Rochester Council Weighs Funding Options for Proposed Mega-Dome
Rochester, MN (KROC-AM News) - The Rochester City Council will be presented on Monday with several options for financing a proposed Mega-Dome at the site of the Regional Sports Complex under construction in southeast Rochester.
Rochester Council Reviews Mega-Dome Funding Options
City staff was recently directed by the council to explore options for financing the construction of a year-round dome that could be used for indoor recreation and sports activities. Preliminary estimates indicate the cost of the project could be as high as $55 million.
The proposal to locate the potentially 250,000-square-foot facility at the Regional Sports Complex site surfaced after discussions with Rochester Community and Technical College leadership failed to produce an agreement on expanding indoor community recreation options on the campus. The discussions began after plans to include indoor recreation space at the Regional Sports Complex were abandoned because the cost far exceeded the $65 million in sales tax funding approved for the project.
Three Financing Plans Presented for Sports Dome
City staff will present three options to the City Council during Monday's study session.
Property Taxes Among Proposed Funding Sources
The first explores the use of property taxes. The staff report indicates a $50 million project would result in a 3.15% increase to the city's property tax levy, while a $60 million project would boost the levy by 3.78%. The levy would increase by more than 4.4% if the project cost rose to $70 million.
Sales Tax Law Could Help Finance Mega-Dome
The second option would take advantage of a change in state law that was enacted as part of the funding package used to build U.S. Bank Stadium in Minneapolis for the Minnesota Vikings. The provision allows cities of the first class to collect sales tax revenues for the full duration identified in the voter-approved referendum, even if the amount of money exceeds the total authorized through the referendum. Rochester, Minneapolis, St. Paul, and Duluth all qualify as cities of the first class.
Deputy City Administrator Aaron Parrish recently joined Andy Brownell for the Rochester Today Show on News-Talk 1340 KROC-AM and 96.9 FM to discuss the sales tax funding option for the Mega-Dome project.
Click on the link below to listen to the entire interview.
The sales tax extension approved by voters to fund the Regional Sports Complex, along with infrastructure and economic vitality initiatives, is authorized through 2047. City officials say the current sales tax forecast projects it will generate nearly $395 million before it expires after 24 years. The expenditures currently approved for sales tax funding total $241.5 million, leaving about $153 million available for "capital projects of regional significance," which could include a sports facility.
Lodging Tax Also Considered for Indoor Sports Facility
The final option involves using Rochester's existing 3% lodging tax. The presentation indicates the debt associated with the most recent expansion of the Mayo Civic Center is projected to be paid off in 2034, freeing up nearly $11.7 million in annual revenue once the project debt is retired.
The staff presentation requests that the City Council provide direction on whether elected officials wish to pursue any of the funding options and develop a community engagement process for the proposed project.
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