ROCHESTER — As city staff continue to plan Rochester’s Regional Sports and Recreation Complex, questions have been raised about how much the facility will actually cost and what it will look like.

A 2023 study prepared by ISG ahead of the city’s sales tax extension vote set the low-end price tag at $65 million for an indoor and outdoor facility hoped to bring in more sports tournaments to Rochester. The study projected a high-end estimate of around $81.3 million.

Since then, the estimated construction costs have risen to around $120 million.

“Quite frankly, I’d just express some disappointment and frustration that the 2023 ISG numbers projected at $80 million for the entire facility,” Rochester Deputy City Administrator Aaron Parrish said. “I just feel like they missed something there, and I think that’s disappointing, but we are where we’re at with that, and we are realizing that the costs are much more significant than they originally projected.”

The broader vision for the complex includes spaces for community activities outside the planned ballfields and courts. The outdoor complex is expected to include a playground, dog park and trails available to the community. The indoor phase is intended to provide a community room, walking and running track and other features.

One cost related to the planned complex — the recentlyapproved $5 million purchase of 160 acres in southeast Rochester near Gamehaven Park and Shoppes on Maine — is nearly three times the projected high estimate for land. Rochester Recreation and Facilities Division Head Ben Boldt said the cost of purchasing and preparing the site could end up being $12 million to $14 million.

“In fairness, we didn’t understand the landscape for the land acquisition at this point (in 2023) and each land acquisition decision has a set of site improvement costs for utilities and grading that we just just didn’t understand, so I think that part of the underprojection is understandable,” Parrish said.

Parrish said the property purchase and development was the lowest cost among the three final site options.

However, building the indoor and outdoor facility at the same time isn’t feasible with a $65 million budget, based on the most recent cost estimates from design consultant TSP + Kahler Slater and Kraus Anderson, which the city enlisted to provide construction management services.

Earlier this month, the Rochester City Council noted the planning for the project would need to be slowed down and split into two phases: first building the outdoor part of the facility, then adding the indoor element.

“We would have been making a number of significant compromises and wouldn’t have delivered a project that the community would have been proud of,” Parrish said of trying to tackle the whole complex at once, rather than splitting it into two phases.

The city is focusing on what could be fully completed and potentially begin to produce revenue within three years of opening, which could be as early as the summer of 2027.

“We felt like the outdoor was the place to start, while still starting to work or continuing to work, right now, on how we can make that indoor side a reality,” Boldt said, adding that city staff knows it’s a disappointment for people who are expecting the complex to provide community amenities discussed in 2023.

Opting to start with the indoor facility likely wouldn’t fill those needs, Parrish said.

“We would have been making a number of significant compromises and wouldn’t have delivered a project that the community would have been proud of,” he said, adding that it would likely require a tax-funded subsidy for operation with a reduced draw for regional tournaments.

Timing caused concern

Rochester Mayor Kim Norton said the result is something she feared in 2022, when the city first sought the Minnesota Legislature’s permission to seek a sales-tax extension.

“When we first brought this to the Legislature, the first year, the first time, I questioned the idea of bringing something forward that we didn’t know what it was, we didn’t know what sport it was for, and we didn’t know where it would be located,” she said. “Yet, we somehow had a number of $65 million.”

When the Legislature failed to pass a 2022 tax bill, the local sales tax status was in limbo and Norton renewed a push for more details about the potential complex ahead of a 2023 request, but no additional planning was completed before the city received permission to hold a vote on tax extension.

The city hired ISG in early 2023 to study local sports and recreation needs, conduct community engagement, prepare a preliminary concept and provide estimates for future expenses related to the proposed complex.

The resulting report maintained a focus on attracting regional sports tournaments to boost economic vitality, but it also included insights from more than 3,000 local residents, which led to the potential for an expanded outcome and potential higher price tag.

Norton said she believes a majority of voters in 2023 wanted to see the expanded concept built and expected it to be feasible with the funds requested.

“I just think we’ve missed the mark between what the community thought they voted for and wanted and what we’ve ultimately decided. … I think there’s just a mismatch,” she said, adding the outcome could make it difficult to get support for funding a second phase.

Rochester City Council member Shaun Palmer said he doesn’t see a mismatch between what was promoted leading up to the sales tax vote.

He said he participated in 25 presentations leading up to the 2023 vote and it was made clear that the sports and recreation complex was intended for regional tournaments and local sports use with the potential for community use when it wasn’t otherwise programmed, but the concept of replacing the YMCA was not a factor.

“It was very clear we were not building the community center,” he said.

Shifting sports

While the 2023 study pointed to the potential for indoor basketball use outpacing outdoor baseball and softball combined, Boldt said an added research conducted by OVG360 shows greater revenue potential tied to the plan to build the state’s first complex with artificial turf ball diamonds, which will be able to be adjusted for various uses and player abilities.

When compared to the multi-use soccer fields recommended in the 2023 study, Boldt said inquiries about the potential for state-level and national events revealed that established events in Blaine are unlikely to be swayed by a new complex with similar amenities.

“There just wasn’t an overwhelming enthusiasm for moving several of those tournaments down here,” Boldt said. “I think we just saw a lower potential for that tournament business at a facility where that’s primarily rectangular sports.”

Parrish said the revised approach will continue work on designing the original vision.

“It’s just thought that with this initial investment of $65 million we have the opportunity to do the outdoor right and then do the indoor right at a later date,” he said, adding that discussions related to a variety of funding options are underway.

Norton said Rochester isn’t alone in finding its goals outpaced its budget, pointing to other cities that have seen sports complexes coming in at a higher price tag.

“I wasn’t surprised to hear that because I had heard from other mayors who said the same thing has happened in their communities,” she said. “You plan for something and it comes in way more.”

Still, she said she is working to encourage staff to work toward a plan that will at least create temporary cover for areas that could include one of two planned artificial turf soccer fields and some pickleball courts to provide the community with year-round use of the site if the $65 million can’t cover the entire vision.

“It’s so hard to get your head around that you can’t build a nice building and baseball diamonds for $65 million,” she said. “It’s mind-boggling.”