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HomeMy WebLinkAboutDMCC Resolution No. 170-2025 (Approving Downtown Historic District Infrastructure Project Request)DESTINATION MEDICAL CENTER CORPORATION RESOLUTION NO. 170-2025 A RESOLUTION APPROVING DOWNTOWN HISTORIC DISTRICT INFRASTRUCTURE PROJECT REQUEST The following Resolution was offered by Pamela Wheelock, seconded by Paul Williams. BACKGROUND RECITALS A. The Destination Medical Center Corporation (“DMCC”) established five long- term goals for the Destination Medical Center (“DMC”) initiative, including creating a comprehensive and strategic plan, new jobs, tax revenues, and achieving the highest quality patient, companion, visitor, employee, and resident experience. B. The DMCC has long recognized the important role of historic preservation to achieve these goals. The Development Plan adopted by the DMCC on April 23, 2015, as amended (the “Development Plan”) recommended strategies and programs to encourage preservation efforts: “The preservation of historic landmarks and districts is an important part of a City’s historic fabric. . . . As the DMC implementation process moves forward, we recommend the EDA work with federal agencies, state agencies and local organizations to evolve strategies and programs to incent historic preservation [in the] DMC District.” C. On January 22, 2024, the City of Rochester (the “City”) established a downtown commercial historic district of thirty-two properties (the “Commercial Historic District”) located within the development district boundaries as adopted in the Development Plan (the “Development District”). D. On May 23, 2024 the DMCC established a downtown property preservation program (the “Program”). The Program provides an application and general state infrastructure aid funding process for public infrastructure projects within the Commercial Historic District. E. The Program provides an opportunity of funding up to 50% of a capital improvement project (not to exceed $500,000 per property) within the Commercial Historic District if such project (i) meets the definition of a “public infrastructure project” (as defined in Minnesota Statutes, Section 469.40, subdivision 11); (ii) lies within the Development District and is defined as a “contributing property” within the Commercial Historic District; (iii) is consistent with the Development Plan; (iv) achieves a capital improvement that is intended to be a permanent asset of the Commercial Historic District; and (v) satisfies certain statutory requirements, including prevailing wages and use of American-made structural steel, as well as local requirements, such as sustainable building standard, women- and minority-owned construction contacting, and workforce development (collectively, the “Program Requirements”). F. The following project has been submitted for funding consideration under the Program: the owner of the property located at 324 S. Broadway has requested funding for a project involving adaptive reuse of a building through the development of 2nd story housing (the “Proposed Project”). 2 G. The Destination Medical Center Economic Development Agency has recommended approval of the Proposed Project based on the summary and recommendation attached as Exhibit A and DMCC must now act on the request. RESOLUTION NOW, THEREFORE, BE IT RESOLVED, by the DMCC Board of Directors, that the DMCC approves the Proposed Project costs based on the following findings: 1. The Proposed Project is a public infrastructure project within the meaning of Minnesota Statutes, Section 469.40, subdivision 11. 2. The Proposed Project lies within the Development District and is defined as a contributing property within the Commercial Historic District. 3. The Proposed Project is consistent with the Development Plan. 4. The Proposed Project achieves a capital improvement that is intended to be a permanent asset of the Commercial Historic District. 5. The Proposed Project will satisfy the necessary statutory and local requirements set forth in the Program. BE IT FURTHER RESOLVED, that the approval of the Proposed Project is expressly subject to the following conditions: 1. The Proposed Project must meet all City requirements. 2. The Proposed Project must meet all conditions set forth in Exhibit A. 3. The final payment will be based on the actual costs and will not exceed 50% of the cost of the Proposed Project. 4. The funds provided to the Proposed Project must satisfy the terms and conditions of this Resolution, including, but not limited to, the parameters of the Program and the Program Requirements as set forth in the Recitals, which are incorporated herein. 5. The recipient of the funds must provide certification that the Program requirements have been satisfied, including but not limited to the statutory and local requirements of the Program. 6. The DMCC Board shall receive an annual report concerning Program updates, expenditures, metrics to evaluate the success of the Program, and recommendations concerning future funding in the capital improvement plan. BE IT FURTHER RESOLVED, that DMCC Resolution No. 51-2017 is incorporated fully herein by reference. 3 BE IT FURTHER RESOLVED, that the Chair or the Treasurer of the DMCC is authorized to transmit this Resolution to the City of Rochester, and to take such actions as are necessary and appropriate to effectuate the findings and approvals of this Resolution. 