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HomeMy WebLinkAbout9/26/2019 DMCC Board of Directors Meeting - PresentationsDMCC Board Meeting September 26, 2019 Metrics Review –Tax Revenue DMC Goals and Tracking •Goal 1: Create a comprehensive strategic plan •Goal 2: Leverage the public investment of $585 million •Goal 3: Create approximately 30,000 new jobs •Goal 4: Generate approximately $7.5-8.0 billion in new net tax revenue •Goal 5: Achieve the highest quality patient, companion, visitor, employee and resident experience Goal 4: Tax Revenue Growth: City of Rochester •Compared to 2012, the three tax streams above contributed $35M more to the City of Rochester (goal is $271M) •Lodging tax –44% growth •Sales and Use Tax –72% Growth (includes DMC 0.25% tax in 2016) •Property tax –23% growth Goal 4: Tax Revenue Growth: Olmsted County •Compared to 2012, the two County tax streams contributed $56M more to Olmsted County (goal is $218M) •Property Tax –22% growth •Sales Tax –100% Growth (established in 2014) Goal 4: Tax Revenue Growth: State of MN •Compared to 2014, tax streams in 2017 contributed $111M more to the State of MN (goal is $1.9-2.2B) •State Property Tax –7% growth •State Use Tax –6% growth •State Sales Tax –9% growth •Rochester Income Tax –14% growth Key Questions •City of Rochester and Olmsted County: 1.What is the impact of new development on property taxes? 2.Is there a better indicator (like estimated market value) to use for development activity beyond property tax data as these are largely tied to the city’s tax levy? 3.How can a concise story be told about the impact of development with or without the use of TIF? •State of Minnesota: 1.What is the impact of corporate income taxes? 2.Is the DMC project on track to meet its $7.5-8 billion tax revenue goal? 3.What other impacts of the project are not considered in the current analysis? Next Steps 1. Confirm data and assumptions 2. Address outlined questions 3. Schedule •November 12, 2019: Progress Update •February 6, 2020: Final Report WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor ©2 0 1 9 C l i f t o n L a r s o n A l l e n L L P Destination Medical Center Corporation September 26, 2019 ©2 0 1 9 C l i f t o n L a r s o n A l l e n L L P Create Opportunities IRS Form 990 •Financial information reconciles to DMCC’s audited financial statements •Part III (page 2) –statement of DMCC’s organizational purpose •Part VI (page 6) –governance •Part VII (page 7) –board members 2 ©2 0 1 9 C l i f t o n L a r s o n A l l e n L L P Create Opportunities IRS Form 990 •Schedule B (page 22) –contributors •Schedule R (page 31) –related organizations •No unrelated business income for 2018 •Filing deadline is November 15, 2019 3 ©2 0 1 9 C l i f t o n L a r s o n A l l e n L L P Create Opportunities Charitable Organization Annual Report •Filed with Minnesota Attorney General’s Office Charities Division •No changes in tax-exempt status (page 1) •No changes in organizational purpose or programs (page 1) •No changes in ability to solicit contributions (page 2) •No compensation paid in excess of $100,000 (page 2) •Filing deadline November 15, 2019 4 ©2 0 1 9 C l i f t o n L a r s o n A l l e n L L P Create Opportunities Minnesota Non-profit Corporation Annual Registration •Filed online with Minnesota Secretary of State •In good standing through December 31, 2018 •Annual renewal to be filed (online) for 2019 5 ©2 0 1 9 C l i f t o n L a r s o n A l l e n L L P Create Opportunities Thank you for allowing us to serve you! Contact Information: Craig Popenhagen, Principal Katherine Lutzke, Senior 507-280-2327 507-280-2314 Craig.popenhagen@claconnect.com katherine.lutzke@claconnect.com 6 Downtown Circulator Locally Preferred Alternative Destination Medical Center Corporation Board of Directors Meeting September 26, 2019 Downtown Circulator Locally Preferred Alternative DMC Development Plan & City Comprehensive Plan Downtown Circulator Locally Preferred Alternative Integrated Transit Studies Downtown Circulator Locally Preferred Alternative Mode Shift –Reducing Single Occupancy Vehicles Downtown Circulator Locally Preferred Alternative 2017 2020 Today 2018 2019 Approval of Integrated Transportation Studies (ITS) June 2018 Approval of Mobility Hub Evaluation Criteria Nov. 2018 Approval of Transit Village Locations Feb. 2019 Approval of Route and Mode Evaluation Criteria May 2019 Review of Route and Mode Recommendations Sept. 2019 Circulator Project Timeline To Date Downtown Circulator Locally Preferred Alternative •Today’s Purpose •Review and act on staff recommendation for Transit Circulator Alternatives •Alternative 1 •RT on 2nd Street and 3rd Avenue •Alternative 2 •RT on 2nd Street and Broadway •Alternative 3 •Streetcar on 2nd Street and 3rd Avenue •Alternative 4 •Streetcar on 2nd Street and Broadway Downtown Circulator Locally Preferred Alternative Station Locations