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7/27/2017 DMCC Board of Directors Meeting - Agenda and Meeting Packet
DESTIN ATION MEDICAL CENTER CORPOR ATION (DMCC) BOARD OF DIRECTORS MEETING 9:30 A.M. THURSDAY, July 27, 2017 MAYO CIVIC CENTER - ROCHESTER This Page is Intentionally Left Blank DESTINATION MEDICAL CENTER CORPORATION (DMCC) BOARD MEETING Thursday, July 27, 2017 9:30 A.M. AGENDA Page I.Call to Order II.Roll Call III.Approval of Agenda ……………………………………………………………………………………………………………………………………………..1 IV.Approval of Minutes: April 27, 2017 ……………………………………………………………………………………………………………………3 V.Public Comment Period VI.Chair’s Report A.Executive Committee Report B.Transportation Work Session C.2018 Budget Review Workgroup and Timeline D.DEED Certification ……………………………………………………………………………………….7 E.City of Rochester Reimbursement Resolution ………………………………………………………..13 VII.DMCC Form 990; Annual Charitable Organization Report ……………………………………………………...17 (Presenter: Craig Popenhagen, CliftonLarsonAllen) Resolution A: Approving the 2017 State of Minnesota Charitable Organization Annual Report and 2016 Form 990 VIII.Project Approval …………………………………………………………………………………………………….. 73 A.Mortenson Phase 1 Discovery Square Development Project Resolution B: Approving the Mortenson Phase 1 Discovery Square Development Project, with Conditions IX.Project Update (City of Rochester, EDA) A.Project Updates 1.Urban on First ……………………………………………………………………………………..95 2. Titan Hilton ………………………………………………………………………………………...97 3.Alatus Project ……………………………………………………………………………………...98 B.Public Realm Updates 1.Heart of the City …………………………………………………………………………………..99 a.Chateau Theatre ……………………………………………………………………………..111 2.Saint Marys Place ………………………………………………………………………………...112 X.EDA Report A.Marketing Metrics ………………………………………………………………………………………..113 B.Energy Integration Group Update ……………………………………………………………………...117 XI.DMCC 2017 Budget: Year to Date Update ………………………………………………………………………………………………………..129 XII.Meeting Schedule: A.Next Regular Meeting: November 2, 2017 at 9:30 A.M. XIII.Adjournment 884771-8.DOCX 1 This Page is Intentionally Left Blank 2 DESTINATION MEDICAL CENTER CORPORATION (DMCC) BOARD OF DIRECTORS MINUTES Thursday, Apri127, 2017 I. Call to Order. Chair Tina Smith called the meeting to order at 9:30 a.m. at the Mayo Civic Center, Suite 111, located at 30 Civic Center Drive SE, Rochester, MN 55904. II. Roll Call. In attendance were Chair Tina Smith, R.T. Rybak, Council Member Mark Hickey, Jim Campbell, Mayor Ardell Brede and Susan Park Rani. III. Approval of A ~e da. Mr. Campbell moved approval of the Agenda. Mayor Brede seconded. A yes (6), Nays (0), Motion carried. IV. Approval of Minutes: February 8, 2017. Council Member Hickey moved approval of the Minutes of the meeting held on February 8, 2017. Mr. Rybak seconded. A yes (6), Nays (0), Motion carried. V. Public Comment Period. Chair Smith invited members of the public to comment. Paula Hardin, a Rochester, MN resident, expressed concerns about the public investment in the DMC initiative and offered suggestions regarding how the community may benefit from future public investment. Richard Olen, a Shoreview, MN resident, expressed support for elevated rail in Rochester. VI. Chair's Report A. Executive Committee Report. Chair Smith reported that on March 23, 2017, the Executive Committee, joined by Mayor Brede, met and approved extensions of the agreements with Risk Management Resources, Inc. and CliftonLarsonAllen. The Committee also authorized the submission of the 2016 certification of expenditures to the Minnesota Department of Employment and Economic Development (DEED). B. Transportation Work Session. Chair Smith reported that on April 18, Chair Smith, Mr. Rybak, Commissioner Bier, Mayor Brede, and Council Member Hickey joined colleagues from the City of Rochester, Mayo Clinic, the EDA and the DMC Integrated Transit Studies (ITS) team at an informal transportation work session. Richard Freese, Public Works Director for the City, thanked the Board and noted that the comments made during the work session were shared with the ITS teams. He stated that the studies proceed on schedule, and that there will likely be a second work session in early June that includes the City Council, Olmsted County Board of Commissioners, DMCC and EDA Boards of Directors. Mr. Rybak stated the intersection of Civic Center Drive and U.S. Highway 52 needs to be addressed to affect downtown traffic/transit demand and parking. He noted that some issues are more pressing than others and that phased solutions could be implemented as growth occurs. 3 Ms. Park Rani requested information regarding the costs of each option. Mr. Freese stated that cost analyses will be completed in September 2017. C. Project Matrix. Chair Smith presented the Board with a matrix of current projects in the DMC district and stated that she welcomes feedback on the provided information. D. Resolution A: Commending Stevan Kvenvold. Chair Smith thanked Mr. Kvenvold for his service on behalf of herself and Governor Mark Dayton. On behalf of the Board, Chair Smith expressed gratitude for Mr. Kvenvold's role in the stewardship and support of DMC. Mayor Brede moved approval of the resolution. Council Member Hickey seconded. A yes (6), Nays (0), Motion carried. VII. Project Approval Conditions. A. Resolution B: Reauirine Additional Review of Proiects upon Material Deviation from Approvals Granted. Chair Smith stated that the resolution was developed to ensure that projects that changed in a material way after DMCC approval still serve the goals and vision of the DMC initiative. She thanked Mr. Campbell, Mr. Dougherty and Mr. Rybak for their comments. Chair Smith moved approval of the resolution. Mr. Campbell seconded. Mr. Rybak moved to amend the resolution to provide that a change of 10% or greater of the approved number of hotel rooms be included in the criteria. Mayor Brede seconded. Ayes (6), Nays (0), Amendment carried. A yes (6), Nays (0), Motion carried. VIII. Project Update. A. Public Realm Design Panel. Patrick Seeb, EDA Director of Economic Development and Placemaking, introduced the panel. The panel is intended to allow the Board to keep pace with public realm change and provide feedback and counsel. Mr. Seeb introduced Tom Fisher, an EDA board member and Director of the University of Minnesota's Metropolitan Design Center, to facilitate the presentation of progress on public realm initiatives. Professor Fisher stated that great cities have great public spaces and that Rochester has an opportunity to become America's City for Health. a. DMC Design Guidelines. Terry Spaeth, City of Rochester Redevelopment Director, described the design guideline sections: downtown, public areas, and individual sites. The design guidelines were developed with support from the University of Minnesota's Metropolitan Design Center. Mr. Spaeth described the process, including community engagement, that created and refined the guidelines. Next steps include planning and zoning commission and city council review and implementation. Professor Fisher and Mr. Spaeth stated that the guidelines follow the best examples of effective design guidelines and are tailored to Rochester. Mr. Campbell requested Board members be made aware of cities that served as models for the design guidelines. b. Heart of the City. Jon Buggy, of RSP Architects, began his presentation by noting that the Heart of the City public realm design has been crafted in accordance with the design guidelines and is authentic to Rochester. The design team's deliverables will include a ~►a 4 schematic design, cost estimates, and phasing and implementation plans. Next steps include a review of the plan with the community advisory committee, city and EDA staff, and property owners; refinement of the cost estimate; a design recommendation; an operations and maintenance plan (to include identified revenue-generation opportunities); and community presentations. A final design and report will be prepared in June 2017. Mr. Rybak asked the design team to consider how to activate Peace Plaza year-round, how changes to First Avenue might create more dramatic public space, and how to connect the skyway and subway system to ground-level space. Ms. Park Rani asked what legal matters exist, and Mr. Buggy cited street ownership as an example. Chateau Theatre. City Administrator Stevan Kvenvold began his presentation by thanking the Board for its commendation of his service to the City of Rochester. Mr. Kvenvold stated that it is his understanding that financing for the purchase and renovation of the theatre was to be accomplished through DMC sale tax revenue and state infrastructure funds. Operating expenses are to be a city responsibility. Mr. Kvenvold stated that the theatre should be renovated to provide amulti-purpose arts and meeting center but that the cost could exceed $21 million. Mayor Brede stated that the Chateau Theatre is a community asset. Mr. Rybak suggested that, prior to full investment and renovation, interim programming could be allowed to measure interest in the use of the theatre for various functions. Mr. Campbell stated that investment in the Chateau Theatre should be maximized by examining innovative ways to enhance or expand the building footprint and suggested considering a partnership with the owners of adjacent properties. Council Member Hickey asked the design team to consider if a renovated theatre would compete with other downtown venues. Mr. Rybak suggested that the renovated theatre could be a "loss leader" that encourages downtown visitation and asked the team to consider how tax-increment revenue or anot-for-profit trust could