Rochester City Council Approves $18.2 Million in Tax Increment Financing for Proposed $150 Million Development

Rochester, MN (KROC-AM News)- The Rochester City Council has approved the creation of a new Tax Increment Financing District. 

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Councilmembers, acting in the roles as the city’s Economic Development Authority, unanimously signed off on creating the district to support a proposed development on Monday. 

The measure was brought before the elected leaders to support a new apartment development in downtown Rochester. 

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City Council Tax Increment Financing District to Support Development in Downtown Rochester

The Citywalk Apartment project planned at the southwest corner of 2nd Street and 6th Avenue Southwest on the former Just Rite Grocery Store property. The project calls for 340 residential units with structured parking. 

In exchange for the public assistance, the developer will enroll two adjacent existing apartment buildings into Olmsted County's 4D Affordable Housing Program, which will preserve 76 units of "naturally occurring affordable housing" for a period of 20 years, according to the agenda item. 

The new Tax Increment Financing District is expected to generate about $18.2 million in public assistance to support the $150 million project. 

The original proposal called for constructing a six-story building with 142 apartment units, but the developer significantly expanded plans after Mayo Clinic announced its $5 billion expansion of its downtown Rochester campus. 

Construction of the development is scheduled to start by the end of the year. It’s set to be completed near the end of the year 2027.