To a meeting of the Rochester Economic Development Authority.

And we will move directly to our consent agenda.

Is there a motion to approve the consent agenda, which is our minutes from the March 2nd meeting?

So motion made by Councilmember Fredericks.

Okay.

Seconded by Councilmember Miller.

All in favor say aye.

Aye.

Opposed say nay.

And we will move to now our one public hearing, which is uh for a establishing development district number 88 and tax increment financing district number 88 1 and entering into a development assistant agreement with Rochester 1 Limited Partnership, Mr.

Svenby.

Good evening, EDA presidents, EDA members and Mayor Norton.

Brent Scenby Community Development.

This is a public hearing on TIFF district number 88 1.

We called it Lincoln Avenue Communities.

It's actually the same property where the council had the issuance of the public hearing for the bonds are negotiating the commons at Bear Creek.

So it went out the other day, took some pictures of the sites.

Looks like it was a rental property, probably a couple units in that property.

Here's a rending of what the project will look like when it's completed.

Again, it's 149 units with an income averaging of 60% AMI.

They have gone through the site development plan process with the community development department.

So this is the plan that was that has been approved for the project.

So it will be a very well sought after addition on 4th Street there, just on the east side of the river.

Some project details the developers Rochester One Limited Partnership located at 602 4th Street Southeast, just east of Bear Creek.

The development is 149 units of that.

They have units three units at 30% AMI, 27 units at 50% AMI, 83 units at 60%, and 36 units at 70% AMI levels.

Amenities include a fitness room, club room, and secure bike storage.

The timeline for construction is they anticipate starting construction here by the end of July of this year.

And if everything goes smoothly, they should be able to have it completed by end of December of 2027.

The TIFF district would be housing TIFF district.

The current property value of the properties is about 1.2 million dollars.

The value that we've received from the county assessor's office upon completion, the project would have a value of about 28.2 million dollars.

Based on our review by our financial advisor who reviewed the developers performa and with current market conditions, it's a recommendation of our financial advisor that we provide up to 19 years or just over 1.3 million dollars worth of principal TIFF for the project.

And that was achieved by having a 2.5% annual inflator on the market value for the property.

So we could get to that 1.3 million dollars quicker than 19 years, but um their miling shows that it would take 19 years with that two and a half percent inflator.

In a perfect world, it may be only 15 years before we get to that point.

At any point that TIFF district, we would stop paying the increment to the developer either at 19 years or that 1.3 million dollars, whichever occurs first.

And the TIFF note would be a pay as you goal note, meaning that the developer pays his property taxes.

The county collects that provides the cities with the available increment, and then we've rebate that back to the developer.

We do maintain five percent for admin expenses, and we also are keeping five percent into our housing pool TIFF.

Project benefits um again, it provides a number of um units at that 30, 50, 60, and 70 percent AMI levels.

It redevelops some under utilized properties, it will shrink then the neighborhood safety in the area, it creates density and the transit oriented development along fourth street there, and then the tax base grows once the obligation is met.

And then the tax base grows once the obligation is met.

Again, this evening, this is a public hearing of the EDA to adopt a resolution establishing the tax and equipment financing district and authorizing execution of a development assistance agreement with Rochester One Limited Partnership.

That's all I had.

Thank you, Mr.

Svenby.

This is a public hearing.

Anyone wishing to be heard on this item, please step forward.

Anyone wishing to be heard on this item, please step forward.

Mr.

Riley, if you want any to add any comments, now's the time to add them.

Thank you.

Mayor, Council President, Council members.

I think Brent did a great job of describing the benefits that we're bringing here.

I just want to say on behalf of the developer, we appreciate your consideration for the support.

Right now it's it's very difficult to finance projects.

I think you know you were alluding to uh with a project that was presented earlier this evening and using TIFF to finance this property is really imperative to getting it done.

So just want to say thank you and uh express how important this is to our project moving forward.

Thank you.

This is a public hearing.

Anyone else wishing to be heard on this item, please step forward.

Are you gonna speak during the public hearing?

Sorry, I should have mentioned it earlier.

Okay, go ahead.

I did bring some numbers with me just on um AMI levels for Rochester.

Um, these are 2025 numbers.

I will mention that HUD just released on Friday the 2026 numbers.

I have not updated my numbers yet, but um based on HUD's numbers from 2025.

So, like someone at that 30% AMI level, like a single person, um, they would be making about 26,400 a year.

Someone at the 50% AMI level would be making about 44,000 a year.

60 percent is 52,800 a year, and at that 70% level for a single person is about $61,600 a year.

Um, that was 2025 levels, 2026 numbers have increased somewhat.

I think around 3.3%, I believe if I remember correctly.

So just want to give you some context of what those AMI levels would be for single person.

If you want to know two, three or four five person households, let me know.

I can let you know.

Thank you, Mr.

Svenby, and we will get back to our public hearing.

Anyone else wishing to be heard on this item, please step forward.

Seeing no one, I will close the public hearing and invite Mr.

Svenby back up to answer any questions and and Mr.

Riley as well.

And I have uh council member Palmer first.

I got a couple questions for you.

So the um people who are representing today, they own the property at the current time.

They're going through that process to close on the property, correct?

So they don't own the property.

Not fully at this point, correct.

Okay.

The number of units, um, my understanding was that they're gonna be some three bedroom units in here.

Is that correct?

Correct.

Yep, they have one, two, and three bedroom units in the property.

And that's something that we sorely need is the three bedroom.

Yep.

Okay.

There's a fence that runs around the trail on that property.

It's falling down.

Is there a way to get the property owner to fix that fence?

Is that fence on the city's property or is that on I'm gonna believe it's their property?

Well that we we would maintain our own fence.

Um I wish I had the approved site plan with me, but I don't.