m itigate the potential for budget deficits resulting from theatre operations. d. Saint Marys Place. Andy Masterpole, of SEH, Inc., provided the Saint Marys Place update. Mr. Masterpole stated that the accelerated public realm design efforts are the result of development interest in the subdistrict, including Mayo Clinic's announced $218 million expansion to Mayo Clinic Hospital Saint Marys Campus. Protected street-level walkways, a pedestrian tunnel connecting the north and south sides of Second Street SW, public space on Twelfth Avenue, mid-block connections that shorten block lengths, functional alleys, and using Second Street S W as an entrance to downtown are being considered in the current concept. Next steps include community and City Council presentations and a demonstration of proposed design concepts. Mr. Campbell suggested that Second Street SW between the Mayo Building and Saint Marys campus should encourage pedestrian use. Mr. Rybak stated that transportation solutions could connect these unique places. Chair Smith suggested including the public realm design work in the next transportation work session. e. Discovery Square. Mr. Seeb noted that progress in Discovery Square has come quickly: the renovation of the Conley-Maass-Downs building, the selection of Mortenson Co., the opening of 501 First Ave, the approval of Urban on First, and the proposed Residences at Discovery Square all demonstrate the vibrant market activity. Next steps are to determine the scope of public realm design work, select a design team, and commence design work on pace with the upcoming Mortenson project. Chair Smith thanked the panelists. 5 B. Discover~quare Project. Jeremy Jacobs, of Mortenson Co. and Eli Hoisington, of HOK, offered an update on the Mortenson project. Progress to-date includes completion of the HR&A market study that identified successful building programs for innovation and the selection of Colliers International as a tenant recruitment partner. Mr. Hoisington noted that opportunities exist using this first building as an anchor for future development. Mr. Campbell asked if other research and development centers have served as models. Mr. Jacobs stated that Johns Hopkins and Cortex are examples of effective innovation spaces but declared that Mayo Clinic is a differentiator, and noted that access to Mayo Clinic staff, services, and technologies sets the development apart from others. Ms. Park Rani asked if overseas developments have been examined. Mr. Jacobs noted that while foreign developments have not been studied, other project team members, including the Medical Alley Association and DEED, have international relationships that may inform program development. C. Other Proiects. Chair Smith noted an update on other projects is in the Board packet. IX. Mayo Clinic Five Year Facilities Update. Tim Siegfried and Gail Eadie of Mayo Clinic's facilities department presented the Mayo Clinic five-year facilities update. Ms. Sadie described the medical zoning districts that direct how Mayo Clinic constructs buildings and highlighted the list of projects Mayo Clinic may undertake in the next five years. Mr. Rybak noted employee distribution between downtown and the Saint Marys campus and suggested it could inform transit discussions. Chair Smith indicated the Board may request another presentation and Mr. Rybak requested that Mayo Clinic find ways to move employee vehicular traffic through portals other than the Civic Center Drive and U.S. Highway 52 interchange. Mr. Campbell complimented the Mayo Clinic team on the comprehensive update. X. EDA Report. Lisa Clarke, EDA Executive Director, directed the Board to the metrics report and marketing campaign metrics document found in the Board packet. A. Metrics Dashboard. Ms. Clarke presented the first review of the DMC metrics dashboard and noted that Wilder Research is a resource for DMC and many regional groups, providing stakeholders with a common data set. The metrics report is updated in the spring and fall of each year. By the end of 2017 EDA staff should have an early indication of which data are needed, missing, or not needed. Additionally, a summary dashboard will be created for Board use. B. Marketing Metrics. Ms. Clarke described the DMC state, national, and international awareness campaign that is underway. XL DMCC 2017 Budget: Year to Date Update. Chair Smith noted that the DMCC financial statements are in the Board packet. XII. Meeting; Schedule. Chair Smith stated that a DMCC Executive Committee meeting may be held on May 24 and that staff are examining options for scheduling a second transportation work session. A. Next Regular Meeting: July 27, 2017 at 9:30 A.M. XIII. Adjournment. Mr. Campbell moved to adjourn the meeting. Council Member Hickey seconded. A yes (6), Nays (0), Motion carried. 884563-4. DOCX 4 6 7 This Page is Intentionally Left Blank 8 9 10 DESTINATION MEDICAL CENTER (DMC) GENERAL STATE INFRASTRUCTURE AID (GSIA) DISBURSEMENT AGREEMENT This Disbursement Agreement is entered into this _27th_ day of _June_, 2017, by and between THE STATE OF MINNESOTA, acting by and through the Department of Employment and Economic Development (DEED), and THE CITY OF ROCHESTER, Minnesota. DEED and the City of Rochester agree to the following terms: 1. For the fiscal year beginning July 1, 2017 and ending June 30, 2018 (FY18), DEED will pay the City of Rochester $_2,686,985.13_ in GSIA in accordance with Minnesota Statutes, section 469.47, subdivision 3 and the terms of the DMC Administrative Agreement entered into by the parties on _July 15, 2015_. The payment of GSIA under this section is contingent on the Commissioner of Employment and Economic Development approving the Certification of Contributions submitted by the City of Rochester for calendar year 2016 and the Certification of Expenditures submitted by the Mayo Clinic and the Destination Medical Center Corporation (DMCC) for calendar year 2016. 2. The City of Rochester must spend all GSIA money received as described in section 1 of this agreement in a manner consistent with Minnesota Statutes, sections 469.40 to 469.47 and the terms of the DMC Administrative Agreement. 3. By April 1 of each year, the City of Rochester must provide DEED a table listing, in detail, what state GSIA has been expended. DEED will review this list and necessary documentation to confirm funds were spent appropriately. 4. DEED has the right to audit the books and records of the City of Rochester (and the DMCC and Mayo) that are necessary to certify that any payments or disbursements of GSIA comply with all state laws, administrative rules, and the terms of the DMC Administrative Agreement. If DEED finds through an audit or by any other means that GSIA funds paid under this agreement were used improperly or not in accordance with state law or the DMC Administrative Agreement, the City of Rochester must immediately repay those funds to DEED. By signing this agreement, DEED and the City of Rochester fully understand and agree to the terms as set forth in this agreement. 11 STATE ENCUMBRANCE Individual certifies that funds have been encumbered as required by Minn. Stat. '' 16A.15 and 16C.05. Signed: ________________________________ Date: _________________________________ SWIFT Contract/PO No(s)._________________ CITY OF ROCHESTER: By: Title: _____________________________ Date: By: Title: _____________________________ Date: DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT: By: Title: ______________________________ Date: _____________________________ 12 13 14 15 This Page is Intentionally Left Blank 16 A. DESTINATION MEDICAL CENTER CORPORATION RESOLUTION NO. -2017 Approving the 2017 State of Minnesota Charitable Organization Annual Report and 2016 Form 990 BACKGROUND RECITALS A. On behalf of the Destination Medical Center Corporation ("DMCC"), CliftonLarsonAllen ("CLA") prepared the 2017 State of Minnesota. Charitable Organization Annual Report (the "Annual Report") and 2016 Form 990 (the "Form 990") and is recommending that the DMCC approve both items. B. The Annual Report and Form 990 were presented to the DMCC on July 27, 2017, and are on file with the DMCC. RESOLUTION NOW, THEREFORE, BE IT RESOLVED, by the Destination Medical Center Corporation, that the 2017 State of Minnesota Charitable Organization Annual Report and 2016 Form 990 are approved. BE IT FURTHER RESOLVED, that the Board authorizes the Chair or Treasurer to take any action or make any amendments necessary and to file the Annual Report and Form 990. 884880. DOCX 17 This Page is Intentionally Left Blank 18 WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor. | ©2017 CliftonLarsonAllen LLP Destination Medical Center Corporation July 27, 2017 19 ©2 0 1 7 C l i f t o n L a r s o n A l l e n L L P WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING IRS Form 990 •Financial information reconciles to DMCC’s audited financial statements •Part III (page 2) –statement of DMCC’s organizational purpose •Part VI (page 6) –governance •Part VII (page 7) –board members 220 ©2 0 1 7 C l i f t o n L a r s o n A l l e n L L P WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING IRS Form 990 •Schedule B (page 21) –contributors •Schedule R (page 31) –related organizations •No unrelated business income for 2016 •Filing deadline is November 15, 2017 321 ©2 0 1 7 C l i f t o n L a r s o n A l l e n L L P WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING Charitable Organization Annual Report •Filed with Minnesota Attorney General’s Office Charities Division •No changes in tax-exempt status (page 2) •No changes in organizational purpose or programs (page 2) •No changes in ability to solicit contributions (page 3) •No compensation paid in excess of $100,000 (page 3) •Financial information (page 4) reconciles to DMCC’s audited financial statements •Filing deadline November 15, 2017 422 ©2 0 1 7 C l i f t o n L a r s o n A l l e n L L P WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING Minnesota Non-profit Corporation Annual Registration •Filed online with Minnesota Secretary of State •In good standing through December 31, 2017 •Annual renewal to be filed (online) for 2018 523 ©2 0 1 7 C l i f t o n L a r s o n A l l e n L L P WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING Thank you for allowing us to serve you! Contact Information: Craig Popenhagen, Principal 507-280-2327 Craig.popenhagen@claconnect.com 624 DRA F T 62634004-01-16 CLIFTONLARSONALLEN LLP P.O. BOX 217 AUSTIN, MN 55912 DALE MARTINSON DESTINATION MEDICAL CENTER CORPORATION 201 4TH STREET SE, NO. 204 ROCHESTER, MN 55904 !559047! 