Council reviews term sheet to convert 10499 Innovation Drive hotel into apartments; TID, affordability questioned

The Common Council reviewed a term sheet brought forward by the Financial Affairs Committee to convert the property at 10499 Innovation Drive from a hotel to multifamily housing.

Finance staff said the developer envisions a mix of micro‑studios, one‑bedroom and a handful of two‑bedroom units, and indicated target monthly rents that would make many units available to households roughly between 60 and 80 percent of area median income (AMI). Council members noted the project is not tied to federal tax credits and therefore not legally bound to preserve units at a specified AMI.

Council members pressed staff for additional detail on the proposed tax incremental finance (TID) geography and the project's capital reserve. The administration said the developer—working within the existing hotel floor plan—proposed a higher capital reserve (staff cited about $850 per unit per month) to address future repairs including HVAC replacement and new windows for the older building. Staff also said the project plan for the TID was not yet finalized and would likely be available mid‑January; the creation of a TID requires a separate process with a joint review board and state review.

Several council members said they supported the housing conversion but asked that the long‑term capital and affordability protections be clarified before final approvals. The Finance Committee recommended the term sheet; council voted to move related items forward and later approved related budget items.