Other business first item on our other business is we will be we are now recessing to the Rochester Economic Development Authority meeting and I will call the meeting to order.

And uh first item is our consent agenda.

We have the minutes of the February 2nd, 2026 meeting on our consent agenda.

Is there a motion to pass the consent agenda?

Moved by council member Fredericks.

Second.

Seconded by Councilmember Miller.

All in favor say aye.

Aye.

Opposed say nay.

Motion passes.

We have no public hearings.

We have one uh report and recommendation, which is the development assistance agreement relating to the city walk apartments for tax increment financing district numbers 85 dash one.

Mr.

Johnson.

Thank you, Council President, Mayor, Council members, and I guess in this case, EDA members.

Uh tonight, uh, as President Schubrink said, we're requesting approval for the development assistance agreement for the citywide project TIFF number TIFF district number 85.

Uh you may you may re uh may recall that about this time last year, May, we were uh here for the city walk where we established the TIP plan.

Since then, the CityWalk team has been working on getting their financing in order and working on um connecting with an equity investor.

Um they've accomplished both of those uh the both of those items along with many, many other uh um conversations and meetings that we've had over the last year.

Um so now we're in an expedited period where uh if tonight the DAA gets approved, um, they're looking on closing on the site in April and then start construction in June.

We're looking at about a 25 month construction period.

So um uh even so the development assistance agreement requires the project to be completed by December 31st of 2028.

Um not much has changed with the development, so I'm gonna be pretty brief tonight.

Um, but it is a 13-story residential building, uh, 342 total units.

Um the the project consists or the project total investment cost is just shy of 140 million dollars um to put that into scale.

That is the largest multifamily development that Rochester's ever seen.

Um, not accounting for inflation.

The the Berkman uh when that was built cost 115 million dollars.

So if it weren't built today, of course, it would it would be much more.

But uh this is the largest private investment for multifamily project we've seen.

Um a couple of the other amenities that I just wanted to mention because we had a robust conversation about Sixth Avenue, is this site does feature uh bike parking garage right off of Sixth Avenue.

We'll take advantage of that uh bicycle track.

So the the site transformation itself, um, as I mentioned with the the private investment.

Why that matters is the current uh SM market value for the site is 3.1 million.

The minimum assessment agreement that we um agreed with the Omstead County on is 86 million.

So that's roughly a 2,600 percent increase in property tax value growth.

Uh that's a heck of a return on investment.

Um the other the other element there, just to put it into context is the the owner of this site also developed the river the riverwalk apartments just across the river there.

Very nice.

Uh about 152 units.

That uh apartments currently valued at 24 million dollars.

So this project, the minimum assessment will be three and a half times what Riverwalk is currently valued at.

Um, so just to put that in into scale, and also this site is actually smaller than the riverfront site.

So we're talking about a lot of density and a high employment sector with uh public transportation right across the street.

Um, the other things that I wanted to mention is the site was considered blighted.

Um, whenever we're doing a redevelopment district, the statutory requirement is that it needs to pass the blight test.

So here in the city of Rochester, we we put the onus on the developer to actually work with a certified engineer or certified architect to create an independent blight analysis or blight study, um, which in this case they did.

Um, and that blight study has to meet very specific criteria per state legislation for redevelopment TIFF districts.

Um, the other things that I just want to highlight too are as part of the construction of this project, they're going to be improving the turning movement from uh second street turning south on Sixth Avenue.

Uh, where right now you sort of have this odd, you know, quick quick turn lane turning right onto that section.

Uh they're gonna realign that street so it's more of a 90 degree angle, it'll be safer for traffic, safer pedestrians, and really help align the vision for that sixth avenue corridor.

Um, that that also gives us the opportunity to create a larger public realm space on that corner.

Um, here you see in the picture, it's not gonna look exactly like this, but one of the elements is going to be a functional stormwater uh management uh feature um that will look good and and provide the storm some stormwater management for the site.

Um one, I think unique and creative thing.

Uh I don't think it gets gets enough credit, but we are actually because of the owner, current owner of the site owns the adjacent apartment complex to the west and to the south.

Uh, we are requiring that owner per agreement to go into a 20-year agreement.

So you can only do 10 year increments with the county's 4D program, but putting it into two um rotations for the 10-year 4D housing, which preserves a hundred percent of those units at 60% AMI or less for a minimum of 20 years.

Um, this with Mail Bold forward and bound with the citywalk development, it's only gonna put more and more economic pressure on on this area.

Land values are going are getting higher, um, redevelopment's becoming more attractive.

So, in order to you know maintain our nationally occurring affordable housing, which is a priority in our housing spectrum, uh, our housing ecosystem.

Um, and really the only way that that's achievable or attainable is direct assistance.

In this case, we're providing direct assistance to the citywalk apartment, but also getting the benefit of these being put into the 4D uh program.

Mr.

Johnson, can I ask a question about those?

Are there so they own those two properties?

They're preserving the 67 units, which that's the number of units that are there now.

Are they doing anything to renovate those properties?

Yes, thanks to council president.

So the um the building to the south was in better condition.

They have done uh some improvements just in terms of paint carpeting um lobby.

The apartment complex to the west, which is 39 units, was in a bit more disrepair when it was acquired by the current developer, um, or the current owner, I should say.

They did put in about 300,000 to do painting all the doors, painted the walls, the carpet, um, they worked on the kitchen kitchens, including cabinet refreshes, new lighting, new carpet, you know, new amenities.

So the actual owner of those is is also the developer of the Riverwalk, also developer of the Red 44 apartments.