25 DRA F T Caution: Forms printed from within Adobe Acrobat products may not meet IRS or state taxing agency specifications. When using Acrobat 9.x products and later products, select "None"in the "Page Scaling" selection box in the Adobe "Print" dialog. CLIENT'S COPY 26 TINA FLINT SMITH DESTINATION MEDICAL CENTER CORPORATION 201 4TH STREET SE NO. 204 ROCHESTER, MN 55904 TINA FLINT SMITH: ENCLOSED IS THE ORGANIZATION'S 2016 EXEMPT ORGANIZATION RETURN. THE STATE EXEMPT ORGANIZATION ANNUAL REPORT IS ALSO ENCLOSED. THESE SHOULD BE SIGNED, DATED, AND MAILED, AS INDICATED. SPECIFIC FILING INSTRUCTIONS ARE AS FOLLOWS. FORM 990 RETURN: THIS RETURN HAS QUALIFIED FOR ELECTRONIC FILING. AFTER YOU HAVE REVIEWED THE RETURN FOR COMPLETENESS AND ACCURACY, PLEASE SIGN, DATE AND RETURN FORM 8879-EO TO OUR OFFICE. WE WILL TRANSMIT THE RETURN ELECTRONICALLY TO THE IRS AND NO FURTHER ACTION IS REQUIRED. RETURN FORM 8879-EO TO US BY NOVEMBER 15, 2017. MINNESOTA ANNUAL REPORT: THE MINNESOTA ANNUAL REPORT SHOULD BE MAILED ON OR BEFORE NOVEMBER 15, 2017 TO: OFFICE OF THE ATTORNEY GENERAL SUITE 1200, BREMER TOWER 445 MINNESOTA STREET ST. PAUL, MN 55101-2130 ENCLOSE A CHECK OR MONEY ORDER FOR $25.00, PAYABLE TO STATE OF MINNESOTA. INCLUDE THE ORGANIZATION'S FEDERAL EMPLOYER IDENTIFICATION NUMBER AND "2016 ANNUAL REPORT" ON THE REMITTANCE. THE REPORT SHOULD BE SIGNED AND DATED BY THE AUTHORIZED INDIVIDUAL(S). MINNESOTA NON-PROFIT CORPORATION ANNUAL REGISTRATION (ONLINE REGISTRATION REQUIRED); AS PART OF THE TAX RETURN PREPARATION SERVICES THAT CLA 27 . PROVIDES TO YOU, WE HAVE CHECKED YOUR BUSINESS STANDING WITH THE MN SECRETARY OF STATE. ACCORDING TO THE MN SOS WEBSITE, YOUR BUSINESS IS IN GOOD STANDING THROUGH DECEMBER 31, 2017. HOWEVER, THE ANNUAL RENEWAL WILL NEED TO BE FILED TO MAINTAIN YOUR GOOD STANDING FOR 2018. YOU CAN FILE THE RENEWAL ONLINE AT THE SECRETARY OF STATE'S WEBSITE - HTTPS://MBLSPORTAL.SOS.STATE.MN.US/BUSINESS/SEARCH. PLEASE FILE THIS RENEWAL AS SOON AS POSSIBLE TO ENSURE A CONTINUED STATUS OF GOOD STANDING. PUBLIC DISCLOSURE; UNDER RULES EFFECTIVE JUNE 8, 1999, ORGANIZATIONS ARE REQUIRED TO PROVIDE A COPY OF THEIR ANNUAL RETURNS (FORM 990) FOR THE LAST THREE YEARS AND THEIR EXEMPTION APPLICATION (FORM 1023 OR 1024) TO ANYONE WHO REQUESTS THEM. YOU MUST PROVIDE THE ENTIRE FORM 990 AND SCHEDULE A, IF APPLICABLE, EXCEPT FOR THOSE PAGES NOT NORMALLY OPEN TO PUBLIC INSPECTION (I.E., DONOR NAMES AND ADDRESSES). AN ORGANIZATION CAN AVOID HAVING TO PROVIDE COPIES IF IT POSTS THESE DOCUMENTS ON A WORLD WIDE WEB PAGE (MAINTAINED BY ITSELF OR ANOTHER ENTITY WHERE SIMILAR DOCUMENTS ARE POSTED) AND TELLS ANYONE REQUESTING COPIES HOW TO LOCATE THE DOCUMENTS. YOU SHOULD CONTACT US IF YOU HAVE ANY QUESTIONS REGARDING THE SPECIFICS OF COMPLYING WITH THE NEW RULES, OR ON POSTING YOUR FORMS ON THE INTERNET. COPIES OF ALL THE RETURNS ARE ENCLOSED FOR YOUR FILES. WE SUGGEST THAT YOU RETAIN THESE COPIES INDEFINITELY. SINCERELY, CRAIG POPENHAGEN 28 DRA F T 60094104-01-16 ~~~~~~~~~~~~~~~~~ FOR THE YEAR ENDING Prepared for Prepared by Amount due or refund Make check payable to Mail tax return and check (if applicable) to Return must be mailed on or before Special Instructions TAX RETURN FILING INSTRUCTIONS FORM 990 DECEMBER 31, 2016 DESTINATION MEDICAL CENTER CORPORATION 201 4TH STREET SE NO. 204 ROCHESTER, MN 55904 CLIFTONLARSONALLEN LLP P.O. BOX 217 AUSTIN, MN 55912 507-434-7000 NOT APPLICABLE NOT APPLICABLE NOT APPLICABLE NOT APPLICABLE THIS RETURN HAS QUALIFIED FOR ELECTRONIC FILING. AFTER YOU HAVE REVIEWED THE RETURN FOR COMPLETENESS AND ACCURACY, PLEASE SIGN, DATE AND RETURN FORM 8879-EO TO OUR OFFICE. WE WILL TRANSMIT THE RETURN ELECTRONICALLY TO THE IRS AND NO FURTHER ACTION IS REQUIRED. RETURN FORM 8879-EO TO US BY NOVEMBER 15, 2017. 29 DRA F T OMB No. 1545-1878 Form For calendar year 2016, or fiscal year beginning , 2016, and ending , 20 Department of the Treasury Internal Revenue Service 623051 09-26-16 Employer identification number Enter five numbers, butdo not enter all zerosERO firm name do not enter all zeros | Do not send to the IRS. Keep for your records. | Information about Form 8879-EO and its instructions is at 1a, 2a, 3a, 4a, 5a, 1b, 2b, 3b, 4b, 5b, Do not 1a 2a 3a 4a 5a | b Total revenue, 1b 2b 3b 4b 5b | b Total revenue, |b Total tax | b Tax based on investment income | b Balance Due (a) (b) (c) Officer's PIN: check one box only ERO's EFIN/PIN. Pub. 4163, For Paperwork Reduction Act Notice, see instructions. e-file Name of exempt organization Name and title of officer ~~~ ~~~~~~~~~~~~~~~~~~~~ Officer's signature |Date | ERO's signature |Date | Form (2016) (Whole Dollars Only) Check the box for the return for which you are using this Form 8879-EO and enter the applicable amount, if any, from the return. If you check the box on line or below, and the amount on that line for the return being filed with this form was blank, then leave line or whichever is applicable, blank (do not enter -0-). But, if you entered -0- on the return, then enter -0- on the applicable line below. complete more than 1 line in Part I. Form 990 check here Form 990-EZ check here Form 1120-POL check here if any (Form 990, Part VIII, column (A), line 12)~~~~~~~ if any (Form 990-EZ, line 9) ~~~~~~~~~~~~~~ (Form 1120-POL, line 22) ~~~~~~~~~~~~~~~~ Form 990-PF check here Form 8868 check here (Form 990-PF, Part VI, line 5) (Form 8868, line 3c) Under penalties of perjury, I declare that I am an officer of the above organization and that I have examined a copy of the organization's 2016 electronic return and accompanying schedules and statements and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that the amount in Part I above is the amount shown on the copy of the organization's electronic return. I consent to allow my intermediate service provider, transmitter, or electronic return originator (ERO) to send the organization's return to the IRS and to receive from the IRS an acknowledgement of receipt or reason for rejection of the transmission, the reason for any delay in processing the return or refund, and the date of any refund. If applicable, I authorize the U.S. Treasury and its designated Financial Agent to initiate an electronic funds withdrawal (direct debit) entry to the financial institution account indicated in the tax preparation software for payment of the organization's federal taxes owed on this return, and the financial institution to debit the entry to this account. To revoke a payment, I must contact the U.S. Treasury Financial Agent at 1-888-353-4537 no later than 2 business days prior to the payment (settlement) date. I also authorize the financial institutions involved in the processing of the electronic payment of taxes to receive confidential information necessary to answer inquiries and resolve issues related to the payment. I have selected a personal identification number (PIN) as my signature for the organization's electronic return and, if applicable, the organization's consent to electronic funds withdrawal. I authorize to enter my PIN as my signature on the organization's tax year 2016 electronically filed return. If I have indicated within this return that a copy of the return is being filed with a state agency(ies) regulating charities as part of the IRS Fed/State program, I also authorize the aforementioned ERO to enter my PIN on the return's disclosure consent screen. As an officer of the organization, I will enter my PIN as my signature on the organization's tax year 2016 electronically filed return. If I have indicated within this return that a copy of the return is being filed with a state agency(ies) regulating charities as part of the IRS Fed/State program, I will enter my PIN on the return's disclosure consent screen. Enter your six-digit electronic filing identification number (EFIN) followed by your five-digit self-selected PIN. I certify that the above numeric entry is my PIN, which is my signature on the 2016 electronically filed return for the organization indicated above. I confirm that I am submitting this return in accordance with the requirements of Modernized e-File (MeF) Information for Authorized IRS Providers for Business Returns. LHA www.irs.gov/form8879eo. Part I Type of Return and Return Information Part II Declaration and Signature Authorization of Officer Part III Certification and Authentication ERO Must Retain This Form - See Instructions Do Not Submit This Form To the IRS Unless Requested To Do So 8879-EO IRS e-file Signature Authorizationfor an Exempt Organization8879-EO 2016 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 JAMES V BIER TREASURER X 2,288,340. X CLIFTONLARSONALLEN LLP 82924 41312913129 06/16/17 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G130 DRA F T Check if self-employed OMB No. 1545-0047 Department of the Treasury Internal Revenue Service Check ifapplicable: Addresschange Namechange Initialreturn Finalreturn/termin-ated Gross receipts $ Amendedreturn Applica-tionpending Are all subordinates included? 