Um, if counselor, if you do remember, um the city did sell to the developer two small slivers of land back behind the site to make their site more developable.

Um, I don't know if Desmond would happen to have their site planner.

Uh Ms.

Woodwork Woodward, please go ahead.

I just wanted to note we did receive a complaint about the fence, I think a couple weeks ago, and we've reached out to the property owner and following up with maintaining that currently right now.

So that is something we've already been notified of, and we're following our proper procedure as well.

And it wasn't me that complained.

Uh councilmember Wall.

Thank you.

Uh, no matter how often uh we talk about TIFF, there seems to be this great mystery in the city of Rochester, maybe other cities as well.

Uh by creating uh uh TIFF district, uh, we are not adding to the property tax of anybody in town.

That is correct.

We uh will benefit in the long run by the great improvement on a set of properties that currently are quite underdeveloped.

That is correct.

And so on uh on the whole, it would be pretty easy to say that this is uh a plus or a benefit for the city of Rochester financially, uh certainly in uh the long run.

And correct, and even now by creating 100.9 units of housing, um the three taxing jurisdictions still collect the taxes that the property is currently generating.

It's just that that time when the 19 years, whatever that is, any increase in tax the taxes are are being all say rebated back to the property owner or developer for the project.

Thank you.

I'm sure we'll have this conversation again at the next meeting, probably.

Yep.

Count Councilmember Doring.

So I'm gonna ask you to math a little bit for me.

Okay, so I I really appreciate you bringing the 2025 AMI numbers for you, but I've been asked questions about what that means for rent cap at those certain percentages.

So a single person uh in 2025, AMI at 30 percent is 26.

26400.

And we would figure out how what to rent uh what to cap the rent at how typically you would take 30% of that and divide that by 12.

So what could that particular unit be expected to rent for?

Well, they also have in the chart, they also have uh maximum rents based on bedroom size.

Yep.

So like seven at 30% AMI for a studio would be $660.

Okay, a one bedroom would be $706, two bedrooms eight hundred and forty-eight dollars.

Okay, that's great.

I I just think it's it's helpful for for the general public to know how those rent caps are calculated and what they might actually be in real dollars, and that's of course, noting that AMI is going to be different in 2027, 2028 when these units are rented.

So thank you.

Councilmember Keene.

Uh, yeah, two questions.

One is we're doing we're being asked to do two things tonight, and that's you know, uh resolution establishing the district, and we're doing that, but at the same time, we're also doing the agreement.

Is that usually done in different times?

No, we typically like to bring them the same meeting so the EDA remembers what we're talking about.

Otherwise, if we waited three months, or now we'd be giving you the whole spillover again of the TIFF district recreates.

We do like to keep them at the same meeting if possible.

Okay.

I I think we're not always ready to do it, but that's uh keeping the same meeting.

I I noticed I didn't again I've I just using some of your numbers, the 28 million projected project.

I didn't maybe assume that, but it would seem that we must it's us uh to take 19 years to get to the uh I think it was one point 1.3.

Uh doesn't look like we're taking the full increment, or are we assuming this is going to be tax advantaged for low income?

Well, the units at that 40 or at the 30, 50, and 60 percent will be taxed at a 40 rate, which is 0.25 instead of 1.25.

So basically they're paying about 80% less than what a market rate project would be paying in taxes, so it doesn't join generate much in taxes.

That's why it's taken so long to get to that number.

I guess that's what I wanted to see.

If that's kind of looking for me to go 19 years to get to that 1.3 means that it's um it's already very tax advantage, and it really reduces the leverage we have with TIFF.

Correct for that, yep, because you the TIFF is collected off that project itself.

Yep, thank you.

Mayor Norton.

This is just for clarity.

Something you said earlier was a portion of the TIFF goes to the housing fund, and I thought it was only I thought that was only if they did not provide low income that we took that percent to go to the housing fund.

Am I remembering?

It's any any um TIFF project that TIP that we established, we can um capture some of that for our pooled housing TIFF dollars.

Um we haven't done that many over the years, but um by state statute, we can collect um 10% of the increment for admin expenses.

So we have started um collecting the five five percent for admin and then the five percent for um our pooled housing TIFF.

So we'll bring we'll come back to the council in the say session in June, we will talk about that.

Yeah, because that's different than we talked about it several years ago.

We haven't talked about this for a long time, but it was only if it was like our way of encouraging them to uh do low income housing.

Um so I was just surprised to hear that.

It's fine.

Uh so we are taking two actions.

It's appropriate to have one motion for this.

So with that, is there a motion on this?

Go ahead, council member Fredericks.

Make a motion adopting a resolution establishing a tax increment financing district through approval economic development district number 88 in the tax increment financing district plan number 88-1, authorizing execution of a development assistance agreement with Rochester One limited partnership for tax increment financing district number 88-1.

Uh motion made by council member Fredericks.

Is there a second?

Second.

Seconded by Councilmember Doring.

Any further discussion?

Seeing uh Councilmember Dr.

I just want to say I think that the uh to financing is so important to help with our affordable housing crisis here in Rochester.

Just doing a quick quick Google search.

Uh uh average rental market rate rental for a studio apartment for one person in Rochester is $1,228 to $1,286 per month.

So by uh awarding this financing at that 30% AMI, it's making something that is unattainable for something, someone very attainable.

So I appreciate that.

Thank you, Councilmember.

Councilmember Fredericks.

I'll just echo what I said earlier.

I appreciate you adding an affordable option to our downtown community.

Thank you.

With that, all in favor say aye.

Aye.

Pose say nay.

Motion passes.

Is there a motion to adjourn the EDA?

So motion uh made by councilmember Palmer and seconded by council member Wall.

All in favor say aye.