They also own a project management company, which is going to manage those prop properties as well as this property.

Um, and they take a lot of pride in you know, not only the condition of the units, but also the customers customer service of the tenants of those units.

So it's not going to be a passive ownership by any means.

Thank you.

Uh council council member uh wall.

Uh we had a speaker uh right at the beginning who said that uh he has been through the buildings and didn't find blight.

How do we define blight and what what was the blight in these buildings?

Yeah, so blight is actually in in you know just to go high level.

So 50% of the buildings on the site uh have to be considered um substandard or structurally substandard.

Uh and in order to uh to identify to prove that uh they have to look at what portions of the building don't meet current building code.

And if the buildings can be brought into compliance um to state building code for less than 15% of the cost to construct a similar building of similar materials, then it meets the blight assessment test.

So it's basically like what does it cost to renovate it, build it, put it uh bring it back to a current building code.

And if that cost is more than 15% uh of just building a new building, then it meets the blight test among some other things, but that's kind of the general test.

So it kind of sounds like an older building that that's just a little run down, all of them are gonna be blighted to a degree.

Yeah, I have yeah, okay.

Um because other buildings uh will be uh raised.

What will the reduction in affordable housing be in terms of units when once uh this is complete?

Yeah, so the Heffron House currently I believe has 10 units.

Okay.

So if we look at you know the City Walk site as well as the adjacent apartment complexes, we're at 77 units.

Uh if the Heffron house gets raised, demolished, then we're at, you know, 57 net uh naturally occurring affordable housing, you know, affordable housing units.

But we're also gaining 342 marker units.

Yep.

Yeah.

Um I don't think I I read what the length of the TIFF is.

Um the length of the TIFF, you know, it's always an either-or test.

So it's a 25-year TIFF term.

Unless the total principal gets paid off before reaching that 25-year term, then the district can be either decertified or used for other um applicable or um suitable purposes.

And it's currently uh uh 3.1 million evaluation.

Uh what would that bring in in annual taxes?

Um I wouldn't be able to do the math on site, and there's a mixture of commercial and multifamily, so there's going to be a different tax classification rate for those uses.

Um, you could probably just take two and a half percent or two percent, I should say, and you're gonna get relatively close.

Um and I'm not gonna do that math in my head.

Well, that's 60,000.

So we'll continue to get that for the next 20, 25 years.

Exactly.

That that value is frozen for the next 25 years.

But then after that, that's the 86 million valuation, depending upon um inflation and all that great stuff.

Yeah, yeah.

And like I say, 86 is the minimum.

So um, if you if you tracked what the Berkman did, that paid itself off significantly faster than we uh originally anticipated.

Um, but yeah, that's when you see your windfall is is once it gets back in the tax records.

Okay, thank you.

Councilmember Palmer.

We've spent a little bit of time today on Sixth Avenue uh in the road.

Is is this going to be um designed to match the cycle track that we currently have?

Um, so I you know took it.

It's on the other side of the road, isn't it?

Yes, it is.

That's the answer.

That's the answer.

And then um, I have a problem with people using naturally occurring um um housing.

Um to me that means they don't have any federal or any state or any city money into it.

So you you're just saying that we don't have any money in those two out lots.

Is that what you're saying?

No direct funding into those two.

Okay, and then the third one, and I'm gonna follow up on what Mr.

Um Wall said.

We had an expert this morning this afternoon who's talked about this being blighted, and now you have an expert.

So do you go off with the expert that actually did the results and looked at it?

Yeah, so in this case, Wood Seth, uh engineering is the expert, and uh we also have our TIFF attorney review the the blight assessments just to make sure that everything is legally you know compliant with state statute.

Good.

I just want to check on that.

Thanks.

Any other uh council member Keene.

Yeah, I I'm kind of confused too by council member Palmer's with you use naturally occurring affordable housing, but then you say it's in the 4D program.

I thought the 4D program was a program where the uh landlord will get the rent dis differential.

Uh no, the 4D program is really just a tax treatment of the of the property itself.

Well, again, if you get in that tax treatment, I don't know why you say it's naturally occurring.

Um well, they they have to the rents are capped, of course.

So, but for them putting those properties into the 4D program, which um requires them to meet the requirements of the county's program.

The the alternative would be I mean, you could put in some granite countertops, you could put on some new paint, you could charge market rate or workforce housing for it.

I I I guess I'm still trying to.

I mean, if it's in the 4D program, there is government assistance by not charging taxes.

I don't know why you would then also call it naturally occurring affordable housing.

Oh yeah, I guess we'll just call it affordable housing.

Remaining affordable housing, remaining affordable housing because the president should bring it if I may.

Uh go ahead, Mr.

Yetzer.

I think the the distinction there is what they're saying is that it's currently naturally occurring affordable housing.

Currently it's not in the 4D program, it's currently naturally occurring affordable housing, and those units are being preserved.

Okay.

So you're right.

After after this program, you could make an argument that it's no longer naturally, but in the in the moment it's naturally occurring, and but for this assistance, it may not be affordable housing anymore.

Okay, that's helpful.

Thank you.

Is there a motion on this item?

I'll make a motion to approve.

Uh motion made by council member Palmer.

Is there a second?

Second.

Seconded by council member Fredericks.

All in favor say aye.

Aye.

Aye.

Opposed say nay.

Motion passes.

Is there a motion to adjourn the EDA?

So moved.

Move by council member Miller, seconded by council member Keene.

All in favor say aye.

Aye.

Opposed, say nay.