are preliminary and likely to be reduced and changed as the design evolves Downtown Circulator Locally Preferred Alternative Modes Under Consideration Rapid Transit (RT)Modern Streetcar Visualization of Circulator in Rochester-2nd St and 6th Ave Downtown Circulator Locally Preferred Alternative •Thursdays Downtown •Presentations and discussions with community organizations •Survey •DMC Lobby Talks 2019 Public Engagement Downtown Circulator Locally Preferred Alternative •Ridership •Daily ridership •Zero-car households •Bus network compatibility •Connections to key destinations •Costs •Capital •O+M •Cost per rider •Economic Development •Available land •TOD •Land use plans •Existing pop. and employment •Future pop. and employment •Environmental Impact •Historic/cultural resources •Park, Right-of-way impacts •Pedestrian/bicycle network Evaluation Criteria Downtown Circulator Locally Preferred Alternative Two assessed routes: •Broadway Avenue •Third Avenue SE Similarities: •Bicycle connectivity •Route development costs •Ability to create a healthy and active community •Jobs within ½ mile radius •Low impact to park land Route Analysis: Transit Line Route Selection Downtown Circulator Locally Preferred Alternative Route Analysis Broadway Ave. Opportunity Challenge Access to Soldiers Field, future UMR campus, and Discovery Square Less desirable access for neighborhoods adjacent to Third Avenue Primary transit corridor with TOD zoning Vehicle impacts associated constructing a designated transit lane. Greater consistency with land use plans (City comp. plan, DMC plan, others) Disconnection of some parcels due to railroad & river. Third Ave. SE Opportunity Challenge Better Access to Government Center, City Hall, Library and Civic Center Current zoning not as conducive to TOD as Broadway Ave. Access to neighborhoods adjacent to Third Avenue Not consistent with current land use plans Neighborhood impact of construction and future redevelopment Downtown Circulator Locally Preferred Alternative Two assessed modes: •Modern Streetcar (Streetcar) •Bus Rapid Transit (Rapid Transit) Similarities: •Low impact to park land •Operations •Travel time •Station wait times •Fixed routes •Dedicated lanes of travel •Economic Development Transit Line Mode Selection Downtown Circulator Locally Preferred Alternative Transit Line Mode Selection Rapid Transit Compared to Streetcar Evaluation Criteria Rapid Transit Streetcar Capital cost x Weather Disruptions x Mode Appeal x Land Impact x Visual Impact x Noise & Vibration x Implementation Schedule x Downtown Circulator Locally Preferred Alternative •Bus Rapid Transit (Rapid Transit) •Broadway Avenue Staff Recommendation Downtown Circulator Locally Preferred Alternative User Experience Similar •Level Boarding •Quick Loading and Unloading; and •Station Based Fare Payment Future Flexibility •Future Adaptation •Response to Route Disruptions Feasibility •Cost •Competitive FTA Application Integration with Previous Plans •Consistent with 2024 Comprehensive Plan •TOD Zoning Economic Development & Neighborhood Impact •UMR/REC Zone •Discovery Square •Minimizes Neighborhood Disruptions Staff Recommendation Dedicated Lanes Runningway improvements can vary. Ideally, runningways would be exclusive to only transit vehicles; however, in more constrained areas, vehicles operate in mixed traffic with minor spot improvements. Downtown Circulator Locally Preferred Alternative Rapid Transit Features Off-Board Fare Collection Off-board fare payment speeds boarding and increases convenience. Fare enforcement enhances accountability. Identity / Branding Off-board fare payment speeds boarding and increases convenience. Police enforcement enhances security. Unified Station Design Stops are upgraded to premium stations with enhanced amenities and information kiosks. Downtown Circulator Locally Preferred Alternative Rapid Transit Features Specialized Electric Vehicle Design Electric Vehicles have a unique look that is distinct from regular local and express services. Vehicles have multiple doors. Signal Priority Signal priority allows vehicles additional green time to minimize delay and increase speed. Downtown Circulator Locally Preferred Alternative Rapid Transit Features Service Plans / Frequency Limited stop service plans respond to corridor demand. Vehicles would run every 10 minutes or better, 7 days a week. Rapid Transit Every 10 Minutes Local Service Every 30 -60 Minutes Station Size & Amenities Stations and boarding platforms are sized to projected passenger demand and available space. Amenities will include: •Level Boarding, •Transit Information, •Snow Melt Systems, and •Radiant Heating. East Transit Village Concept East Transit Village Concept East Village Transit Concept Downtown Circulator Locally Preferred Alternative 2019 Locally Preferred Alternative (LPA) & Entry Letter Schedule •September 23 •City Council Study Session -COMPLETE •LPA Review •September 26 •DMC Corporation Board Meeting •LPA Approval •October 1 •Olmsted County Committee of the Whole •October 7 •City Council Meeting •LPA Approval •Project Development Financial Commitment •Post October 15th •Submit Entry Letter •LPA •PD Financial Commitment •Submit Class of Action for the Environmental Review •December 2019 •Procure Engineering Team for Project Development •October 2019 -October 2020 •TOD Planning Grant: Station Area Planning Downtown Circulator Locally Preferred Alternative 2019 2025 Today 2019 2020 2021 2022 2023 2024 2025 Submit Project for Potential Future Federal Funding (Entry Letter) 11/15/2019 Begin Engineering Development & Environmental Review 12/16/2019 Submit Project for Federal Funding (Small Starts Application) 9/4/2020 Obtain Environmental Clearance 6/2/2021 Federal Funding Obtained (Grant Agreement) 3/22/2022 Begin Construction 7/5/2022 Begin Transit Service 3/3/2025 Circulator Project Timeline 2020 DMC Corporation Funding Request Funding Request Components •Capital Improvement Program •DMC EDA + City Staff Workplan and Budget •DMCC Operating Budget •Working Capital Loan Funding Request Framework Capital Projects: •Pursue projects consistent with DMC Development Plan and current priorities •Finish projects already approved and underway •Use “pay-as-you-go” public finance model as a primary financing tool, but consider bonding or lending when appropriate •Focus on time-sensitive, shovel-ready projects •Be responsive to community priorities and market demand •Leverage other sources of funding •Achieve balance between public realm, public infrastructure, and transportation •Consider medium-and long-term capital and infrastructure needs prior to committing resources Funding Request Framework Programs & Operations: •Fulfill responsibilities assigned to DMC EDA by Minnesota Statutes 469.40-469.47 •Successfully implement DMC Development Plan •Advance approved strategic priorities •Achieve Outcomes in annual work plan •Incorporate complementary planning and implementation activities assigned to the City of Rochester DMC Project Management Team Process •June/July: DMC EDA + City Staff •August: Board Volunteer Advice •September: Board Consideration •October: Rochester City Council Approval DMC Transit Aid $119,000,000 DMC Sales Tax $128,000,000 DMC Construction Sales Tax Exemption $14,000,000 DMC State Aid $327,000,000 Destination Medical Center 2020 Capital Plan DMC Funding Sources ($585 Million) DMC State Aid $28,716,898 71% DMC Sales Tax $6,777,171 17% DMC Transit Aid $5,072,000 12% Destination Medical Center 2020 Capital Plan $40,556,069 DMC FUNDING SOURCES Operations and Implementation $3,617,171 9%Statutory Requirement $1,000,000 3% Common Ground $13,100,000 32% Infrastructure $10,916,898 27% Transit $11,932,000 29% Destination Medical Center 2020 Capital Plan $40,556,069 DMC FUNDING USES 2020 Streets and Sewers $10,916,898 Highlights •Sewers$6,536,898 •Streets$4,000,000 •CirculatorPrototyping$250,000 2020 Capital Improvements 2020 Common Ground $13,100,000 Highlights •Heart of the City$9,000,000 •Discovery Walk$2,800,000 •Chateau Theatre Improvements$100,000 2020 Transit $11,932,000 Highlights •Arrive Rochester TMA$260,000 •Circulator route development$3,872,000 •Transit Villages$5,000,000 2020 Statutory Requirements •DMC Development Plan Update $1,000,000 2020 DMC EDA Operating Budget •Request to DMCC:$2,570,146 (YOY decrease: $1,259, or approximately 0.5%) •Mayo Clinic Support:$1,313,742 (YOY increase: $38,338, or approximately 3%) •McKnight Foundation Energy and Sustainability Program Support:$92,5000 •2020 City of Rochester DMC Project Management team:$660,525 Heart of the City Next Steps •Approval of 2020 CIP to support construction implementation in 2020-2021. •Completion of “Business First” construction documents- November 1, 2019 •Project bidding-November –December 2019 •Project construction 2020-2021 •Business support strategies in place and operational Chateau Theatre Progress and Next Steps •Exhibits Design Group (EDG) was selected by the Rochester City Council. •THE MAGICAL HISTORY TOUR | A BEATLES MEMORABILIA EXHIBITION will be the first exhibit-anticipated to be open late fall. •Capital improvements are in progress (enhanced lighting, etc.) •EDG has started their outreach strategy in Rochester and are working with a variety of stakeholders in the community. Discovery Square Live-Work -Play Living in Discovery Square Recent activity •The Residence at Discovery Square comes online later this year –residential and retail. •The Maven on Broadway has occupied residential units even as construction is completed –residential and retail. •324 Apartments construction started Next steps •Assist with creating market awareness of residential and retail opportunities for all Discovery Square properties. Playing in Discovery Square Next steps •Launch design