OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Rochester City Council Work Session - June 22, 2026: Urban3, TIF Policy, and Elton Hills Drive

City Council — Monday, June 22, 2026
BodyRochester, Minnesota
SessionCity Council
DateMonday, June 22, 2026
StatusFILED
Video Record
0:00 / 3:15:50

Transcript — Verbatim
0:56

Welcome to our colleagues here at the tables to staff staff people, to our consultants, to the community who are gathered here.

1:04

I am acting council council council president in place with President Schubert.

1:12

And Patrick Keene to the table.

1:14

So thank you for uh being with us again this day.

1:16

We have three really important topics, and we have some consultant deadlines, timelines uh to follow.

1:23

So I will uh try to uh observe pretty closely the eight-minute limit for any one council member on any one topic.

1:30

I will turn it over to administrator Zalmus, please.

1:36

Thank you.

1:36

We're going back back in time.

1:38

Um, so our first item that we have here is a presentation from Urban Three that um you saw a little snippet of at the DMC City County um joint meeting about a month ago.

1:47

Um, but this is much more information if you take a look at your packet.

1:51

Um, and so I will turn it over to um community development director Irene Woodward, and she will do an introduction and I just did want to qualify.

2:00

This is a lot of information, and I don't think it's the last time you can expect to see um smaller snippets of this, um, but we wanted to give you all of it in one fell swoop today.

2:11

Thank you.

2:11

I'll just briefly say um there we're kind of doing both a revenue analysis.

2:15

So the last time there was a revenue analysis done by Urban 3, it was about five years ago.

2:19

Um, in addition, there was also a fiscal analysis that wasn't previously done.

2:23

Um I want to thank um RPU public works and finance who contributed a lot of data to make that happen.

2:29

Um, and so really Heather Worthington from Urban Three is gonna go through that entire presentation and kind of that whole analysis, and then we'll be available for any questions that we go through.

2:38

So without, I'll turn it over to Heather.

2:41

Thank you, Irene, thank you, Alison.

2:42

Um, great to be with you today.

2:44

Thanks for having us here in Rochester.

2:46

I am Heather Worthington with Urban Three.

2:48

We are located in Asheville, North Carolina.

2:50

I am based in the Twin Cities, and so I just drove down this afternoon.

2:54

I'm a rust belt kid originally, and I just want to introduce myself.

2:57

I grew up in Lansing.

2:59

Um I was always fairly skeptical, so this is an accurate photo of me.

3:04

Uh and my dad worked for the city, and so I went on to work for a city and counties, and um my favorite thing as a kid was schoolhouse rock.

3:13

And I really believe in deep curiosity and this Francis Bacon uh quote, knowledge is power.

3:19

You might have thought Schoolhouse Rock invented that.

3:21

They didn't actually for Sir Francis Bacon said it first.

3:24

Um as a little kid, I loved my world book and my yearbook and my world book and my Globe, of course.

3:30

And I went on to work in various jurisdictions in the Twin Cities.

3:34

So I was the city manager in Falcon Heights and the assistant Nidina, and then I worked for Ramsey County, and I ended my career in local government as long-range planning director in Minneapolis, leading the Minneapolis 2040 plan.

3:45

So that's just a little bit about me.

3:47

Um what we're gonna cover today is really the full meal deal that we did for Rochester, and you know, one of the things that we get asked a lot is what is a city.

3:54

Well, a city is really shaped by the people who live there.

3:58

Uh it starts out like this though, as just sort of green land.

4:01

Um about cities and how they grow is thinking about land production, right?

4:10

So if you're a farmer, and if any of you grew up on a farm or just maybe one generation from the farm, you understand that farmers apply a simple rule of land economics, and that's the yield of the land, right?

4:22

So they look at land with water per acre, crops per acre, labor per acre, etc.

4:26

And we think at Urban 3 that's a really good way to look at the same uh data for buildings in a city.

4:34

And I'm gonna show you this example.

4:35

This is in Ramsey County.

4:37

So these two examples, one in Roseville on the left, the Walmart, and the Osborne 370, formerly the Eco Lab Tower in downtown St.

4:44

Paul.

4:45

And we really wanted to see how does land use regulation shape productivity uh of that land use.

