emerge and priorities develop.

So thank you for the conversation today.

We really appreciate it.

Thank you.

Uh Ms.

Steinhauser.

Yes, thank you.

It's always hard to follow Patrick when he is uh doing his inspirational wrap-up.

Um, I will say that um as was shared in the beginning is this comes back to you, and it comes back to you first.

You you get to act on this plan, uh, and then it will make its way to the DMC board in February is the current schedule.

So just felt that that was important to again acknowledge.

So thank you for the really really great discussions.

I also took a whole lot of notes.

We'll go back and uh recoup from this conversation and bring back a plan that you can and all of us can be really proud of.

Thank you.

Uh Ms.

Uh Zelms of study session calendar.

Well, congratulations.

This is your last study session of 2025.

Um, however, you do have them again in 2026.

Um so your first study session is going to be on I almost said June, January 12th, 2026.

Um we have transit sustainability coming forward as well as um the Chateau Theater Operations and Inspect scheduled for that meeting.

Um and then the second meeting, uh second study session in January on the 26th.

Um, we are still finalizing a location, but you can plan to uh be uh preparing for leadership with your strengths.

So thank you.

Uh Mr.

Spindler Craig, could you take us into our executive session?

Thank you, Mr.

President.

Consistent with the published agenda, you can adjourn into executive session for the city administrators performance review closed pursuant to Minnesota Statute 13D.05 subdivision 3A.

You don't need a vote to move into session, but if you would let uh your colleagues know the room and time, that would be great.

And it is 104, correct?

It is.

Uh we will meet in 104 at 535.

And we are adjourned.