632001 11-11-16 Beginning of Current Year Paid Preparer Use Only Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except private foundations) | Do not enter social security numbers on this form as it may be made public.Open to Public Inspection| Information about Form 990 and its instructions is at A For the 2016 calendar year, or tax year beginning and ending B C D Employer identification number E G H(a) H(b) H(c) F Yes No Yes No I J K Website: | L M 1 2 3 4 5 6 7 3 4 5 6 7a 7b a bAc t i v i t i e s & G o v e r n a n c e Prior Year Current Year 8 9 10 11 12 13 14 15 16 17 18 19 Re v e n u e a b Ex p e n s e s End of Year 20 21 22 Sign Here Yes No For Paperwork Reduction Act Notice, see the separate instructions. (or P.O. box if mail is not delivered to street address) Room/suite )501(c)(3) 501(c) ((insert no.) 4947(a)(1) or 527 |Corporation Trust Association OtherForm of organization:Year of formation:State of legal domicile: | | Ne t A s s e t s o r Fu n d B a l a n c e s Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than officer) is based on all information of which preparer has any knowledge. Signature of officer Date Type or print name and title Date PTINPrint/Type preparer's name Preparer's signature Firm's name Firm's EIN Firm's address Phone no. Form Name of organization Doing business as Number and street Telephone number City or town, state or province, country, and ZIP or foreign postal code Is this a group return for subordinates?Name and address of principal officer:~~ If "No," attach a list. (see instructions) Group exemption number | Tax-exempt status: Briefly describe the organization's mission or most significant activities: Check this box if the organization discontinued its operations or disposed of more than 25% of its net assets. Number of voting members of the governing body (Part VI, line 1a) Number of independent voting members of the governing body (Part VI, line 1b) Total number of individuals employed in calendar year 2016 (Part V, line 2a) ~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~ Total number of volunteers (estimate if necessary) Total unrelated business revenue from Part VIII, column (C), line 12 Net unrelated business taxable income from Form 990-T, line 34 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~ •••••••••••••••••••••• Contributions and grants (Part VIII, line 1h) ~~~~~~~~~~~~~~~~~~~~~ Program service revenue (Part VIII, line 2g) ~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~Investment income (Part VIII, column (A), lines 3, 4, and 7d) Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e) ~~~~~~~~ Total revenue - add lines 8 through 11 (must equal Part VIII, column (A), line 12) ••• Grants and similar amounts paid (Part IX, column (A), lines 1-3) Benefits paid to or for members (Part IX, column (A), line 4) Salaries, other compensation, employee benefits (Part IX, column (A), lines 5-10) ~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~ Professional fundraising fees (Part IX, column (A), line 11e) Total fundraising expenses (Part IX, column (D), line 25) ~~~~~~~~~~~~~~ Other expenses (Part IX, column (A), lines 11a-11d, 11f-24e) Total expenses. Add lines 13-17 (must equal Part IX, column (A), line 25) Revenue less expenses. Subtract line 18 from line 12 ~~~~~~~~~~~~~ ~~~~~~~ •••••••••••••••• Total assets (Part X, line 16) Total liabilities (Part X, line 26) Net assets or fund balances. Subtract line 21 from line 20 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~ •••••••••••••• May the IRS discuss this return with the preparer shown above? (see instructions) ••••••••••••••••••••• LHA Form (2016) www.irs.gov/form990. Part I Summary Signature BlockPart II 990 Return of Organization Exempt From Income Tax990 2016 § == 999 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 201 4TH STREET SE 204 507-328-2850 2,288,340. ROCHESTER, MN 55904 JAMES V. BIER X SAME AS C ABOVE X WWW.DMC.MN X 2013 MN PLANNING AND IMPLEMENTATION OF DESTINATION MEDICAL CENTER DEVELOPMENT IN DOWNTOWN ROCHESTER, 8 8 0 8 0. 0. 3,605,187. 2,288,339. 0.0. 1.1. 0.0. 3,605,188. 2,288,340. 0.0. 0.0. 0.0. 0.0. 0. 3,605,188. 2,288,340. 3,605,188. 2,288,340. 0.0. 250,340. 362,410. 250,340. 362,410. 0.0. JAMES V. BIER, TREASURER CRAIG POPENHAGEN CRAIG POPENHAGEN 06/16/17 P01587689 CLIFTONLARSONALLEN LLP 41-0746749 P.O. BOX 217 AUSTIN, MN 55912 507-434-7000 X SEE SCHEDULE O FOR ORGANIZATION MISSION STATEMENT CONTINUATION 31 DRA F T Code:Expenses $including grants of $Revenue $ Code:Expenses $including grants of $Revenue $ Code:Expenses $including grants of $Revenue $ Expenses $including grants of $Revenue $ 632002 11-11-16 1 2 3 4 Yes No Yes No 4a 4b 4c 4d 4e Form 990 (2016)Page Check if Schedule O contains a response or note to any line in this Part III •••••••••••••••••••••••••••• Briefly describe the organization's mission: Did the organization undertake any significant program services during the year which were not listed on the prior Form 990 or 990-EZ? If "Yes," describe these new services on Schedule O. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization cease conducting, or make significant changes in how it conducts, any program services? If "Yes," describe these changes on Schedule O. ~~~~~~ Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses. Section 501(c)(3) and 501(c)(4) organizations are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported. () () () () () () () () () Other program services (Describe in Schedule O.) () () Total program service expenses | Form (2016) 2 Statement of Program Service AccomplishmentsPart III 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 X WITH MAYO CLINIC AT ITS HEART, THE DESTINATION MEDICAL CENTER (DMC) INITIATIVE WILL BE THE CATALYST TO POSITION ROCHESTER, MINNESOTA AS THE WORLD'S PREMIER DESTINATION CENTER FOR HEALTH AND WELLNESS; ATTRACTING PEOPLE, INVESTMENT, AND JOBS TO AMERICA'S CITY FOR HEALTH X X 2,015,029. OVERSIGHT, PREPARATION AND IMPLEMENTATION OF THE DEVELOPMENT PLAN - AN IN DEPTH STUDY OF INFRASTRUCTURE, PLANNING, AND DEVELOPMENT OPPORTUNITIES, AND FRAMEWORK TO SUPPORT THE DEVELOPMENT OF ROCHESTER AS A DESTINATION MEDICAL CENTER. 2,015,029. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 2 32 DRA F T 632003 11-11-16 Yes No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 1 2 3 4 5 6 7 8 9 10 Section 501(c)(3) organizations. a b c d e f a b 11a 11b 11c 11d 11e 11f 12a 12b 13 14a 14b 15 16 17 18 19 a b If "Yes," complete Schedule A Schedule B, Schedule of Contributors If "Yes," complete Schedule C, Part I If "Yes," complete Schedule C, Part II If "Yes," complete Schedule C, Part III If "Yes," complete Schedule D, Part I If "Yes," complete Schedule D, Part II If "Yes," complete Schedule D, Part III If "Yes," complete Schedule D, Part IV If "Yes," complete Schedule D, Part V If "Yes," complete Schedule D, Part VI If "Yes," complete Schedule D, Part VII If "Yes," complete Schedule D, Part VIII If "Yes," complete Schedule D, Part IX If "Yes," complete Schedule D, Part X If "Yes," complete Schedule D, Part X If "Yes," complete Schedule D, Parts XI and XII If "Yes," and if the organization answered "No" to line 12a, then completing Schedule D, Parts XI and XII is optional If "Yes," complete Schedule E If "Yes," complete Schedule F, Parts I and IV If "Yes," complete Schedule F, Parts II and IV If "Yes," complete Schedule F, Parts III and IV If "Yes," complete Schedule G, Part I If "Yes," complete Schedule G, Part II If "Yes," complete Schedule G, Part III Form 990 (2016)Page Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Is the organization required to complete ? Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? ~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization engage in lobbying activities, or have a section 501(h) election in effect during the tax year? Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Revenue Procedure 98-19? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~ Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? Did the organization receive or hold a conservation easement, including easements to preserve open space, the environment, historic land areas, or historic structures? Did the organization maintain collections of works of art, historical treasures, or other similar assets? ~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization report an amount in Part X, line 21, for escrow or custodial account liability, serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent endowments, or quasi-endowments? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~ If the organization's answer to any of the following questions is "Yes," then complete Schedule D, Parts VI, VII, VIII, IX, or X as applicable. Did the organization report an amount for land, buildings, and equipment in Part X, line 10? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization report an amount for investments - other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X, line 16? Did the organization report an amount for investments - program related in Part X, line 13 that is 5% or more of its total assets reported in Part X, line 16? ~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? Did the organization report an amount for other liabilities in Part X, line 25? