Rochester Votes to Commit Millions to Downtown Housing Project

Rochester, MN (KROC-AM News)- The Rochester City Council has made a sizable financial commitment to continue development of a housing complex in downtown Rochester.

Read More: Large Housing Project Proposed Near Mayo Civic Center

The elected leaders approved the commitment on a unanimous vote. The project’s price tag has increased by nearly $30 million since 2022 due to rising interest rates and construction costs, according to the agenda item.

In March of 2022, the Rochester City Council approved a partnership with Sherman and Associates to construct a mixed-income housing complex in the surface lot that lies to the north of the Mayo Civic Center in downtown Rochester.

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The Minneapolis-based real estate developer’s current proposal calls for construction of a 13-story tower with 243 market-rate units and a five-story mid-rise building containing 76 units of senior housing at 30%, 50%, and 60% area median income, according to the agenda item.

The two structures would contain a combined 289 units. 80 of those units are deemed affordable at 60% of the area’s median income, the agenda item says.

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The development plans also include a parking structure that would house 362 stalls that would be shared by the residents of the two buildings.

Council members authorized $13 million in tax increment financing for the project and committed $3 million in Destination Medical Center funds for the development.

Sherman Associates Rendering

The cost of the development has climbed from $102.2 million in 2022 to $129.1 million today.

The next steps in the process call for city officials to negotiate affordable housing development requirements, claw-back provisions, and project timelines with Sherman.

The developer also plans to apply for MHFA Infrastructure Bonds in July to help cover the cost of the affordable housing component for the development.