4:51

And you'll note that that Walmart sits on 19 acres.

4:54

Spoiler alert, that's small for a Walmart in the United States.

4:57

They're typically around 25 acres.

5:00

Roseville actually negotiated the size of that parcel down with Walmart.

5:03

I just like to make sure people know that.

5:05

We typically use a Walmart as an example because it's a very consistent land use across the United States.

5:10

And we've worked in 46 of the 50 states and two Canadian provinces.

5:13

And they're usually the same footprint of the building, similar lot size.

5:19

The Osborne 370 building sits on just a half acre.

5:22

It's a very tall, narrow building, and but it's very productive in terms of the amount of revenue it's generating for the city.

5:30

And it's also oddly very productive in terms of the number of jobs that it produces for the city.

Discussion Breakdown — Share of Meeting
Economic Development██████████████████████████26%
Transportation Safety███████████████████████23%
Tax Increment Financing█████████████13%
Fiscal Sustainability██████████10%
Public Engagement██████████10%
Engineering And Infrastructure████████8%
Affordable Housing█████5%
Active Transportation██2%
Public Safety██2%
Summary of Proceedings

Rochester City Council Work Session - June 22, 2026

The Rochester City Council held a work session on June 22, 2026, covering three major topics: a presentation by Urban3 on land use productivity and fiscal analysis, a review of Tax Increment Financing (TIF) policy options, and a corridor safety study for Elton Hills Drive. The meeting included extensive discussion among council members, staff, and consultants. No formal votes were taken; staff were directed to bring back refined recommendations for the July 20 council meeting.

Urban3 Presentation: Land Use Productivity and Fiscal Analysis

  • Heather Worthington from Urban3 presented an analysis of Rochester's land value per acre, tax productivity, and infrastructure liabilities. Key findings included: Rochester's productivity ratio of 11.8 (city vs. county), the DMC district's ratio of 195.3 times the county area, and the top parcel (Guggenheim building) valued at $167.5 million per acre.
  • The presentation highlighted that compact, dense development generates significantly more revenue per acre than low-density uses. For example, the Galleria (under 1 acre) produces similar value to Walmart (16.9 acres).
  • Council members discussed trade-offs between productivity and quality of life. Councilmember Miller asked about annexation ROI; Councilmember Keene questioned the narrow focus on property value and urged consideration of qualitative factors. Mayor Norton emphasized balancing fiscal health with resident needs, including homeownership and parking.

Tax Increment Financing (TIF) Policy Review

  • Todd Hagan and Liz Diaz from Ehlers presented an overview of TIF fundamentals, current portfolio performance, and future policy options. Rochester has about 40 active TIF districts, having invested $120 million in increment to leverage $1.5 billion in development, including 4,000 residential units (46% at 80% AMI or below).
  • Key options discussed: decertifying districts when obligations are paid vs. keeping them open for pooling. For the DMC district, keeping districts open could yield $65 million in cumulative pooling for redevelopment (vs. $14.5 million if decertified). Pooling could fund affordable housing or infrastructure.
  • Council debate: Councilmember Keene expressed preference for returning increment to the general fund, wary of creating new funds. Councilmember Miller argued for strategic reinvestment to increase land productivity, especially along transit corridors. Councilmember Palmer requested a future analysis of prevailing wage impacts on TIF projects. Councilmember Doring questioned whether policy should be case-by-case rather than codified.
  • Staff will bring back policy recommendations for council action, including prevailing wage analysis.

Elton Hills Drive Corridor Safety Study

  • Sam Bodzina (traffic engineer) and Nick Grage (consultant) presented a traffic study for Elton Hills Drive. Key data: Average daily traffic 9,000–11,600 vehicles, speeds have increased post-COVID (85th percentile speeds 36–40 mph), and 12 segments have crash rates above statewide averages. The corridor has two elementary schools and a middle school.
  • Staff recommended a three-lane configuration (four-to-three lane conversion) to improve safety, reduce conflicts, and lower speeds. Two alternatives presented: Option A (three lanes with parking on both sides) and Option B (three lanes with a two-way cycle track on the north side and parking on the south side). Public engagement (180 surveys, 43 emails) showed 40% support for three lanes, 62% opposed bike facilities, and nearly half favored no parking.
  • Council discussion: Councilmember Doring asked about parking utilization (under 10%), school input (favor safety), and enforcement vs. engineering. Councilmember Palmer advocated for four lanes with safety improvements, citing public opposition and business concerns. Councilmember Miller favored the three-lane option with cycle track, emphasizing the need for measurable data and a trial period. Councilmember Keene supported three lanes but sought better communication with residents.
  • Staff will bring back a refined preferred alternative for council action on July 20, including options for cycle track protection and a four-lane alternative with safety measures.

