Speaker numbers apply only to this recording.
The Rochester City Council held a study session on October 26, 2026, from approximately 3:30 p.m. to 6:30 p.m., before adjourning to a closed executive session for the city attorney's performance review. The session covered strategic management of Tax Increment Financing (TIF), a prevailing wage policy overview, a downtown employee parking program, and a review of the parkland dedication ordinance. Council provided direction on staff proposals without formal votes, as is typical for a study session.
Welcome everybody. We will uh start our city council study session for October 26, 2026. And we have a pretty hefty agenda today. So we are going to start with a tax increment financing policy considerations, and we're going to move into prevailing wage background and overview. Then we'll talk downtown employee parking program, then parkland dedication, and then we will leave this room and uh adjourn to a closed session for our city attorney performance review. So a lot of stuff that we need to kind of cover in the next three hours. So I'm going to start it off with Mr. Josh Johnson and uh TIFF. Thank you, Council President. Yeah, Josh Johnson, senior economic development specialist. Um I'm joined here with my colleagues who've been working on this, Brent Svenby as well as well as Ryan Yetzer. So if there's anything that uh I might forget, they'll they'll welcome them to jump in. Um so yeah, thank you for having us back. Uh last time we were in front of council with this topic was June 22nd, which does not seem that long ago, but um here we are in uh the first the first uh uh study session in in June was really to talk about the overall health status and then preview some of these topics um and now it's just going a little bit further. So a lot of these recommendations are coming out of the uh TIFF analysis that was conducted by our financial consultants Ellers. Um and we're just going a little bit deeper to talk about some of the policy uh considerations and and management of the TIFF districts. So um we've got three different sections. The first section is just doing a little bit of you know, uh level setting, another just reminder of where we're at with TIFF, some of the benefits of TIFF, and then we'll break it down into two parts. So the first part will be how can we uh better utilize TIFF administrative fees that we collect from TIFF districts, and then the other section will be strategic pooling and how that can support economic development and how can we better utilize that as a as a financial tour uh tool for the city. Um so just going into some of the TIFF priorities. So uh for the most part, Save Rochester utilizes three different TIFF districts. There are several different types of districts that have different legislative requirements. Uh the ones we traditionally relied on are housing districts that must meet certain uh uh area median income uh rates, redevelopment districts that are the standards, you know, Minnesota State statute uh districts, and then we have our special legislation for uh DMC TIFF districts. Um, and then this image is is really just how do we use utilize those districts to help support and um advance the Rochester uh City Council strategic priorities. Um so investment to date. Um we've gone back to this number a couple times. We're in the range of 43 to 44 open TIFF districts. We've got a couple more that we haven't certified, so um, you know, the actual number will be a little bit higher in the next month or two as we uh certify some TIFF districts. Um of all the open TIFF districts to date, we've invested over 120 million dollars. Uh that investment has led to the creation of over 4,000 residential units, of which 46% are affordable at uh 60% AMI or less. So making a pretty significant dent in the affordable housing uh area. Um we've also supported almost 800,000 square feet of commercial, uh almost 100,000 square feet of industrial, and then added almost 900 units of of hotel hospitality rooms. Um whenever we establish a TIFF district, we always do it as a paygo, so pay as you go. So it's actual the developer pays their taxes, almost the county collects those taxes, uh, they give the city the increment that was generated, and we provide the increment back to the developer. So we're never outlaying any cash, it never impacts uh our state um general fund or our general levy. Um also, you know, depending on the um how much TIFF we're utilizing. Um, you know, we talked to our financial consultants, TIFF by itself doesn't necessarily impact our triple way bond rating. However, positively it does impact the amount of market value growth and redevelopment uh we're told are important factors for receiving that triple bond rating. So uh impacts it positively, not necessarily negatively. Um using it as a as a tool for community development. Um, the graphic on the left, you'll see that originally the market value for the sites that we've that we use TIFF for was uh were at about 43 million dollars in assessed market value. Uh post-construction that those market values increased over 500 million, so an 860 per 2% increase in market value. Um that adds you know, about 450 million of taxable market value once those districts are uh decertified or are no longer um part of the TIFF district. Um