31735610v2 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 Randy Schubring Mark Thein Pamela Wheelock Paul D.Williams RESOLUTION A OPTED on May 22,2025. rs,--eh. amela Wheelock,Chair Destination Medical Center Corporation OTHER 4 2 X X X Abstention X X X EXHIBIT A Downtown Property Preservation Program To: DMCC Board of Directors From: DMC EDA Date: May 16, 2025 Request of the board of directors: Consider the Downtown Historic District Infrastructure Project funding request. Recommendation: The DMC EDA recommends that the following project(s) be advanced to the DMC Corporation and City of Rochester for funding under the DMC Downtown Property Preservation Program. This recommendation follows review and evaluation of the project funding request(s). Specifically, the DMC EDA recommends that the DMCC and City: • Designate the proposed project(s) as a DMC “public infrastructure project” • Approve the recommended project(s) as consistent with the DMC Development Plan • Allocate DMC funding to the project(s) and in the amount(s) described in the table below Address Commonly Known As Project Description Category of Investment Total Project Cost Recommended DMC Funding 216 First Ave SW Bebap Korean Eats HVAC, exhaust, and ductwork Building System Upgrades $323,070 $161,535 324 S Broadway Above Fagan Studios Renovation of a 2nd story occupiable tenant space Adaptive Reuse $490,370 $245,185 22 3rd St SW John Kruesel's General Merchandise Tuck -pointing and roof replacement updates Building Safety & Preservation $254,078 $127,039 326-328 S Broadway N/A Foundation tuck- pointing Building Safety & Preservation $13,500 $6,750 TOTAL $1,081,018 $540,509 If approved for funding, the project(s) will be required to meet DMC development requirements, including: • Prevailing wage • American made steel • Targeted business and workforce utilization • Sustainable building standards Additionally, prior to the distribution of DMC funds the project(s) must: • Meet all City of Rochester planning, zoning and entitlement requirements • Provide project and financing documentation • Execute any necessary agreements with the City of Rochester (Funding made available on a reimbursement basis upon project completion) Background: In response to both the DMCC board and City Council supporting the Downtown Commercial Historic District, DMC and City staff prepared funding applications, webpages and marketing materials, and created shared processes to administer this program. In partnership with the City of Rochester, the Downtown Historic District preservation program was launched on July 1, 2024. Since that time, City and DMC EDA staff have engaged with the property owners and tenants of eligible properties to inform them of the various historic district property preservation programs. When the DMCC board of directors approved the historic district property preservation program, it did so with the following conditions, to which staff adhere: • Approval conditions: o Meet the DMC statutory definition of “public infrastructure project” o Proposed projects must result in a capital improvement that is intended to be a permanent asset of the downtown historic district o Proposed projects must occur at a contributing property of the current City of Rochester downtown commercial historic district, excluding properties owned by a public or Mayo Clinic entity • Funding guidelines: o DMC funding covers up to 50% of any eligible expenditure. o DMC funding be limited to a maximum of $500,000 per property, as determined by the parcel identification number (PIN) o To allow property owners and tenants maximum opportunity to prioritize capital investments, funding may be applied for and received more than once, subject to the $500,000 maximum described above o To align historic district construction activity with other major downtown improvements, including Link BRT and Bold. Forward. Unbound. in Rochester., program funding will remain available for request through December 31, 2029 or until rescinded by action of the DMCC. • Reporting and program evaluation categories: o Adaptive Reuse: Conversion of property use, such as office to retail or restaurant, or renovating vacant second-story space for housing or commerce, etc. o Building System Upgrades: HVAC, electrical, plumbing, etc. o Building Safety and Preservation: Exterior envelope sealing, accessibility improvements, etc. o Code Modernization: Improvements made to legacy properties in relation to ADA or other regulatory compliance, preparation of reuse, future reinvestment, sale, etc. Public Realm Update: The City of Rochester has selected Mend Collective to lead the Public Realm work outlined in the recent Request for Proposals (RFP). This initiative will result in a set of recommendations and strategies aimed at creating a cohesive, high-quality public realm that strengthens the identity and character of the Historic District. The scope may include wayfinding signage, interpretive historic markers, lighting enhancements, and consistent standards for street furniture. Kick-off meetings have already taken place, and DMC staff are actively collaborating with the city as part of the project team.