ROCHESTER – A $257 million riverfront project barreling toward approval in Rochester's Destination Medical Center zone has all of the hallmarks planners wanted: deep-pocketed private investors, towers that help transform the city's skyline, a healthy contribution to city tax collections, and new connections to the city's mostly dormant riverfront.
It's a "home run" of a project, in the words of DMC Board Member R.T. Rybak, and two public hearings this week will raise the likelihood that construction on Bloom International Realty's riverfront development could begin later this year.
The 925,000-square-foot development would blend senior housing, condominiums, public spaces, retail, restaurants, parking and a five-star hotel topped with a private VIP suite in the $5.6 billion DMC plan's largest project yet.
Some city planners and residents worry that the scope of the project is too much, too fast, said Rochester City Council Member Nick Campion.
"It's a microcosm of the promise and pressures associated with a community going through this economic development," said Campion.
Two towers, one 22 stories and the other 26, would fit like puzzle pieces into a sliver of underdeveloped city land, neatly filling in a space bordered by the river, a senior high-rise, a major roadway and other commercial buildings.
Architectural renderings of the towers show glass-encased pillars rising high over the South Fork Zumbro River along with a riverfront park and green spaces overlooking the water.
"A lot of people see the pictures and just say, 'Wow,' " said Campion.
The 2.47-acre site sits adjacent to the Zumbro between 2nd and 4th Streets SE., just east of S. Broadway.
The shorter tower could get underway later this year and would include 215 units of senior living, retail and parking. The second tower could break ground in 2020 and include 181 four- and five-star hotel rooms and suites, condominiums, retail space and parking. The first tower could be completed by 2021; the second by 2023.
The project is likely to pass a City Council review on Monday, which includes a vote to extend Bloom's exclusive negotiating rights to the site through July 15. The Abu Dhabi-based developer has had exclusive rights to the five city-owned waterfront parcels since 2015. It also bought the adjacent Associated Bank building for $7 million in 2013.
A local representative for Bloom, Mark Dickson, the CEO and president of Rochester-based Oxford Management, did not respond to a call seeking comment.
The project also comes before the DMC Corp. board on Thursday for review.
"I'll be looking, especially, [at] how this delivers on the original promise of connecting to the river and creating more space everyone can enjoy, not just those who are part of the project itself," said Rybak, the former Minneapolis mayor.
Rybak has been pushing Rochester to develop more mass transit and to protect pedestrian- and bike-friendly neighborhoods. He said the city's recent efforts have impressed him.
A traffic impact report found no adverse effects on downtown traffic from the project.
Still, the city's fear of losing contract parking spaces led to a design that violates some of the Destination Medical Center guidelines, said Lindsey Meek, a civil engineer and member of the city's Planning and Zoning Commission. The city will lose a city-owned parking ramp when it sells the riverfront site to Bloom, and in anticipation of losing those contract parking spots, city officials asked Bloom to add more parking to its final design, Meek said. Bloom's latest plans show 498 parking stalls in the two towers, with 228 of them reserved for the city on monthly leases.
Meek said she asked a Bloom representative if the project would have included 498 spots if not for the city's request. "With no hesitation, he quickly and firmly responded, 'No,' " she said.
The additional parking spots likely made it more difficult for Bloom planners to obscure the parking ramp with pedestrian walkways and retail spots around its perimeter, as directed by DMC guidelines, Meek said. She was the only no vote when the plan came before the Planning and Zoning Commission in February.
"If the developer were given the freedom to build only as much parking as the market demanded to support the users of the building, the project would likely be able to achieve the DMC Design Guidelines for parking structure design," Meek said.
Bloom applied for $20 million in tax increment financing (TIF) for the project, saying it couldn't do the project without some public assistance. TIF projects capture increased tax revenue from a development to help pay for it. The subsidy request is under review, and likely won't come before the City Council until midsummer, according to city officials.
The developer argued in its request that its project could generate about $2.4 million in annual property taxes compared to $181,222 at present.
The parcels are currently occupied by a surface parking lot, the city-owned ramp and a brick commercial building that's home to office space and Legends Bar and Grill. The land's value has skyrocketed since 2015, in part because a once-every-six-years valuation cycle kicked in recently, according to Olmsted County officials.
The Olmsted County property office valued one of the parcels at $91,500 in 2015, but rewrote that as $619,900 a year later. The value of all five parcels rose to $5.5 million last year.
Even with parking concerns, the TIF financing, and rising land prices, the Bloom project fits neatly into the city's hopes for its riverfront and downtown, said City Council Member Michael Wojcik.
It will take property that's not generating much for the city and turn it into some of the city's most valuable property, Wojcik said.
"We're talking about the give-and-take on a nine-figure project in our downtown area. It's not necessarily easy to figure out the public benefit on this, but if the alternative is to be a dying community, I'll take it every time," he said.
Matt McKinney • 612-673-7329
