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Home My WebLink AboutDMCC Resolution No. 162-2025 (Authorizing the Establishment of a Tax Increment Financing District to Support the Development of the West Transit Village)DESTINATION MEDICAL CENTER CORPORATION RESOLUTION NO. 162-2025 A RESOLUTION AUTHORIZING THE ESTABLISHMENT OF A TAX INCREMENT FINANCING DISTRICT TO SUPPORT THE DEVELOPMENT OF THE WEST TRANSIT VILLAGE The following Resolution was offered by Paul Williams, seconded by Kim Norton. BACKGROUND RECITALS A. A critical component of the development plan adopted by the Destination Medical Center Corporation (“DMCC”) on April 23, 2015, as amended (the “Development Plan”) concerned mobility, transformative transportation strategies, and related development. The Development Plan highlighted the goal of a mode shift in which a significant portion of commuting trips downtown shifts away from single occupant vehicle trips and towards other modes. B. To implement these goals, the DMCC has provided significant approvals concerning mobility and transportation. By Resolutions 87- and 89-2019, the DMCC adopted a local preferred alternative for the route alignment and transit mode for the downtown bus rapid transit project now known as “LINK.” The DMCC has consistently emphasized the importance of a transit village destination anchoring LINK at its terminus. In Resolution 79-2019, the DMCC approved the location of mobility hubs and park and ride facilities, on the western end of the route now known as the West Transit Village. By Resolution 100-2020, the DMCC approved a boundary modification to adjust the development district, the geographic area in the City identified in the Development Plan in which public infrastructure projects are implemented (the “Development District”) to include the route and transit village location for Phase 1 of the locally preferred alternative. By Resolution 104-2020, the DMCC approved an application for funding to the Federal Transit Agency Small Starts Program for the LINK project. C. Under Minnesota Statutes, Section 469.45, the City of Rochester (the “City”) has authority to establish one or more redevelopment tax increment financing districts within the area of the Development District to fund public infrastructure projects. D. The DMC EDA and the City recommend establishment of a DMC tax increment financing district, pursuant to Minnesota Statutes, Section 469.45, subdivision 4, for West Transit Village (the “TIF District”) as further set forth in the attached Exhibit A (the “TIF District Proposal”), without seeking credit towards the City’s $128,000,000 local DMC contribution. E. The DMC EDA has recommended approval of the TIF District Proposal based on the summary and recommendation attached as Exhibit A and the DMCC must now act on the request. RESOLUTION NOW, THEREFORE, BE IT RESOLVED, by the DMCC Board of Directors that the DMCC approves the TIF District Proposal for the purposes of Minnesota Statutes, Section 469.45, 2 subdivision 4 and supports the City’s establishment of the TIF District, as identified in the TIF District Proposal, upon final approval by the City. BE IT FURTHER RESOLVED, that the approvals contained herein are expressly conditioned upon: 1. Further review and approval by the DMCC Board of Directors with respect to allocation of the TIF District increment to various West Transit Village site components, including, without limitation, private development. 2. The City and DMC EDA staff are requested to provide updates with respect to status of development of components of West Transit Village and allocation of the TIF District increment. BE IT FURTHER RESOLVED, that DMCC Resolution No. 51-2017 is incorporated fully herein by reference. BE IT FURTHER RESOLVED, that the Chair or the Treasurer of the DMCC is authorized to take such actions as are necessary and appropriate to effectuate the findings and approvals of this Resolution. 30659487v4 The question was on the adoption of the Resolution and there were YEAS and NAYS,as follows:--- BOARD OF DIRECTORS Destination Medical Center Corporation YEA Douglas M.Baker,Jr. James R.Campbell Kim Norton R.T.Rybak Randy Schubring Mark Thein Pamela Wheelock Paul D.Williams RESOLUTION ADOPTED on February 6,2025. amela Wheelock,Chair Destination Medical Center Corporation NAY OTHER 8 0 X X X X X X X X EXHIBIT A West Transit Village To: DMC EDA Board of Directors From: DMC EDA Staff Date: January 22, 2025 Request of the board of directors: Recommend to the DMCC that the City use DMC tax increment financing (TIF) district establishment authority for the West Transit Village, without crediting the TIF toward the City’s $128 million DMC obligation. It is estimated that the amount of tax increment that will be generated over the life of the TIF District is in the range of $40 million. Background: The DMC vision for the West Transit Village is to provide an authentic place for living, shopping and recreating (the “village”) in addition to the transit infrastructure that forms the western terminus of the BRT LINK corridor, which will leverage the opportunity to make the BRT journey better than a trip in a private single occupant vehicle. To realize this ambitious vision, Mayo Clinic, the City of Rochester, DMC, and the selected developer team of Kraus Anderson (master developer and market rate housing) and Aeon (affordable housing developer) have worked in collaboration for almost two years. A master plan has been developed by the development team in close coordination and partnership with Mayo Clinic, DMC, and the City of Rochester: To realize this vision will require additional infrastructure outside of the Federal BRT project scope as well as support for the housing components of the project. At this juncture there are over 42 different major components of the site that need to come together to realize the above vision. Partners are working together to fully develop a detailed matrix of those responsibilities and a schedule in order to maintain the overall project schedule which is built off of the expected opening day of the BRT system in 4Q2026. The next step in advancing this vision is to establish a TIF district that captures the area shown for the WTV. The TIF district must be established prior to permits being pulled for construction on the site. The anticipated first component of construction will be the Mayo 2,500-car parking ramp, which is scheduled to start in March 2025. Thus the TIF district needs to be established prior to March 1, 2025. The use of DMC TIF enables the flexibility needed to achieve the mixed-use development components shown as part of the overall vision. According to the City’s TIF plan for this site, it is estimated that the amount of tax increment that will be generated over the life of the TIF District is Approximately $45 million, less the deduction by the Office of the State Auditor. The City of Rochester would then determine, in partnership with DMC, how that increment would be allocated to various site components including private developments. Fulfilling the DMC Vision, Mission, and/or Goals: The DMC goal of mode shift for transportation requires a significant portion of commuting trips downtown to shift away from Single Occupant Vehicle (SOV) trips and towards other modes including Bus Rapid Transit. The West Transit Village is a key element of enabling the BRT to function well and provide an experience befitting the goal of DMC vision of a world class destination. The inclusion of affordable and market rate housing, as well as amenity and service retail is critical for this site if it is to realize the DMCC Board vision. Approvals, milestones, and decision points: - January 27, 2025: DMC EDA recommendation for the use of DMC TIF designation - February 6, 2025: DMCC considers the use of DMC TIF designation - February 19, 2025: City of Rochester EDA/City Council meeting establishing Economic Development District No. 84 and Redevelopment Tax Increment Financing District No. 84-1 for the West Transit Village Project (this includes the TIF Plan) - Ongoing: review of housing and infrastructure components of WTV site to evaluate against the TIF opportunity for potential request later in 2025