Seconded by Councilmember Doering. All in favor, say aye. Aye. Any opposed, say nay. Seeing none, we are now in our our Rochester Economic Development Authority, and call to order. We have no organizational business. Our consent agenda has our minutes from May 19. Is there a motion to approve the consent agenda? So moved. Moved by Councilmember Keane, seconded by Councilmember Miller. All in favor, say aye. Aye. Any opposed, say nay. Motion passes passes. We have no public hearings.
We have one, report and recommendations, which is the development assistance agreements relating to the Civic Center North apartment, project in TIF District Number 82. And, mister Josh Johnson and Brett Sunvi will will take this. Yeah. Thank you, council president, mayor, council members. So we've already had some discussion and some exposure to this item tonight, so I'll I'll keep my presentation tight. One of the things I wanna spotlight is that in 2022 when when we went out for an RFP, we were really looking to engage in a development partner.
And some of the high level criteria that we're looking for is, one, we wanted to maximize the the use of the city owned land. It's currently exempt and it's it's being used to, park cars along our riverfront. So we wanted to prioritize density. We also wanted to deliver meaningful riverfront improvements. A lot of our riverfront corridor there is being used for service parking lots. So we really wanted to provide greater access and, you know, beautification to our riverfront. We also wanted to provide affordable housing. This project obviously does all of those, objectives. And, you know, we've talked about the 341 units.
We've talked about the 76 units in deeper affordability. So 5030% AMI, which is which is deeper and requires a higher level of subsidy. But some of the other items I really wanna highlight are the seamless integration of the affordable housing with the market rate. I can't really think of any other projects that really combined those two items, as seamlessly as this project does. And also, by wrapping the parking garage, you know, provides a lot of benefit to that public realm to the downtown. It really hides, you know, that that,
critical aspect of the project. But when we talk about partnership, like, when we're looking at these and we're meeting with Sherman, we've been meeting with them once a week for several years now. We do look at it as a public private partnership relationship. They're investing a 140,000,000 on a less than two acre site in our downtown. That represents about a 10 to one public private ratio when we look at what we're providing in potential TIF increment and in our land assistance. With TIF, of course, it's performance based support. So TIF TIF payments are only made through new tax revenue generated by the project
itself. So it's really they're generating the revenue, we're deferring receiving that taxes and providing them over a period of time. With that, the developer is also suing the market risk. So they're bearing the uncertainty around future rent, growth, construction costs, interest rate, long term site performances. And, you know, we're a party to that. But like I say, they're bearing most of the risk. In terms of the public benefit it provides, of course, it's affordable housing. I I think Chris Osmondson used the term affordable principles earlier today and I really like that term. You know, what what benefits the affordable port portion also benefits the market rate portion and that's
access to transit. Link link rapid transit is gonna be right there, access to civic assets like the civic center, civic theater, art center. Like, those are all gonna benefit those entities by having, you know, more than 365 people living in that proximity. The other impacts, are or the other thing that I wanted to end on is, but for the market rate component, we wouldn't be able to support the affordable housing gap. With the change in the classification rates for affordable housing, it they generate very, very little in TIF increment.
So about eight and a half million dollars are being allocated from the market rate unit to the affordable unit. Without that TIF, they would be coming any other affordable housing developer presumably would be coming back with, like, an 8 and a half plus million dollar request and we'd have to find another way to fill that gap. GSIA has has been used, but if we use GSIA to plug that gap, then it leaves other projects that we've recently improved unfunded. So that's where you really need to be creative and pair these types of market rate and affordable housing projects together. And the benefit is we're getting affordable housing, but we're also getting 265 units of other housing for people to live in.
So with that really brief, explanation, I'll leave it for comments. Questions on this item. Council member King. What is the timeline on the affordable housing? Is this a twenty year commitment, '25? So the the the we have two development assistance agreements, as you know. So they're they're each twenty five years. The the affordable housing and I could look at Brent. I can't remember what it generates. I wanna say it's, like, $360,005.65. $5.65. So the affordable housing only generates 565 in increment, and that's over twenty five years. So it is a twenty five year commitment on the on the affordable housing?
Correct. Yep. Okay. For the affordable. It's actually would need to be thirty years. Sorry. I thought you meant the TIF District. The it's required to be in affordable housing for thirty years. Yeah. I guess the only thing I was saying is if the if the TIF District gets paid off earlier, it still maintains stays in the, the they're still committed to the affordable housing. And that's not based on TIF, that's based on bonds? Correct. Yep. Okay. Then the other thing I just wanna understand, I at first, I read this as they switched to 50 per or 50% AMI, but then there was a nuance that on average 50%.
