HomeMy WebLinkAboutDMCC Resolution No. 185-2025 (Approving Amendment to Resolution No. 167-2025 in Connection with Request for Private Development Funding (Loom Apartments Project))
DESTINATION MEDICAL CENTER CORPORATION
RESOLUTION NO. 185-2025
A RESOLUTION APPROVING AMENDMENT TO RESOLUTION NO. 167-2025 IN
CONNECTION WITH REQUEST FOR PRIVATE DEVELOPMENT FUNDING
(LOOM APARTMENTS PROJECT)
The following Resolution was offered by Kim Norton, seconded by Mark Thein.
BACKGROUND RECITALS
A. Pursuant to Resolution No. 167-2025, the Destination Medical Center Corporation
(the “DMCC”) approved a joint funding application and allocation of funds in an amount not to
exceed $4,000,000 from the Strategic Development Fund (the “Approval”) to support the
development of the Loom Apartments Project, as further described in Resolution No. 167-2025
(the “Proposed Project”).
B. The Approval set forth various conditions that the Proposed Project must satisfy
(the “Project Conditions”), including, without limitation, a requirement that the Approval be
contingent upon the commencement of the Proposed Project on or before December 31, 2025 (the
“Funding Contingency”).
C. Onward Investors LLC has requested an extension of the Funding Contingency
until August 15, 2026, contingent upon satisfaction of all of the Project Conditions (the
“Request”).
D. As originally set forth in Resolution 167-2025, the Proposed Project continues to
sufficiently advance the goals of the Development Plan (as defined in Resolution 167-2025) and
satisfy the Evaluation Criteria (as defined in Resolution 167-2025).
E. The Destination Medical Center Economic Development Agency has
recommended approval of the Request 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 amending the Approval to authorize the Request, subject to compliance with the
following conditions:
1. The Approval, as amended pursuant to the Request, remains subject to all requirements
set forth in the Project Conditions.
2. The scope of the amendment to the Approval is as set forth in this Resolution.
3. Any further modification to the Approval will be subject to subsequent approval by the
DMCC.
BE IT FURTHER RESOLVED, that the Chair or the Treasurer of the DMCC is
authorized to transmit this Resolution to the City, and to take such actions as are necessary and
appropriate to effectuate the findings and approvals of this Resolution.
41202681v2
The question was on the adoption of the Resolution and there were 8 YEAS
and 0 NAYS, as follows:
BOARD OF DIRECTORS
Destination Medical Center Corporation
YEA NAY OTHER
Douglas M. Baker, Jr. X
Kristin Beckmann X
James R. Campbell X
Kim Norton X
Randy Schubring X
Mark Thein X
Pamela Wheelock X
Paul D. Williams X
RESOLUTION ADOPTED on December 10, 2025.
ATTEST:
Pamela Wheelock, Chair
Destination Medical Center Corporation
EXHIBIT A
Destination Medical Center Economic Development Agency
LOOM APARTMENTS
(ONWARD)
DECEMBER 2025
Requested Board Action
Authorize an extension of the $4 million GSIA allocation to this project until August 15,
2026, contingent upon the same project components as the original approval.
Highlights & Key Considerations
• $4 million of GSIA funding was granted to this project in May 2025 to support the
development of 141 units of affordable housing (100% of the units are income
restricted to those earning at or below 50% AMI).
• That funding was contingent on project commencement before year-end 2025.
• The developer’s bonding strategy did not work out to be able to stack everything
together for a 2025 project and the next round of bonding allocations is not until
January 2026, thus the developer is seeking at 270 day extension in order to close
and commence the project construction after the bond issuance in January 2026.
Background
The Loom Apartments project is a 100% affordable housing development on a Gateway
corridor location into the DMC District (515 4th Street NW, along Civic Center Drive)
that will provide 141 homes in the downtown at 50% of Area Median Income (AMI) rents.
This project is poised to serve as a key component in the region's commitment to
sustainable, affordable housing solutions as it would be the first private development to
utilize on-site geothermal wells to support heating and cooling. Loom Apartments will
serve as Phase I of a two-phase affordable housing initiative, and includes activation of
the ground floor including biking amenities and community-oriented commercial space.
Destination Medical Center Economic Development Agency
Key Project Elements:
• Number of Units: 141 deeply affordable housing units at 50% AMI.
• Funding Request: $5.5 million to leverage over $4.5 million in enhanced Low-Income
Housing Tax Credit (LIHTC) equity.
• Affordable Housing Financing: The project will utilize a combination of $24.7 million
in Multifamily Housing Revenue Bonds and $24 million in low-income housing tax
credits, investment tax credits, and solar tax credits. The development will also seek
gap funding from local and state sources to bridge the financing gap.
• Development Timeline: The project must commence before the expiration of the
Qualified Census Tract (QCT) designation, which is tied to securing critical federal
tax incentives and equity funding.
Attachments / Exhibits
Letter from Onward Investments requesting the extension.
