If multiple large companies were moving their headquarters to downtown Rochester, or the county’s population were exploding, there’d have been a high-stakes bidding war over developing Midtown’s Parcel 5.
Instead, city officials and developers had to choose from a small handful of proposals, each of them based partlyHowconfidence that current demand will continue for years.
On Friday, Mayor Lovely Warren announced her choice for a development: a last-minute proposal for a 3000-seat theater for the Rochester Broadway Theatre League topped, at the back, by an apartment tower developed by Morgan Communities.
While RBTL’s theater had been in the mix from the start, Morgan’s had not. The other contender was developer Andy Gallina’s plan for a 14-story building housing condominiums and commercial space. (A third proposal, Visionary Square, which maintained the parcel as a public gathering spot, hadn’t been seriously considered.)
There had been reports that Warren was ready to award Parcel 5 to Gallina. But as time neared to announce that choice, city officials apparently lost confidence in it. And RBTL and Morgan convinced the Warren administration that together, they could come up with the money to build their project.
Why did city officials choose RBTL and Morgan over Gallina, who is also a respected developer?
RBTL’s proposal had gotten a boost recently with a $25 million pledge from philanthropist Tom Golisano. That’s just a fraction of what the theater will cost, but it’s the kind of “angel” donation that major non-profit projects need in order to get other donations. Morgan’s extensive experience in housing development was also a consideration.
Together, the combined project offered the best of the original two proposals, city officials say. And it makes it more feasible to build a performing arts center downtown, which Warren very much wanted.
Architects and engineers now have to come up with a firm design, and RBTL and Morgan have to flesh out how they’ll finance it. Then, if Warren still OK’s the plan, she’ll ask City Council to approve selling the land to RBTL and Morgan.
Morgan’s apartments won’t be the only housing being developed downtown; 21 more projects are either already under way or in a serious planning stage. And new housing is being developed elsewhere in the city and in the suburbs. Is there demand for more?
The Warren administration insists that there is. The most recent data – from December 2015 – shows a 2.1 percent vacancy rate for downtown’s market-rate rental housing, according to the Rochester Downtown Development Corporation. That rate has been tightening for several years. And in RDDC’s surveys of downtown property managers, 71 percent said their apartments stay vacant less than a month.
RDDC president Heidi Zimmer-Meyer says developers’ confidence in new downtown housing is based on the current low vacancy rate – “what the market is telling us,” she says – plus trends in lifestyle choices: the demographics of people interested in living downtown. Nationally, that trend is that young-professional adults want to live downtown. And RDDC’s surveys have shown the same thing here.
Adding to developers’ confidence: the Rochester area is expected to get 5000 new tech jobs over the next decade, and tech employees tend to like urban living.
At what point will there be more supply than demand? The Warren administration, Zimmer-Meyer, and the developers themselves don’t seem to think we’ve hit that point. The banks financing the projects apparently agree. And as much development as there seems to be, the 21 projects currently under way or planned will add just under 1700 units.
In the absence of major employers moving in or the population growing dramatically, then, trends and developer confidence may be the best barometer city officials have.
This article appears in Apr 12-18, 2017.
The RBTL has been touting its 501c3 designation. Wasn’t this based on its theatrical events. Now that it has decided to expanding its bookings to comedians, bands, lectures etc. shouldn’t those be taxed as they compete with other local businesses? This seems like an abuse of a tax exemption. Their spokesman said they may book up to 180 events a year and to date less than 50 or are Broadway musicals. This will be less than 30% of activities. This tax exemption needs a hard look.
In the city and state kept the 100 million dollars they could probably get $5 million dollars a year in interest. Will the theater return this much to the city or will it continue to reduce our economy by the millions of dollars it sends out of the area in artists fees.
Mr Golisano you have done great things for the areas you have been involved in but please reconsider and build a right sized project. One that supports local artists. Investing in people not buildings is what brings an area to life.
Diogenes,
I am the Board Chair and CEO of RBTL and would like to clear up some misconceptions you have. First, our not for profit status is granted to create education programs for children (and some adults( in the area. We present a wide range of entertainment in all forms, not just Broadway, to garner funds to do that. Many times we even promote shows “at risk” to be sure that we reach our revenue goals for our education programs.
During the run of Wicked, hundreds of school age children attended the show, were fed dinner before, and paid $15.00 for the experience. We do that so they are invested in the evening rather than just going because they have to. Annually, we put 5,000 or so area children through the programs we create, many recognized as the best in the country!
As we move towards this new and expanded presence in the city, our education programs will be expanded as well and the Aud will be the hub of them. I hope this provides some insight into our work in that area since it is the reason for the 501(c)3 status…the promotion of entertainment events of all kinds is the mechanism that pays for the programs along with fund raising.
arnie rothschild
The theater sketch shows The Lion King 1997, Wicked 2003, Rent 1996 and Les Miz 1980. All from the past, not a living theater. Nothing I want to see, especially at a cost of one hundred million tax dollars. I prefer recent productions, both plays and musicals, in an intimate setting. I hope our local and state lawmakers will do the right thing. We need a right sized theater with recent productions of plays, musicals, dance etc. A living theater with opportunities for local talent. However the future seems to be streaming.
I keep hearing brick and mortar stores are not the future of retail. Is the same true of large arts venues and their cost? Many movie theaters are now streaming live performances of opera, dance, musicals and plays with original casts, an interesting and cost effective process. Seats are inexpensive, priced the same and most are good. If we are going to spend a lot of money it should be improving local bandwidth. It would be more equitable, more democratic, available to everyone, and improve our areas economic competitiveness.
Bottom line for Parcel 5 is that the city gave it to Morgan and the RBTL without the faintest proof that the project can be financed and maintained without massive doses of public tax dollars. If you build it, they will come might make for an entertaining movie plot, but the REAL world requires a sound business case.
Let’s be clear about this – it doesn’t happen without Golisano’s gift. The type of leveraging almost never happens and the man has been an absolute angel for WNY. I’m not a huge fan of him doing it publicly, as it basically forced the City’s hand. However – what a gift by someone who has already given hundreds of million to RIT, U of R, etc
Mr. Rothschild, thank you for much clarification, glad to see those in the news actually read the news.
As with the Rochester Museum, they had to branch out in certain respects, (i.e. education & science) in order to stay alive so top heavy positions can get paid what they want, not deserve. They depend heavily on volunteerism to adequate staff, a good way to run an outfit without paying for it.
I will not compare you, personally to the museum, but the 501c3 allows for some breathing room no, hey they created the loophole, so why not ? RBTL, if I’m not mistaken relies on volunteering . What are we teaching these young folk about the arts when they attend said functions? The arts are vital part of life!
I’m not sure a brand new spankin bldg. is gonna change a whole lot downtown, have you thought of another locale, if so, where? This city just doesn’t have it to see you through. Taxpayer base is dwindling before your eyes. It’s just not there, or is it ever gonna be.
Progress ensures neglect.