development work in 2020, aiming for 2021 construction. Recent activity •Discovery Walk Stakeholder group is convening regularly, providing the DMC team with valuable insight and support. •Prototyping activities took place on Sept 19th, survey feedback being analyzed. Working in Discovery Square Recent activity •Entrepreneurial programming with various groups. •Design Thinking Workshops at regional universities. •Tenant recruitment for Discovery Square. Next steps •Launch Assistive Tech Challenge 2.0 planning. •Programming to integrate new Discovery Square businesses into the community. •Bridge space plan to hold us until new space available. •Consider how to develop low cost space for startup companies. Di s c o v e r y W a l k Kellen Collider Mayo Clinic Business Accelerator Maven on Broadway 501 on FirstResidence at Discovery Square Hilton & Guggenheim Stabile Mayo Opus The Discovery Square Canvas in 2015… …and room to grow Medical Sciences China Hall Harwick Baldwin Metro Mkt Place 514 Broadway 324 Apartments Discovery Square 2 One Discovery Square Premier Bank 2 One Discovery Square -Update 3 One Discovery Square -Keys to Success Unique relationship opportunities with Mayo Clinic Culture of Collaboration Fostering an ecosystem to advance innovation for patient care Iconic Architecture/Design and Amenity Spaces 4 One Discovery Square –Leasing Update MOTION MEDICAL 5 Discovery Square 2 -Overview GSF: 123,654 / RSF: 117,236 5 stories Construction Period: 18 months Total Investment $45,000,000 6 Discovery Square 2 –Unique Features Iconic architecture Additional investment in the infrastructure The Link Large indoor/outdoor amenity spaces Wired Score Infrastructure to accommodate wet lab 2 Affordable Housing Affordable Housing 2019 DMC EDA Workplan Objectives Objective A: Strategy Development 1.Current progress and needs 2.Identify high-potential parcels in the DMC District 3.Confirm opportunities available to DMC 4.Leverage community partners 5.Continue to engage in community activities related to a workforce housing strategy 6.Develop and share goals for DMC District units of affordable and senior housing Objective B: Project Development 1.Attract/recruit affordable housing developers to DMC District and Rochester market 2.Partner with the City to evaluate opportunities for property within the DMC District 3.Coordinate activity with other priorities and plans 4.Identify and leverage public and private partners 2019 DMC EDA Workplan: Progress to Date 1.Strategy Development •Maxfield Study Update –late 2019•Parcel Analysis –completed•Housing Coalition participation ongoing 2.Project Development •Met with five entities interested in developing affordable housing since early 2019•Real Estate Summit –Affordable Housing component•Parking Ramp 6 –Commonbonddeveloper selection•Transit-Oriented Development Study –includes affordable housing strategy Commonbond Housing Concept •Key Project Information: •Non-profit affordable housing developer that couples services with development •High-rise construction •Number of units and rents: •127 units –13 studio, 76 one bedroom, 38 two bedroom •Rents between 30%-80% AMI. •Studio rent range -$492-$1,314 /mo •Income averaging approach used for first time in Rochester •Anticipated Completion Schedule: Early 2023 DMC Development Plan Five Year Update Background •The DMC Act requires that the DMC Development Plan be updated at least every five years •The DMC Corp. board approved the current DMC Development in 2015 •Since 2015, significant additional planning and programing has been completed that complements the current DMC Development Plan •The DMC Development Plan will be updated in 2020 DMC Development Update 2020 DMC DEVELOPMENT PLAN Proposed Framework for DMC Development Update •Build consensus around goals and guiding principles •Refresh out-of-date sections of current plan •Incorporate recently completed plans •Address contemporary community priorities, including affordable housing and workforce development 2019 Progress & Next Steps •Progress: •July-August: Review of planning documents •July: Group interviews with economic development stakeholders •July-September: Staff refinement of proposed framework and table of contents •Next Steps: •September: Board reviews and discusses proposed plan update framework •October: Staff refines scope and budget •November: Board reviews and discusses proposed update scope and budget 1 Mobile App Update •Mayo Clinic +Destination Medical Center +Experience Rochester •Unique one-of-a-kind partnership •Used data, research and discovery to develop an innovative mobile app that can best serve our community members, patients & visitors. •DMC Goal #5: Ideal community member, patient and visitor experience •Why a mobile app? •Started with a review of gaps in experience, best practices, unique needs of Rochester community DMCC Board Meeting September 26, 2019