Key Outcomes

  • No formal votes were taken during the work session.
  • Staff directed to bring back TIF policy recommendations and a preferred alternative for Elton Hills Drive for council action on July 20, 2026.
  • Prevailing wage analysis will be included in future TIF policy discussions.
  • Urban3 data will inform ongoing land use planning and budget decisions.

Meeting Transcript

Welcome to our colleagues here at the tables to staff staff people, to our consultants, to the community who are gathered here. I am acting council council council president in place with President Schubert. And Patrick Keene to the table. So thank you for uh being with us again this day. We have three really important topics, and we have some consultant deadlines, timelines uh to follow. So I will uh try to uh observe pretty closely the eight-minute limit for any one council member on any one topic. I will turn it over to administrator Zalmus, please. Thank you. We're going back back in time. Um, so our first item that we have here is a presentation from Urban Three that um you saw a little snippet of at the DMC City County um joint meeting about a month ago. Um, but this is much more information if you take a look at your packet. Um, and so I will turn it over to um community development director Irene Woodward, and she will do an introduction and I just did want to qualify. This is a lot of information, and I don't think it's the last time you can expect to see um smaller snippets of this, um, but we wanted to give you all of it in one fell swoop today. Thank you. I'll just briefly say um there we're kind of doing both a revenue analysis. So the last time there was a revenue analysis done by Urban 3, it was about five years ago. Um, in addition, there was also a fiscal analysis that wasn't previously done. Um I want to thank um RPU public works and finance who contributed a lot of data to make that happen. Um, and so really Heather Worthington from Urban Three is gonna go through that entire presentation and kind of that whole analysis, and then we'll be available for any questions that we go through. So without, I'll turn it over to Heather. Thank you, Irene, thank you, Alison. Um, great to be with you today. Thanks for having us here in Rochester. I am Heather Worthington with Urban Three. We are located in Asheville, North Carolina. I am based in the Twin Cities, and so I just drove down this afternoon. I'm a rust belt kid originally, and I just want to introduce myself. I grew up in Lansing. Um I was always fairly skeptical, so this is an accurate photo of me. Uh and my dad worked for the city, and so I went on to work for a city and counties, and um my favorite thing as a kid was schoolhouse rock. And I really believe in deep curiosity and this Francis Bacon uh quote, knowledge is power. You might have thought Schoolhouse Rock invented that. They didn't actually for Sir Francis Bacon said it first. Um as a little kid, I loved my world book and my yearbook and my world book and my Globe, of course. And I went on to work in various jurisdictions in the Twin Cities. So I was the city manager in Falcon Heights and the assistant Nidina, and then I worked for Ramsey County, and I ended my career in local government as long-range planning director in Minneapolis, leading the Minneapolis 2040 plan. So that's just a little bit about me. Um what we're gonna cover today is really the full meal deal that we did for Rochester, and you know, one of the things that we get asked a lot is what is a city. Well, a city is really shaped by the people who live there. Uh it starts out like this though, as just sort of green land. Um about cities and how they grow is thinking about land production, right? So if you're a farmer, and if any of you grew up on a farm or just maybe one generation from the farm, you understand that farmers apply a simple rule of land economics, and that's the yield of the land, right? So they look at land with water per acre, crops per acre, labor per acre, etc. And we think at Urban 3 that's a really good way to look at the same uh data for buildings in a city. And I'm gonna show you this example. This is in Ramsey County. So these two examples, one in Roseville on the left, the Walmart, and the Osborne 370, formerly the Eco Lab Tower in downtown St. Paul. And we really wanted to see how does land use regulation shape productivity uh of that land use. And you'll note that that Walmart sits on 19 acres.

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