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~ Did the organization's separate or consolidated financial statements for the tax year include a footnote that addresses the organization's liability for uncertain tax positions under FIN 48 (ASC 740)? Did the organization obtain separate, independent audited financial statements for the tax year? ~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Was the organization included in consolidated, independent audited financial statements for the tax year? ~~~~~ Is the organization a school described in section 170(b)(1)(A)(ii)? Did the organization maintain an office, employees, or agents outside of the United States? ~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~ Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, investment, and program service activities outside the United States, or aggregate foreign investments valued at $100,000 or more? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or other assistance to or for any foreign organization? Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or other assistance to or for foreign individuals? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization report a total of more than $15,000 of expenses for professional fundraising services on Part IX, column (A), lines 6 and 11e? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines 1c and 8a? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? ••••••••••••••••••••••••••••••••••••••••••••••• Form (2016) 3 Part IV Checklist of Required Schedules 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 X X X X X X X X X X X X X X X X X X X X X X X X X X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 3 33 DRA F T 632004 11-11-16 Yes No 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 a b 20a 20b 21 22 23 24a 24b 24c 24d 25a 25b 26 27 28a 28b 28c 29 30 31 32 33 34 35a 35b 36 37 38 a b c d a b Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations. a b c a b Section 501(c)(3) organizations. Note. (continued) If "Yes," complete Schedule H If "Yes," complete Schedule I, Parts I and II If "Yes," complete Schedule I, Parts I and III If "Yes," complete Schedule J If "Yes," answer lines 24b through 24d and complete Schedule K. If "No", go to line 25a If "Yes," complete Schedule L, Part I If "Yes," complete Schedule L, Part I If "Yes," complete Schedule L, Part II If "Yes," complete Schedule L, Part III If "Yes," complete Schedule L, Part IV If "Yes," complete Schedule L, Part IV If "Yes," complete Schedule L, Part IV If "Yes," complete Schedule M If "Yes," complete Schedule M If "Yes," complete Schedule N, Part I If "Yes," complete Schedule N, Part II If "Yes," complete Schedule R, Part I If "Yes," complete Schedule R, Part II, III, or IV, and Part V, line 1 If "Yes," complete Schedule R, Part V, line 2 If "Yes," complete Schedule R, Part V, line 2 If "Yes," complete Schedule R, Part VI Form 990 (2016)Page Did the organization operate one or more hospital facilities? ~~~~~~~~~~~~~~~~ If "Yes" to line 20a, did the organization attach a copy of its audited financial statements to this return? ~~~~~~~~~~ Did the organization report more than $5,000 of grants or other assistance to any domestic organization or domestic government on Part IX, column (A), line 1? ~~~~~~~~~~~~~~ Did the organization report more than $5,000 of grants or other assistance to or for domestic individuals on Part IX, column (A), line 2? ~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization answer "Yes" to Part VII, Section A, line 3, 4, or 5 about compensation of the organization's current and former officers, directors, trustees, key employees, and highest compensated employees? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception? Did the organization maintain an escrow account other than a refunding escrow at any time during the year to defease any tax-exempt bonds? Did the organization act as an "on behalf of" issuer for bonds outstanding at any time during the year? ~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~ Did the organization engage in an excess benefit transaction with a disqualified person during the year? Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization's prior Forms 990 or 990-EZ? ~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization report any amount on Part X, line 5, 6, or 22 for receivables from or payables to any current or former officers, directors, trustees, key employees, highest compensated employees, or disqualified persons? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial contributor or employee thereof, a grant selection committee member, or to a 35% controlled entity or family member of any of these persons? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Was the organization a party to a business transaction with one of the following parties (see Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions): A current or former officer, director, trustee, or key employee? ~~~~~~~~~~~ A family member of a current or former officer, director, trustee, or key employee? An entity of which a current or former officer, director, trustee, or key employee (or a family member thereof) was an officer, director, trustee, or direct or indirect owner? ~~ ~~~~~~~~~~~~~~~~~~~~~ Did the organization receive more than $25,000 in non-cash contributions? Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? ~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization liquidate, terminate, or dissolve and cease operations? Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections 301.7701-2 and 301.7701-3? Was the organization related to any tax-exempt or taxable entity? ~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization have a controlled entity within the meaning of section 512(b)(13)? If "Yes" to line 35a, did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? ~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~ Did the organization make any transfers to an exempt non-charitable related organization? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization conduct more than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal income tax purposes? ~~~~~~~~ Did the organization complete Schedule O and provide explanations in Schedule O for Part VI, lines 11b and 19? All Form 990 filers are required to complete Schedule O ••••••••••••••••••••••••••••••• Form (2016) 4 Part IV Checklist of Required Schedules 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 X X X X X X X X X X X X X X X X X X X X X X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 4 34 DRA F T 632005 11-11-16 Yes No 1 2 3 4 5 6 7 a b c 1a 1b 1c a b 2a Note. 2b 3a 3b 4a 5a 5b 5c 6a 6b 7a 7b 7c 7e 7f 7g 7h 8 9a 9b a b a b a b c a b Organizations that may receive deductible contributions under section 170(c). a b c d e f g h 7d 8 9 10 11 12 13 14 Sponsoring organizations maintaining donor advised funds. Sponsoring organizations maintaining donor advised funds. a b Section 501(c)(7) organizations. a b 10a 10b Section 501(c)(12) organizations. a b 11a 11b a b Section 4947(a)(1) non-exempt charitable trusts. 12a 12b Section 501(c)(29) qualified nonprofit health insurance issuers. Note. a b c a b 13a 13b 13c 14a 14b e-file If "No," to line 3b, provide an explanation in Schedule O If "No," provide an explanation in Schedule O Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor? Form (2016) Form 990 (2016)Page Check if Schedule O contains a response or note to any line in this Part V ••••••••••••••••••••••••••• Enter the number reported in Box 3 of Form 1096. Enter -0- if not applicable ~~~~~~~~~~~ Enter the number of Forms W-2G included in line 1a. Enter -0- if not applicable ~~~~~~~~~~ Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners?••••••••••••••••••••••••••••••••••••••••••• Enter the number of employees reported on Form W-3, Transmittal of Wage and Tax Statements, filed for the calendar year ending with or within the year covered by this return~~~~~~~~~~ If at least one is reported on line 2a, did the organization file all required federal employment tax returns? If the sum of lines 1a and 2a is greater than 250, you may be required to (see instructions) ~~~~~~~~~~ ~~~~~~~~~~~ Did the organization have unrelated business gross income of $1,000 or more during the year? If "Yes," has it filed a Form 990-T for this year? ~~~~~~~~~~~~~~ ~~~~~~~~~~ At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)?~~~~~~~ If "Yes," enter the name of the foreign country: See instructions for filing requirements for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Was the organization a party to a prohibited tax shelter transaction at any time during the tax year? Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction? ~~~~~~~~~~~~ ~~~~~~~~~ If "Yes," to line 5a or 5b, did the organization file Form 8886-T? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit any contributions that were not tax deductible as charitable contributions? If "Yes," did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible? ~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If "Yes," did the organization notify the donor of the value of the goods or services provided? Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282? ~~~~~~~~~~~~~~~ •••••••••••••••••••••••••••••••••••••••••••••••••••• If "Yes," indicate the number of Forms 8282 filed during the year Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract? ~~~~~~~~~~~~~~~~ ~~~~~~~ ~~~~~~~~~Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract? If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required? If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C? ~ Did a donor advised fund maintained by the sponsoring organization have excess business holdings at any time during the year? ~~~~~~~~~~~~~~~~~~~ Did the sponsoring organization make any taxable distributions under section 4966? Did the sponsoring organization make a distribution to a donor, donor advisor, or related person? ~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~ Enter: Initiation fees and capital contributions included on Part VIII, line 12 Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities ~~~~~~~~~~~~~~~ ~~~~~~ Enter: Gross income from members or shareholders Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them.) ~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Is the organization filing Form 990 in lieu of Form 1041? If "Yes," enter the amount of tax-exempt interest received or accrued during the year •••••• Is the organization licensed to issue qualified health plans in more than one state? See the instructions for additional information the organization must report on Schedule O. ~~~~~~~~~~~~~~~~~~~~~ Enter the amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans Enter the amount of reserves on hand ~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization receive any payments for indoor tanning services during the tax year? If "Yes," has it filed a Form 720 to report these payments? ~~~~~~~~~~~~~~~~ •••••••••• 5 Part V Statements Regarding Other IRS Filings and Tax Compliance 990 J DESTINATION MEDICAL CENTER CORPORATION 46-4959371 2 0 0 X X X X X X X X X X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 5 35 DRA F T 632006 11-11-16 Yes No 1a 1b 1 2 3 4 5 6 7 8 9 a b 2 3 4 5 6 7a 7b 8a 8b 9 a b a b Yes No 10 11 a b 10a 10b 11a 12a 12b 12c 13 14 15a 15b 16a 16b a b 12a b c 13 14 15 a b 16a b 17 18 19 20 For each "Yes" response to lines 2 through 7b below, and for a "No" response to line 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions. If "Yes," provide the names and addresses in Schedule O (This Section B requests information about policies not required by the Internal Revenue Code.) If "No," go to line 13 If "Yes," describe in Schedule O how this was done (explain in Schedule O) If there are material differences in voting rights among members of the governing body, or if the governing body delegated broad authority to an executive committee or similar committee, explain in Schedule O. Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following: Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts? Form (2016) Form 990 (2016)Page Check if Schedule O contains a response or note to any line in this Part VI ••••••••••••••••••••••••••• Enter the number of voting members of the governing body at the end of the tax year Enter the number of voting members included in line 1a, above, who are independent ~~~~~~ ~~~~~~ Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization delegate control over management duties customarily performed by or under the direct supervision of officers, directors, or trustees, or key employees to a management company or other person?~~~~~~~~~~~~~~ Did the organization make any significant changes to its governing documents since the prior Form 990 was filed? Did the organization become aware during the year of a significant diversion of the organization's assets? Did the organization have members or stockholders? ~~~~~ ~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or more members of the governing body? Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or persons other than the governing body? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The governing body? Each committee with authority to act on behalf of the governing body? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the organization's mailing address? ••••••••••••••••• Did the organization have local chapters, branches, or affiliates? If "Yes," did the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with the organization's exempt purposes? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~ Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form? Describe in Schedule O the process, if any, used by the organization to review this Form 990. Did the organization have a written conflict of interest policy? ~~~~~~~~~~~~~~~~~~~~ ~~~~~~ Did the organization regularly and consistently monitor and enforce compliance with the policy? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization have a written whistleblower policy? Did the organization have a written document retention and destruction policy? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Did the process for determining compensation of the following persons include a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision? The organization's CEO, Executive Director, or top management official Other officers or key employees of the organization If "Yes" to line 15a or 15b, describe the process in Schedule O (see instructions). ~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If "Yes," did the organization follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and take steps to safeguard the organization's exempt status with respect to such arrangements?•••••••••••••••••••••••••••••••••••• List the states with which a copy of this Form 990 is required to be filed Section 6104 requires an organization to make its Forms 1023 (or 1024 if applicable), 990, and 990-T (Section 501(c)(3)s only) available for public inspection. Indicate how you made these available. Check all that apply. Own website Another's website Upon request Other Describe in Schedule O whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year. State the name, address, and telephone number of the person who possesses the organization's books and records: | 6 Part VI Governance, Management, and Disclosure Section A. Governing Body and Management Section B. Policies Section C. Disclosure 990 J DESTINATION MEDICAL CENTER CORPORATION 46-4959371 X 8 8 X X X X X X X X X X X X X X X X X X X X MN X DALE MARTINSON - 507-328-2850 201 4TH STREET SE ROOM 204, ROCHESTER, MN 55904 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 6 36 DRA F T In d i v i d u a l t r u s t e e o r d i r e c t o r In s t i t u t i o n a l t r u s t e e Of f i c e r Ke y e m p l o y e e Hi g h e s t c o m p e n s a t e d em p l o y e e Fo r m e r (do not check more than one box, unless person is both an officer and a director/trustee) 632007 11-11-16 current Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees 1a current current former former directors or trustees (A)(B)(C)(D)(E)(F) Form 990 (2016)Page Check if Schedule O contains a response or note to any line in this Part VII ••••••••••••••••••••••••••• Complete this table for all persons required to be listed. Report compensation for the calendar year ending with or within the organization's tax year. ¥ List all of the organization's officers, directors, trustees (whether individuals or organizations), regardless of amount of compensation.Enter -0- in columns (D), (E), and (F) if no compensation was paid.¥ List all of the organization's key employees, if any. See instructions for definition of "key employee." ¥ List the organization's five highest compensated employees (other than an officer, director, trustee, or key employee) who received report- able compensation (Box 5 of Form W-2 and/or Box 7 of Form 1099-MISC) of more than $100,000 from the organization and any related organizations. ¥ List all of the organization's officers, key employees, and highest compensated employees who received more than $100,000 of reportable compensation from the organization and any related organizations. ¥ List all of the organization's that received, in the capacity as a former director or trustee of the organization, more than $10,000 of reportable compensation from the organization and any related organizations. List persons in the following order: individual trustees or directors; institutional trustees; officers; key employees; highest compensated employees; and former such persons. Check this box if neither the organization nor any related organization compensated any current officer, director, or trustee. PositionName and Title Average hours per week (list any hours for related organizations below line) Reportable compensation from the organization (W-2/1099-MISC) Reportable compensation from related organizations (W-2/1099-MISC) Estimated amount of other compensation from the organization and related organizations Form (2016) 7 Part VII Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 X (1) TINA FLINT SMITH 6.00 CHAIR X X 0.0.0. (2) R.T. RYBAK 4.00 VICE CHAIR X X 0.0.0. (3) JIM BIER 4.00 TREASURER X X 0.0.0. (4) ARDELL F. BREDE 4.00 DIRECTOR X 0.0.0. (5) JAMES CAMPBELL 4.00 DIRECTOR X 0.0.0. (6) MICHAEL DOUGHERTY 4.00 DIRECTOR X 0.0.0. (7) MARK HICKEY 4.00 DIRECTOR X 0.0.0. (8) SUSAN PARK RANI 4.00 DIRECTOR X 0.0.0. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 7 37 DRA F T Fo r m e r In d i v i d u a l t r u s t e e o r d i r e c t o r In s t i t u t i o n a l t r u s t e e Of f i c e r Hi g h e s t c o m p e n s a t e d em p l o y e e Ke y e m p l o y e e (do not check more than one box, unless person is both an officer and a director/trustee) 632008 11-11-16 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (B)(C)(A)(D)(E)(F) 1b c d Sub-total Total from continuation sheets to Part VII, Section A Total (add lines 1b and 1c) 2 Yes No 3 4 5 former 3 4 5 Section B. Independent Contractors 1 (A)(B)(C) 2 (continued) If "Yes," complete Schedule J for such individual If "Yes," complete Schedule J for such individual If "Yes," complete Schedule J for such person Page Form 990 (2016) PositionAverage hours per week (list any hours for related organizations below line) Name and title Reportable compensation from the organization (W-2/1099-MISC) Reportable compensation from related organizations (W-2/1099-MISC) Estimated amount of other compensation from the organization and related organizations ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | ~~~~~~~~~~ | •••••••••••••••••••••••• | Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization | Did the organization list any officer, director, or trustee, key employee, or highest compensated employee on line 1a? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? ~~~~~~~~~~~~~ Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? •••••••••••••••••••••••• Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization's tax year. Name and business address Description of services Compensation Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 of compensation from the organization | Form (2016) 8 Part VII 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 0.0.0. 0.0.0. 0.0.0. 0 X X X DESTINATION MEDICAL CENTER ECONOMIC DEVELOP 200 1ST STREET SW, ROCHESTER, MN 55905 DEVELOPMENT PLAN PREPARATION 2,022,163. MCGRANN SHEA CARNIVAL STRAUGHN & LAMB, CHTD 800 NICOLLET MALL, SUITE 2600, MINNEAPOLIS,LEGAL SERVICES 217,195. 2 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 8 38 DRA F T Noncash contributions included in lines 1a-1f: $ 632009 11-11-16 Total revenue. (A)(B)(C)(D) 1 a b c d e f g h 1 1 1 1 1 1 a b c d e f Co n t r i b u t i o n s , G i f t s , G r a n t s an d O t h e r S i m i l a r A m o u n t s Total. Business Code a b c d e f g 2 Pr o g r a m S e r v i c e Re v e n u e Total. 3 4 5 6 a b c d a b c d 7 a b c 8 a b 9 a b c a b 10 a b c a b Business Code 11 a b c d e Total. Ot h e r R e v e n u e 12 Revenue excludedfrom tax undersections512 - 514 All other contributions, gifts, grants, and similar amounts not included above See instructions. Form (2016) Page Form 990 (2016) Check if Schedule O contains a response or note to any line in this Part VIII ••••••••••••••••••••••••• Total revenue Related orexempt functionrevenue Unrelatedbusinessrevenue Federated campaigns Membership dues ~~~~~~ ~~~~~~~~ Fundraising events Related organizations ~~~~~~~~ ~~~~~~ Government grants (contributions) ~~ Add lines 1a-1f ••••••••••••••••• | All other program service revenue ~~~~~ Add lines 2a-2f ••••••••••••••••• | Investment income (including dividends, interest, and other similar amounts) Income from investment of tax-exempt bond proceeds ~~~~~~~~~~~~~~~~~ | | Royalties ••••••••••••••••••••••• | (i) Real (ii) Personal Gross rents Less: rental expenses Rental income or (loss) Net rental income or (loss) ~~~~~~~ ~~~ ~~ •••••••••••••• | Gross amount from sales of assets other than inventory (i) Securities (ii) Other Less: cost or other basis and sales expenses Gain or (loss) ~~~ ~~~~~~~ Net gain or (loss) ••••••••••••••••••• | Gross income from fundraising events (not including $of contributions reported on line 1c). See Part IV, line 18 ~~~~~~~~~~~~~ Less: direct expenses~~~~~~~~~~ Net income or (loss) from fundraising events ••••• | Gross income from gaming activities. See Part IV, line 19 ~~~~~~~~~~~~~ Less: direct expenses Net income or (loss) from gaming activities ~~~~~~~~~ •••••• | Gross sales of inventory, less returns and allowances ~~~~~~~~~~~~~ Less: cost of goods sold Net income or (loss) from sales of inventory ~~~~~~~~ •••••• | Miscellaneous Revenue All other revenue ~~~~~~~~~~~~~ Add lines 11a-11d ~~~~~~~~~~~~~~~ | |••••••••••••• 9 Part VIII Statement of Revenue 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 2,288,339. 2,288,339. 1.1. 2,288,340.0.0.1. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 9 39 DRA F T Check here if following SOP 98-2 (ASC 958-720) 632010 11-11-16 Total functional expenses. Joint costs. (A)(B)(C)(D) 1 2 3 4 5 6 7 8 9 10 11 a b c d e f g 12 13 14 15 16 17 18 19 20 21 22 23 24 a b c d e 25 26 Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A). Grants and other assistance to domestic organizations and domestic governments. See Part IV, line 21 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) Professional fundraising services. See Part IV, line 17 (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Sch O.) Other expenses. Itemize expenses not covered above. (List miscellaneous expenses in line 24e. If line24e amount exceeds 10% of line 25, column (A)amount, list line 24e expenses on Schedule O.) Add lines 1 through 24e Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation. Form 990 (2016)Page Check if Schedule O contains a response or note to any line in this Part IX •••••••••••••••••••••••••• Total expenses Program serviceexpenses Management andgeneral expenses Fundraisingexpenses ~ Grants and other assistance to domestic individuals. See Part IV, line 22 ~~~~~~~ Grants and other assistance to foreign organizations, foreign governments, and foreign individuals. See Part IV, lines 15 and 16 ~~~ Benefits paid to or for members~~~~~~~ Compensation of current officers, directors, trustees, and key employees ~~~~~~~~ ~~~ Other salaries and wages ~~~~~~~~~~ Other employee benefits ~~~~~~~~~~ Payroll taxes ~~~~~~~~~~~~~~~~ Fees for services (non-employees): Management Legal Accounting Lobbying ~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~ Investment management fees Other. ~~~~~~~~ Advertising and promotion Office expenses Information technology Royalties ~~~~~~~~~ ~~~~~~~~~~~~~~~ ~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~ Occupancy ~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~Travel Payments of travel or entertainment expenses for any federal, state, or local public officials Conferences, conventions, and meetings ~~ Interest Payments to affiliates ~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~ Depreciation, depletion, and amortization Insurance ~~ ~~~~~~~~~~~~~~~~~ All other expenses | Form (2016) Do not include amounts reported on lines 6b, 7b, 8b, 9b, and 10b of Part VIII. 10 Part IX Statement of Functional Expenses 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 217,195.217,195. 4,000.4,000. 17,333.17,333. 18,907.18,907. 573.573. 682.682. 15,303.15,303. PROGRAM COSTS 2,014,347. 2,014,347. 2,288,340. 2,015,029. 273,311.0. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 10 40 DRA F T 632011 11-11-16 (A)(B) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 1 2 3 4 5 6 7 8 9 10c 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 a b 10a 10b As s e t s Total assets. Li a b i l i t i e s Total liabilities. Organizations that follow SFAS 117 (ASC 958), check here and complete lines 27 through 29, and lines 33 and 34. 27 28 29 Organizations that do not follow SFAS 117 (ASC 958), check here and complete lines 30 through 34. 30 31 32 33 34 Ne t A s s e t s o r F u n d B a l a n c e s Form 990 (2016)Page Check if Schedule O contains a response or note to any line in this Part X ••••••••••••••••••••••••••••• Beginning of year End of year Cash - non-interest-bearing Savings and temporary cash investments Pledges and grants receivable, net ~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~ Accounts receivable, net ~~~~~~~~~~~~~~~~~~~~~~~~~~ Loans and other receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of Schedule L ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary organizations (see instr). Complete Part II of Sch L ~~ Notes and loans receivable, net Inventories for sale or use Prepaid expenses and deferred charges ~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~ Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D Less: accumulated depreciation ~~~ ~~~~~~ Investments - publicly traded securities Investments - other securities. See Part IV, line 11 Investments - program-related. See Part IV, line 11 Intangible assets ~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~ ~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Other assets. See Part IV, line 11 ~~~~~~~~~~~~~~~~~~~~~~ Add lines 1 through 15 (must equal line 34) •••••••••• Accounts payable and accrued expenses Grants payable Deferred revenue ~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Tax-exempt bond liabilities Escrow or custodial account liability. Complete Part IV of Schedule D ~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~ Loans and other payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified persons. Complete Part II of Schedule L ~~~~~~~~~~~~~~~~~~~~~~~ Secured mortgages and notes payable to unrelated third parties ~~~~~~ Unsecured notes and loans payable to unrelated third parties ~~~~~~~~ Other liabilities (including federal income tax, payables to related third parties, and other liabilities not included on lines 17-24). Complete Part X of Schedule D ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Add lines 17 through 25 •••••••••••••••••• | Unrestricted net assets Temporarily restricted net assets Permanently restricted net assets ~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~ | Capital stock or trust principal, or current funds Paid-in or capital surplus, or land, building, or equipment fund Retained earnings, endowment, accumulated income, or other funds ~~~~~~~~~~~~~~~ ~~~~~~~~ ~~~~ Total net assets or fund balances ~~~~~~~~~~~~~~~~~~~~~~ Total liabilities and net assets/fund balances •••••••••••••••• Form (2016) 11 Balance SheetPart X 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 1,000.905. 2,868.0. 12,620.12,998. 233,852.348,507. 250,340.362,410. 186,720.298,412. 12,620.12,998. 51,000.51,000. 250,340.362,410. X 0.0. 0.0. 250,340.362,410. