Rochester adopts controversial downtown historic district

ROCHESTER - Buildings over three downtown blocks here will soon be part of a new historic district, despite concerns from elected officials and building owners.

The Rochester City Council on Monday night approved creating a downtown historic commercial district in a 4-3 vote after almost three hours of discussions.

City officials have studied whether downtown should have a historic district for more than a decade. The issue came before council members in 2019, but was tabled at the time due to concerns over financial impacts to building owners.

About 32 properties near Broadway Avenue S. qualify for preservation, meaning owners would need to go through a review process before they make major exterior changes. The buildings represent some of Rochester’s oldest properties and have been a rallying point for longtime residents who seek to maintain the city’s history.

Yet owners have continually pushed back against the district, arguing it would mandate new rules and unfunded costs while giving the city more control over their properties.

The council tabled the historic district proposal again last year, asking city staff to find more financial incentives to help owners. City staff have proposed a $1 million revolving loan program where owners can borrow up to $200,000 for preservation projects at zero interest, but owners say that doesn’t offset the extra work.

“There’s nothing in this proposal for us to champion,” said Shawn Fagan, co-owner of Fagan Studios in one of the affected buildings. “There is no value in it for us property owners.”

He pointed out another city proposal to abate 10% of property taxes on the properties for 15 years would only amount to a few hundred dollars in savings. John Kruesel, a property owner who runs an antique store near Third Street SW., urged the city to instead roll back taxes altogether to offset costs.

“Just forget all of these incentive packages that are miniscule and meaningless,” he said.

Owners have pushed for grant funding in the past, but City Administrator Alison Zelms said Monday the city couldn’t meet state requirements to offer the kind of money property owners sought. Council President Brooke Carlson and Mayor Kim Norton, who serve on Destination Medical Center’s agency board, said DMC officials would likely be able to offer grants to affected property owners but were waiting for the city to create the district before committing money.

“We need this district, we want this district and we want it to have proper incentives,” Norton said, pointing out a portion of the $205 million local sales tax extension voters approved last year could be used as well.

Several council members had reservations over the agreement, however. Norman Wahl compared the district to buying a car without knowing the price, while Kelly Rae Kirkpatrick called the process frustrating for the city and property owners alike to move forward without secured DMC funding.