Sherman Associates Breaks Ground on $136.5M Mixed-Use Development in Downtown Rochester

Sherman Associates joined City of Rochester officials, project partners and community stakeholders on Sept. 17, 2026, to break ground on Rochester Civic Center North, a $136.5 million mixed-use housing development along the downtown riverfront. The 349-unit project, located at 217 E. Center St. on the site of the former Mayo Civic Center North parking lot, marks Sherman Associates' first development in Rochester and is expected to begin welcoming residents in spring 2028.

Project Overview and Unit Mix

Rochester Civic Center North will comprise two residential buildings connected by a shared 350-stall enclosed parking structure on approximately 1.77 acres along the Zumbro River, adjacent to the Mayo Clinic campus and north of Mayo Civic Center.

The first building is a 15-story market-rate tower containing 273 apartments. Of those, 221 are traditional apartments and 52 are furnished residences designed for short-term and month-to-month stays, a format intended to serve Mayo Clinic patients, visitors and employees. The second building is a five-story, 76-unit income-restricted housing community for seniors. Together, the two buildings deliver 349 homes at a development cost of approximately $391,117 per unit.

The project replaces a surface parking lot on a prominent riverfront site with residential density and structured parking, repositioning a key downtown parcel for housing use.

Public-Private Partnership and Financing Structure

Sherman Associates announced a financial closing on the development in August 2026, ahead of the September groundbreaking. The project is structured as a public-private partnership and uses a performance-based tax-increment-financing structure that covers both the market-rate and affordable phases, allowing the two components to advance together as a single development.

Partners on the project include the City of Rochester, the Destination Medical Center Economic Development Agency, Olmsted County, the Coalition for Rochester Area Housing, Frana Companies and ESG Architecture & Design, along with additional community stakeholders.

Earlier plans had described a roughly $140 million project with 341 homes, including a 265-unit tower. The final development reflects a revised scope of $136.5 million and 349 homes with a 273-unit market-rate tower, indicating the project's economics evolved during the predevelopment and financing process.

Market Context and Housing Demand

Community leaders cited growing demand for housing across Rochester, particularly for seniors, as the city continues to expand and attract new employment. Rochester's rental vacancy rate stands at 2.8%, below the roughly 5% level generally associated with market equilibrium, pointing to limited availability across income levels.

The site's proximity to Mayo Clinic supports multiple forms of demand. The 52 furnished, flexible-lease residences are specifically positioned to address short-term housing needs associated with Mayo patients, visitors and workers, giving the project exposure to demand beyond conventional annual apartment leasing.

The development also supports Rochester's broader economic strategy tied to Mayo Clinic expansion and the Destination Medical Center initiative. New downtown housing is intended to accommodate workers, seniors, patients' families and other users while increasing activity around the civic center and riverfront.

Outlook

Both buildings are expected to open in spring 2028. As Sherman Associates' first development in Rochester, Rochester Civic Center North represents a significant entry into a market where low vacancy and institutional employment growth have sustained housing demand. The combination of market-rate production, flexible-stay units and income-restricted senior housing reflects an effort to address multiple segments of that demand through a single, publicly supported development.

Sources: Sherman Associates