Nearly $2.24 million in tax-increment financing was approved Monday for a planned 180-unit mixed-income apartment complex in the Destination Medical Center district.
The Rochester City Council voted unanimously to authorize the public financing support with limited discussion.
The approval came weeks after the DMC Corp. board approved using $2.2 million in DMC state infrastructure funds to support the $39.3 million project.
Known as the Bryk on Broadway Apartments, the planned six-story building will be constructed at the intersection of Civic Center Drive and North Broadway, across from the Kemps dairy facility.
Under the development assistance agreement approved Monday, all units in the complex will be rented below market rate.
The 30-year agreement calls for 54 apartments to be affordable to households earning $50,000, which is 50% of the area median income. Another 18 units will be available for people earning nearly $61,000, with the remaining 108 apartments dedicated to households earning $78,500 a year, which is 80% of the area median income.
Catherine Malmberg, DMC Economic Development Agency’s interim director of economic development and placemaking, said last month the commitment to lower rents means developers will forgo approximately $8.7 million they could collect during the specified period.
The property was purchased last year for $2.15 million by Dirk Erickson and his mother, Marcia Bouquet. The developers, who are contributing $6 million in private equity, have reportedly identified a $4.44 million gap in financing for the project.
The TIF agreement is intended to overcome the gap with the requirement to keep rents below designated levels.
The TIF approval means developers will continue to pay property taxes on the site, but taxes for property value beyond the minimum assessment on Jan. 2, 2023, will be returned to cover financing cost. The payments will run for 15 years or until the designated amount is returned, whichever comes first.
The project is expected to start construction this summer with a potential opening in December 2022.