Developer Seeking Money From Rochester for New Hotel Project
Rochester, MN (KROC AM News) – The Rochester City Council is being asked to provide financial assistance to the developer who has proposed a new hotel at the former Virgil’s site.
If the request is turned down, the project may be doomed.
The developer is planning to build a 250 room hotel at the NW corner of 2nd St and 11th Ave SW near St Marys Hospital.
The council is scheduled to vote Monday on a request for $1.8-million in tax increment financing for the project. The money would be repaid within 5 years.
The developer initially sought $6-million in assistance but lowered the request to $2.1-million.
The project has an overall cost of nearly $60-million,which includes the $6-million purchase price.
In a letter to the city, the developer indicated the public assistance is needed to move ahead with the project.
“With the above noted, it is important to understand that while we have closed on the purchase of the site our investors are looking to the outcome of our City TIF application to decide how they want to, and if they will at all, proceed with the project. Given where we are late in the economic cycle, it has been challenging, to say the least, in keeping our investors committed to the project. If we receive the TIF award, I am certain we will be able to move forward and, in fact, will be able to quickly break ground. We have worked diligently to value engineer the design of the building to bring costs down (and benefited from cost reductions with the exclusion of prevailing wage) but all of the extras pushed by the City, DMCC and neighborhood association, which we agree enhance the building, such as those mentioned above and others have driven the project’s costs much higher than under our original designs first discussed with the City.”