Eight projects approved for TIF under DMC effort
Eight construction projects have been approved for tax increment financing under Destination Medical Center guidelines; seven of those have been started.
The lone holdout? A proposed two-tower project along the Zumbro River has stalled, and members of the Rochester City Council have indicated a desire to change direction after a purchase plan for the city-owned property fell through.
That leaves $425.1 million in DMCC-backed, TIF-supported development since the first approval in 2014.
What is TIF? It’s a public financing option to help private building projects deemed to have public benefit. Under TIF, a portion of the new taxes collected after development is returned to developers, or dedicated to public construction associated with a private project — for example, a parking ramp built alongside an office tower. The money collected through TIF is intended to help cover funding gaps that would otherwise prevent development plans from moving forward, thus enabling projects deemed to have public benefit, such as parking, skyway connections or other public spaces.
Eventually, each TIF agreement expires, and the full tax revenues from the private project are collected for general public use.
Based on city estimates, the annual property taxes collected on the seven projects in the works is expected to increase from $910,991 to more than $4.8 million once all the work is complete and the projects are paid for.
The projects that have been approved by the DMC Corp. board and Rochester City Council are:
A 19-story, mixed-use building in the Downtown Waterfront subdistrict, the project includes 15,000 square feet of planned retail space and 264 hotel rooms under the Hilton brand. The city is building a 630-space parking ramp in connection to the project.
Status: The project broke ground in December 2016, and an opening is planned for April.
Developer: Titan Development and Investments of Rochester and Harbor Bay Real Estate Advisors of Chicago
Capital investment: $125 million
Approved tax-increment financing: $3,685,000
Anticipated property tax change: From $23,058 to $977,250
A six-story, mixed-use building in the Discovery Square subdistrict, this project includes 9,000 square feet of planned retail space and 154 market-rate apartment units.
Status: Construction started in March 2018, and the building is expected to be completed in July.
Developer: Opus Development Co. and Titan Development and Investment, both of Rochester
Capital investment: $38 million
Approved tax-increment financing: $3.8 million
Anticipated property tax change: From $70,158 to $472,000
The 89,000-square-foot project is set to be the first life science building in Destination Medical Center’s Discovery Square subdistrict. The four-story building will have 80,000 square feet of rentable space.
Status: The project held a ground-breaking in November 2017, and the building is expected to open this spring.
Developer: Minneapolis-based M.A. Mortenson Co.
Capital investment: $35 million
Approved tax-increment financing: $4.9 million
Anticipated property tax change: From $68,136 to $485,580
The project along the Zumbro River was intended to include two towers with a mix of senior housing, condos, a hotel and retail space, as well as public amenities, which would have included parking and park-like gathering space.
Status: The project was set to start this summer, but the developer backed out of the purchase agreement. The city is considering seeking other proposals for the land, and Bloom has indicated it will submit a new proposal if that happens.
Developer: Bloom International Realty
Capital investment: $230 million
Approved tax-increment financing: $18.05 million
Anticipated property tax change: From $222,596 to $2.59 million
Wells Fargo Renovation
Renovation plans for the Wells Fargo building, where First Avenue Southwest meets the Peace Plaza, includes a glass addition to extend the public space in the plaza and connect the subway, ground and skyway levels. Additional work supported by approved tax increment financing will includes brightening the area under the existing skyway over First Avenue.
Status: Work on renovations started in September and is expected to be completed this summer.
Developer: Ryan Companies
Capital investment: $26.6 million
Approved tax-increment financing: $2.4 million
Anticipated property tax change: From $377,274 to $584,868
Berkman Apartments at Second Street Southwest and 14th Avenue
A 13-story, mixed-use building in the Saint Marys Place subdistrict, the residential and commercial project includes 21,000 square feet of planned retail space and 347 luxury apartments. The project will include 560 parking spaces.
Status: The project held a ground-breaking in November 2017. The opening is planned for the summer of 2020.
Developer: Twin Cities developer Alatus LLC
Capital investment: $115 million
Approved tax-increment financing: $10.5 million
Anticipated property tax change: From $136,606 to $1.25 million
Hotel Indigo Renovation
Renovation and rebranding of the downtown Holiday Inn, 220 S. Broadway, which will include 173 hotel rooms, while ground floor office spaces and existing condos remain owned by other individuals and businesses.
Status: Work on renovations have started and plans call for opening this summer.
Developer: EKN Development Group of Newport Beach, Calif.
Capital investment: $41.5 million
Approved tax-increment financing: $2.98 million
Anticipated property tax change: From $215,123 to $533,000
A eight-story, 175-room extended-stay hotel, the project will include ground-floor retail or restaurant space on the former American Legion site at the intersection of First Avenue Northwest and Civic Center Drive.
Status: Project received final approval in February, and construction efforts started within weeks. An official groundbreaking is planned in April.
Developer: EKN Development Group
Capital investment: $44 million
Approved tax-increment financing: $3.9 million
Anticipated property tax change: From $20,634 to $540,000