A proposed apartment complex in the middle of an industrial zone left the Rochester City Council too divided Mondayto give it thumbs up or thumbs down.

The 164-unit complexdubbed Technology Park Apartments would be located on the north side of Technology Drive Northwest between Valleyhigh Drive and West Circle Drive. Its neighbor to the east would be Benchmark Electronics, 3535 Technology Drive NW.

Developer Nate Stencil said the project emerged from an effort to build affordable housing, without reliance on state funding.

"We see a huge demand for the more affordable units in our buildings," he said, noting the goal is to build more apartments at lower prices.

The property in the Technology Park north of Costco came at a reduced price that allowed the project to move forward.

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Greg Johnson, senior planner for the Rochester-Olmsted Planning Department, said the reduced property value is due to the nature of the city's zoning practices, which reserves areas for future industrial expansion.

"That's intended to keep those land values down for industrial sites," he said.

Competing options

Rochester City Council President Randy Staver questioned whether the specific area may be better suited for other uses, citing the diverse businesses that have cropped up along West Circle Drive.

"Maybe it's not the industrial that's not appropriate for this area any longer," he said.

While council member Michael Wojcik noted it's not an ideal site, he said it meets a growing demand for affordable housing, which has been a council priority.

Council member Nick Campion agreed the creation of affordable housing is a priority, but noted there must be limits.

"We do have to have some threshold here on how we are going to make it happen," he said.

Council members Ed Hruska and Mark Hickey indicated the threshold should be based on the location.

"If this wasn't affordable housing, I don't think we would be discussing putting housing in the middle of an industrial zone," Hickey said.

Earlier split

The division isn't new for the project.

The city's Planning and Zoning Commission split 4-3 on its recommendation to deny a conditional-use permit, noting the plan was at odds with zoning.

During the May 24 meeting, Commissioner Michael Walters voiced concern about the location.

"I think the need for affordable housing, as serious and compelling as it may be, does not mean discarding some of the really important goals of why we plan and zone in the first place," he said.

Commissioner Peter Castro, however, supported the mixing of residential into industrial as a way to keep costs down.

"I think it's very creative and we have to think like that," he said.

Commissioner Wade Goodenberger pointed out the commission's goal is to make a decision based on criteria in city policy, which does not include housing cost. He said it is up to the council to determine whether other factors sway the final outcome.

"The city council is going to weigh some things we do not, such as the affordable housing issue," he said.

Affordable needs

Monday, Steve Borchardt, housing initiative director for Rochester Area Foundation, urged the council to do just that, noting 36 percent of Olmsted County households, regardless of the number of wage earners, produce annual incomes of $50,000 or less. About 25 percent earn less than $35,000 a year.

Stencil said 40 percent of the Technology Park Apartments would be affordable to people making 60 percent of the area's annual median income, which is roughly $40,000 a year. Borchardt estimated that would mean about $1,000 a month for a two-bedroom apartment.

The remaining 60 percent of units would either be affordable for someone earning 70 percent of the area's annual median income or priced "far under market rates," which Stencil said is at least $100 below a similar apartment in Rochester.

Borchardt noted the need for housing affordable to the local workforce is needed as the city grows.

"For the last two years, you've approved somewhere in the neighborhood of 5,000 units," he told the council. "Well less than 10 percent of them have been in this workforce price range."

Monday's council meeting ended with a decision on hold until July 5. Staver, Wojcik and council member Annalissa Johnson supported a permit for the apartments, but Campion, Hickey and Hruska did not, noting housing is not appropriate the area zoned for industrial uses. Council member Mark Bilderback was absent.