ROCHESTER, Minn.—In early November, snow clings to every surface in this town, and locals dart from their cars into the warmth of low-slung buildings. The gray sky is still, save the clouds of steam dissipating off of rooftops.
That is, until you get downtown. There, the largest public-private economic development project in the state’s history is taking shape. The city’s modest skyline is now dotted with high-end hotels and apartments. There are glassy, modern-looking buildings where startups dream of breakthroughs. Concrete construction barriers, chain-link fences, orange cones and cranes mark the site of the next flashy thing.
This is the Destination Medical Center campus. It’s a sweeping economic development plan partly funded by $585 million in public dollars over 20 years for projects to lure patients to healthcare powerhouse Mayo Clinic as well as bioscience companies the system partners with, along with residents and visitors. The tax dollars don’t go directly to Mayo, but they fund infrastructure that supports hotels, office buildings, street improvements and public transportation.
The state funding is delivered incrementally on the condition DMC’s leaders prove they’ve made progress toward the promised $5.6 billion in private investment from developers and new businesses. Of that total, $3.5 billion will come from Mayo itself in the form of expansions to its Rochester campus.
Around 36% of Mayo patients coming to Rochester are either from out of state or international. Those patients and their families want nice hotels, restaurants and things to do—amenities promised under the project.
“When people touch Mayo Clinic, at first when they get there, find where their room is, find where their hotel is, all of that—they had a very positive experience,” said Lisa Clarke, executive director of the DMC Economic Development Agency, a private not-for-profit created to promote the project. “When they stepped off the curb of Mayo Clinic, they had less confidence they were going to find what they were looking for out in the community. That gap is DMC.”
Mayo also expects the DMC to boost its revenue through new products and other innovations created through closer collaborations between Mayo scientists and their counterparts from businesses flocking to the area. That includes big names like Google, Epic Systems Corp. and Boston Scientific. Buildings like One Discovery Square are intended to foster such partnerships.
“We’re looking for places where people are able to rub shoulders and be more innovative with each other,” said Jim Rogers, Mayo’s chief business development officer.
It’s an equally sweet deal for the city and state, which expect to collect up to $8 billion in net new tax revenue over 35 years. The project also promises to create more than 30,000 new jobs.
“Right now, I would say it has to be seen as one of the—if not the most—significant redevelopment (projects) in the country,” said R.T. Rybak, chairman of the DMC Corp.’s governing board and former mayor of Minneapolis.