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How the city made its Parcel 5 choice 

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.

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