TIF for the Holiday Inn Project?

Should the council grant Tax Increment Financing for the Holiday Inn Project? Here are the questions I have send to staff and the council that I feel need to be answered.


My thoughts, please share with the council. While I am open to TIF, I want to make sure we are getting sufficient benefit and this passes the “but for” test. Here is what we need to resolve:

Aaron, please add to the COW packet.

1) Is the tunnel really worth it? – This areas should be pedestrian and transit oriented at the street level. The actual future DMC transit center is not served by this tunnel. The tunnel is incredibly expensive, and does not replace the need for safe street crossings at 11th, 12th, 2 main St. Marys doors, 14th and future 16th. Because of a number of issues serving even a minimal amount of properties this may be a $4 million project. That is better put into 2nd street crossings and street scape.

2) This is already an incentive development requesting many variance. There is not problem with that, and frankly that is probably a good thing to get substantial dentist here. However we do expect a higher level of development in exchange for that incentive density. We should not use TIF to pay for items which we should be receiving in exchange for the incentive. I would ask staff / Springsted to clearly indicate whether items included are truly beyond the scope of what should be required for incentive.

3) Lets ensure parking has a public benefit. While I would prefer to own ramps we put money into, we should at-least grab sufficient revenues to compensate the public. Further we need to have sufficient control to ensure short term business parking is alway available before long term car storage is allowed. Having parking infrastructure in place to support a vibrant business district is a public benefit. Parking Mayo Employees and Consultants all day is not. We must ensure if we are putting TIF in for parking we control the public spots well enough to ensure value.

4) Reduce costs by thinking outside the box. The developer is claiming much higher costs because he must build in place rather than using precast. Why don’t we work with him to get a crane on 2nd for a short period of time. If this is a substantial cost driver, I would rather have a little short term congestion than throw millions in TIF at the project to offset the added costs of not being able to use precast. I have asked for an estimate of what precast would save, but don’t yet have that answer.

5) Lets make sure we are covering only costs that pass the “but for TIF” question. This is  a great question for Springsted. Lets make sure that we are truly applying TIF for items that go above and beyond that normal costs of construction. In particular I would ask Springsted to take great care to ensure the TIF we are providing is not going to cover unreasonable acquisition costs. If that is where the TIF dollars are really going we are guilty of inflating properties in Rochester.


“Michael, Terry S. mentioned to me that Mitch from the EDA should be requested to provide an opinion on #5 below since his position is to work on some of that information. Mitch and Terry may be able to provide such information if this project proceeds further. Steve”

6) We need to follow through on previous considerations. In particular there have been a lot of agreement that we would make sure there was a very good street scape, and I believe that will infect happen. However no TIF should be granted for enhanced street scape until the council has concluded that the street scape is in fact beyond what we could already expect from an incentive development.

In short, I am willing to support TIF, but only after staff and Springsted has clearly articulated that the TIF:

  1. offers clear public benefit beyond what we would expect for incentive development.
  2. passes the “but for” test.
  3. is not being used to subsidize artificially high land acquisition costs.

I hope we do continue to work with Larry as he has been patient and is trying to be a good community partner. He has faced many challenges, some of which were self inflicted based on poor advice.

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