So that means if there's two at 30%, there can be two at 70% and the rest at 50. What what is the is there a benefit to this to the city? Is this is the developer will come up with the their mix there? Or what what is our say in that? Just that we the only thing we're watching is that on on average, it's 50%. Yeah. It it it's, we've been seeing that more and more in order to make these capital stacks work. So 14 are gonna be at 30%. I believe 36 are gonna be less than 50%. And then the other is gonna be made up of 60%.
So, Okay. I'm I'm sorry. Just so I understand. That's in the agreement or that's a variable that they plan to use? I believe that was in the agreement for their, state bonding. Okay. So yeah. Okay. Thank you. Further questions? Councilmember Palmer. Help me out with the TIF. What's the TIF district length of time? Twenty five years. When's the last time we did twenty five years for any project? The last one that we've tentatively approved would be CityWalk. And how long is that for? Twenty five years? Twenty five years. And before that, fifteen was our typical TIF? It's hard to say typical.
So we we and I don't know if Brent can add any other color from, you know, historically. But, traditionally, we we we try to limit the amount of TIF term as, you know, low as possible. But we are in different market conditions with different interest rates, different, labor costs, construction costs, all those things. So, I don't know if miss Steinhaus has anything. I okay. I see, mister Svenvi. He can you go to the microphone and then and then we'll go to the Steinhild's house. So our the way the development agreement is written, it's we figured projecting what the project would generate in increment over twenty five years.
So the longest the district would run would be twenty five years. But if the city's obligation is paid off before twenty five years, our obligation to developers met. Or for some reason, the tax classes change and we don't pay out as much as we're projecting, when we get to that end of the life of the district, the district has to has to be decertified and we don't we won't payout the $13,100,000, which is projected. So so I guess where I'm going is a couple month a couple meetings ago, people were were making the assumption that that TIF is the first thing people are
asking for and that we're doing TIF and and should we be doing it. I I I go back to the YMCA old old lot that we have market rate there that they have no TIF. And when we've done TIF in the past for fifteen years and and and that seemed to be what we were we're leaning towards. So, again, this project just seems to be sucking a lot of our time and energy and money. And and I don't I mean, for 76 units doesn't seem to be a very good payback for the city. Miss Steinhauser. Yes. Thank you. Council president Schubert, mayor, members of council.
So twenty five years is not actually unusual. Other projects have been Wells Fargo, Hotel Indigo, Bergman. We have a list. We can provide you the ranges of where fifteen, twenty to 25. So I might just refer because, recently, you approved a new TIF an updated TIF policy. We drew from our historical approach to TIF to guide that policy. And so depending on the thresholds that they meet, if they qualify for a fifteen year, twenty year, or twenty five year TIF policy. And so this is in alignment with that policy that you've adopted. Is there a motion on this item?
I'll move to adopt a resolution approving the purchase and development assistance agreements between the Rochester EDA and Rochester Civic Lot Limited Partnership and a purchase and development assistance agreement between the Rochester EDA Authority and Rochester Tower LLC regarding the Civic Center North Apartments project associated with tax increment financing district number 82 Dash 1. Second. Moved by, Council Member Keane and seconded by Council Member Doreen.
Any further discussion? Council member Keen, you have the floor. Yeah. I guess I'll I'll just say, like, watching this process, it has been painful for me because there this is as we've talked that there's, you know, you get into this thing that we look to say, hey. We've got this valuable land, and we go through this RFA to get a a reputable and a competent capable builder to come in and do something. But then these other requests, the amount I I heard a 10% approximately. And to to my math, it's closer to 14 or 15%. The things that do make me feel a little better about this is that this
is not a, you know, a regular project. This is something that you this is not a stick built building that's five floors and then topped out. This is something that's really built more for the seventy to one hundred year type of thing. So this this is something that, we're, you know, we're investing into the the downtown. It'll be there of a long time. But this idea that we have kind of slowly drifted into this idea that, yes, we are supporting affordable housing units, and we're assisting developers getting those built. I think we do have to watch that after as we do this and then
we look at City Walk that we talked about before and, these these other ones that some have an affordable thing, some have less so, some have more. But at some point, I think we have to go back to our TIF policy and say, okay. Here's the where this is where we're at in a point in time now. What should we be doing going forward? But I do come prepared to support this one tonight. Any further discussion? Seeing none, all in favor, say aye. Aye. Any opposed, say nay. Nay. Motion passes six to one with, council member Point nay. Oops. With that, is there a motion to adjourn back to into the city council meeting?
So moved. Moved. Moved by council member Fredericks. Second. Second by council member Miller. All in favor, say aye. Aye. Any opposed, say nay. Aye. We, we are now you will. We