0:00One of the primary focuses of the meeting was the public hearing regarding Economic Development District Number 84 and the DMC redevelopment tax increment financing district number 841, an essential step for the West Transit Village project. The EDA underscored the importance of establishing the TIF district before issuing any construction permits, as this would enable the capture of future tax increments from the development. The project proposes the construction of approximately 300 market-rate units and 200 affordable housing units, emphasizing a mixed-use approach that aligns with Rochester’s broader urban planning goals.

As explained during the meeting, TIF is a financing mechanism that allows local economic development without reducing current tax levels. Instead, it captures the increased tax revenues from new developments to assist developers in overcoming financial obstacles. A motion to adopt the resolution establishing the TIF district was presented and passed without opposition, reflecting unanimous support for the project.

14:28Another portion of the meeting involved discussions on the current TIF policy framework, with a particular focus on the financial benchmarks required for project viability. A 25% internal rate of return (IRR) was highlighted as the standard for evaluating potential projects. The EDA stressed that city funding should be considered as the final component in the capital stack. This policy aims to maximize the effectiveness of city financial support, closing funding gaps for feasible projects.

Concerns were raised about Rochester’s relatively low TIF utilization compared to other communities, prompting discussions on establishing metrics to assess the risk of overextension in TIF projects. The EDA plans to monitor TIF developments more closely, providing updates to the council. These updates would include details on projects exiting TIF status and how these changes impact the city’s financial landscape over time.

The complexities of evaluating TIF in isolation were also discussed, with suggestions to adopt a holistic approach to understanding the total subsidy stack, including other subsidies or city properties involved in projects. This comprehensive view is important for informed decision-making and ensuring alignment with the city’s development priorities.

Affordable housing was another key topic, with discussions focusing on the need to address workforce housing and the requirements of those earning over 60% of the area median income. There was an acknowledgment of the importance of leveraging data from housing studies to guide policy decisions, with references to past studies detailing community housing needs.

In procedural matters, the meeting saw the approval of an amendment to the exclusive negotiating rights agreement with BGD5 Development LLC, concerning the former Michaels restaurant site. This amendment aimed to clarify previous misunderstandings by decoupling developer property from city-owned easements. The EDA’s approval of the amended agreement was confirmed.

0:00In addition to these discussions, routine items such as the designation of depositories for the EDA’s public funds and the approval of the 2025 budget were addressed. These resolutions passed unanimously.

The meeting concluded with a preview of the tax increment financing request evaluation matrix, intended to align the EDA’s considerations with council priorities. This internal document outlines criteria for assessing projects based on public benefits relative to the assistance received. The criteria emphasize financial equity, suggesting a benchmark of 15% developer equity, and categorize projects eligible for TIF assistance based on their duration and public benefits offered. No formal action was taken on this item, as it was presented for discussion and feedback to refine the criteria for future adoption.