To:
Catherine Malberg
Destination Medical Center Economic Development Agency
195 South Broadway
Rochester, MN 55904
Cc: Brent Svenby – City of Rochester, Josh Johnsen – City of Rochester
From:
Chris Osmundson
Director – Housing Development
Onward Investors, LLC
Subject: Request for Extension of GSIA Funding Timeline – Loom Apartments
Onward Investors respectfully submits this memorandum requesting a 270-day extension
of the General State Infrastructure Aid (“GSIA”) funding timeline for the Loom Apartments project in
Rochester, Minnesota. This request pertains solely to the commencement-of-development
schedule established under the Destination Medical Center Board of Directors May 22, 2025,
approval and does not modify any other element of the project, its approved scope, or its public
benefits.
The development team remains deeply appreciative of the continued partnership of the Destination
Medical Center Corporation (“DMCC”), the DMC Economic Development Agency (the “DMC” and
“DMC EDA”), and the City of Rochester (“COR”) in advancing this transformative, sustainability-
forward affordable housing community. We remain fully committed to delivering every element
previously reviewed and approved by the DMC Board of Directors and the City of Rochester.
Project Background and Current Status:
Loom Apartments will deliver 141 units of deeply affordable housing at 50% area median
income (“AMI”), located at approximately 515 4th Street NW along the Civic Center Drive Gateway
Corridor. The project represents the first phase of a proposed two -phase affordable housing
initiative, both low-income housing tax credit real estate development projects (“LIHTC”) and
remains fully consistent with all terms approved under DMCC Resolution – May 22, 2025, and the
City of Rochester’s supporting staff recommendation.
All approved features and conditions remain intact, including:
• Community-oriented ground-floor commercial/retail space (~2,100 sqft) offered at below-
market rent
• Enhanced ground-floor activation and walk-up housing along Civic Center Drive and 6th
Avenue NW
• A publicly accessible mid-block breezeway connecting the Kutzky Park neighborhood to the
downtown core
• Public EV charging, biking amenities, and a resident e-cargo bike library
• A closed-loop geothermal heating and cooling system paired with a rooftop solar array,
targeting LEED Silver certification and compliance with Minnesota SB 2030 energy
performance standards
Since approval, Onward Investors has:
• Maintained full site control across all necessary parcels (under contract through April 30,
2026)
• Advanced construction drawings to approximately 30 percent construction-ready
architectural documents
• Completed the Energy Design Assistance (“EDA”) report with Rochester Public Utilities and
Minnesota Energy Resources
• Undertaken value-engineering refinements yielding cost savings while preserving all
sustainability features
• Continued coordination with the COR and Olmsted County on right-of-way design,
transformer relocation, and bicycle/pedestrian improvements
Basis for Extension Request:
The requested 270-day extension is intended to align the proposed GSIA funding schedule
with the State of Minnesota’s tax-exempt bond allocation and closing calendar administered by
Minnesota Management and Budget (“MMB”), as well as Minnesota Housing Finance Agency’s
(“MHFA”) LIHTC process.
• The project will post required bond deposits in December 2025, with MMB allocations
anticipated in January 2026
• Receipt of those bonds will trigger an 180-day closing window, leading to financial close
and construction commencement by July 2026
• Construction is estimated to require 15–16 months, reaching substantial completion in Q4
2027 and full lease-up by early 2028.
This extension ensures that the Destination Medical Center’s $4 million GSIA investment remains
actively positioned for deployment once the project closes on its permanent financing. No
changes are proposed to the approved design, affordability commitments, or sustainability
measures. The extension will also preserve vital eligibility for key federal incentives, including the
designated qualified census tract (“QCT”) and energy-related tax credits (investment tax credits for
both geothermal and solar voltaic rooftop arrays), that underpin the project’s financial feasibility
and deliver the public benefits contemplated in the Board of Directors’ approval.
Continuing Alignment with DMC and City Goals:
Loom Apartments continues to exemplify the Destination Medical Center’s Development Plan
goals of:
• Providing affordable, workforce-proximate housing in a transit-oriented setting
• Advancing sustainability and innovation through geothermal, solar, and energy-efficient
design
• Activating the public realm along a critical downtown corridor with mixed-use and
multimodal investments
• Serving as a model project demonstrating how public infrastructure partnerships can
achieve climate and equity outcomes simultaneously
These outcomes directly fulfill the Evaluation Criteria cited in the DMC EDA’s May 2025 Evaluation
Report and remain unchanged in both scope and intent.
Onward Investors respectfully requests that the Destination Medical Center Economic
Development Agency and the City of Rochester support a 270-day extension of the GSIA funding
timeline for Loom Apartments. This modest adjustment will allow full coordination with state
financing processes and ensure that public funds are deployed efficiently toward the delivery of this
high-impact, community-oriented development. Onward Investors sincerely appreciate the
thoughtful engagement and steadfast support from Destination Medical Center Corporation and
City of Rochester staff in advancing Rochester’s shared goals of housing affordability,
sustainability, and inclusive economic growth. We look forward to continued collaboration as
Loom Apartments progresses toward groundbreaking.
Respectfully submitted,
Christian “Chris” Osmundson
Director – Housing Development
Onward Investors, LLC
cosmundson@onwardinvestors.com
(612) 201-8487