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 11 41 DRA F T 632012 11-11-16 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 Yes No 1 2 3 a b c 2a 2b 2c a b 3a 3b Form 990 (2016)Page Check if Schedule O contains a response or note to any line in this Part XI ••••••••••••••••••••••••••• Total revenue (must equal Part VIII, column (A), line 12) Total expenses (must equal Part IX, column (A), line 25) Revenue less expenses. Subtract line 2 from line 1 Net assets or fund balances at beginning of year (must equal Part X, line 33, column (A)) ~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~ Net unrealized gains (losses) on investments Donated services and use of facilities Investment expenses Prior period adjustments ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Other changes in net assets or fund balances (explain in Schedule O) Net assets or fund balances at end of year. Combine lines 3 through 9 (must equal Part X, line 33, column (B)) ~~~~~~~~~~~~~~~~~~~ ••••••••••••••••••••••••••••••••••••••••••••••• Check if Schedule O contains a response or note to any line in this Part XII ••••••••••••••••••••••••••• Accounting method used to prepare the Form 990: Cash Accrual Other If the organization changed its method of accounting from a prior year or checked "Other," explain in Schedule O. Were the organization's financial statements compiled or reviewed by an independent accountant? ~~~~~~~~~~~~ If "Yes," check a box below to indicate whether the financial statements for the year were compiled or reviewed on a separate basis, consolidated basis, or both: Separate basis Consolidated basis Both consolidated and separate basis Were the organization's financial statements audited by an independent accountant? ~~~~~~~~~~~~~~~~~~~ If "Yes," check a box below to indicate whether the financial statements for the year were audited on a separate basis, consolidated basis, or both: Separate basis Consolidated basis Both consolidated and separate basis If "Yes" to line 2a or 2b, does the organization have a committee that assumes responsibility for oversight of the audit, review, or compilation of its financial statements and selection of an independent accountant?~~~~~~~~~~~~~~~ If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O. As a result of a federal award, was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A-133? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If "Yes," did the organization undergo the required audit or audits? If the organization did not undergo the required audit or audits, explain why in Schedule O and describe any steps taken to undergo such audits •••••••••••••••• Form (2016) 12 Part XI Reconciliation of Net Assets Part XII Financial Statements and Reporting 990 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 2,288,340. 2,288,340. 0. 0. 0. 0. X X X X X X X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 12 42 DRA F T (iv) Is the organization listedin your governing document? OMB No. 1545-0047 Department of the Treasury Internal Revenue Service 632021 09-21-16 Information about Schedule A (Form 990 or 990-EZ) and its instructions is at (i)(iii)(v)(vi)(ii) Name of supported organization Type of organization (described on lines 1-10 above (see instructions)) Amount of monetary support (see instructions) Amount of other support (see instructions) EIN (Form 990 or 990-EZ)Complete if the organization is a section 501(c)(3) organization or a section 4947(a)(1) nonexempt charitable trust. | Attach to Form 990 or Form 990-EZ. | Open to Public Inspection Name of the organization Employer identification number 1 2 3 4 5 6 7 8 9 10 11 12 section 170(b)(1)(A)(i). section 170(b)(1)(A)(ii). section 170(b)(1)(A)(iii). section 170(b)(1)(A)(iii). section 170(b)(1)(A)(iv). section 170(b)(1)(A)(v). section 170(b)(1)(A)(vi). section 170(b)(1)(A)(vi). section 170(b)(1)(A)(ix) section 509(a)(2). section 509(a)(4). section 509(a)(1) section 509(a)(2) section 509(a)(3). a b c d e f g Type I. You must complete Part IV, Sections A and B. Type II. You must complete Part IV, Sections A and C. Type III functionally integrated. You must complete Part IV, Sections A, D, and E. Type III non-functionally integrated. You must complete Part IV, Sections A and D, and Part V. Yes No Total For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.Schedule A (Form 990 or 990-EZ) 2016 (All organizations must complete this part.) See instructions. The organization is not a private foundation because it is: (For lines 1 through 12, check only one box.) A church, convention of churches, or association of churches described in A school described in (Attach Schedule E (Form 990 or 990-EZ).) A hospital or a cooperative hospital service organization described in A medical research organization operated in conjunction with a hospital described in Enter the hospital's name, city, and state: An organization operated for the benefit of a college or university owned or operated by a governmental unit described in (Complete Part II.) A federal, state, or local government or governmental unit described in An organization that normally receives a substantial part of its support from a governmental unit or from the general public described in (Complete Part II.) A community trust described in (Complete Part II.) An agricultural research organization described in operated in conjunction with a land-grant college or university or a non-land-grant college of agriculture (see instructions). Enter the name, city, and state of the college or university: An organization that normally receives: (1) more than 33 1/3% of its support from contributions, membership fees, and gross receipts from activities related to its exempt functions - subject to certain exceptions, and (2) no more than 33 1/3% of its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30, 1975. See (Complete Part III.) An organization organized and operated exclusively to test for public safety. See An organization organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more publicly supported organizations described in or . See Check the box in lines 12a through 12d that describes the type of supporting organization and complete lines 12e, 12f, and 12g. A supporting organization operated, supervised, or controlled by its supported organization(s), typically by giving the supported organization(s) the power to regularly appoint or elect a majority of the directors or trustees of the supporting organization. A supporting organization supervised or controlled in connection with its supported organization(s), by having control or management of the supporting organization vested in the same persons that control or manage the supported organization(s). A supporting organization operated in connection with, and functionally integrated with, its supported organization(s) (see instructions). A supporting organization operated in connection with its supported organization(s) that is not functionally integrated. The organization generally must satisfy a distribution requirement and an attentiveness requirement (see instructions). Check this box if the organization received a written determination from the IRS that it is a Type I, Type II, Type III functionally integrated, or Type III non-functionally integrated supporting organization. Enter the number of supported organizations ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Provide the following information about the supported organization(s). LHA www.irs.gov/form990. SCHEDULE A Part I Reason for Public Charity Status Public Charity Status and Public Support 2016 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 13 43 DRA F T Subtract line 5 from line 4. 632022 09-21-16 Calendar year (or fiscal year beginning in) Calendar year (or fiscal year beginning in) | 2 (a) (b) (c) (d) (e) (f) 1 2 3 4 5 Total. 6 Public support. (a) (b) (c) (d) (e) (f) 7 8 9 10 11 12 13 Total support. 12 First five years. stop here 14 15 14 15 16 17 18 a b a b 33 1/3% support test - 2016. stop here. 33 1/3% support test - 2015. stop here. 10% -facts-and-circumstances test - 2016. stop here. 10% -facts-and-circumstances test - 2015. stop here. Private foundation. Schedule A (Form 990 or 990-EZ) 2016 | Add lines 7 through 10 Schedule A (Form 990 or 990-EZ) 2016 Page (Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization fails to qualify under the tests listed below, please complete Part III.) 2012 2013 2014 2015 2016 Total Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.")~~ Tax revenues levied for the organ- ization's benefit and either paid to or expended on its behalf ~~~~ The value of services or facilities furnished by a governmental unit to the organization without charge ~ Add lines 1 through 3 ~~~ The portion of total contributions by each person (other than a governmental unit or publicly supported organization) included on line 1 that exceeds 2% of the amount shown on line 11, column (f)~~~~~~~~~~~~ 2012 2013 2014 2015 2016 Total Amounts from line 4 ~~~~~~~ Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources ~ Net income from unrelated business activities, whether or not the business is regularly carried on ~ Other income. Do not include gain or loss from the sale of capital assets (Explain in Part VI.) ~~~~ Gross receipts from related activities, etc. (see instructions) ~~~~~~~~~~~~~~~~~~~~~~~ If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501(c)(3) organization, check this box and •••••••••••••••••••••••••••••••••••••••••••••| ~~~~~~~~~~~~Public support percentage for 2016 (line 6, column (f) divided by line 11, column (f)) Public support percentage from 2015 Schedule A, Part II, line 14 % %~~~~~~~~~~~~~~~~~~~~~ If the organization did not check the box on line 13, and line 14 is 33 1/3% or more, check this box and The organization qualifies as a publicly supported organization ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | If the organization did not check a box on line 13 or 16a, and line 15 is 33 1/3% or more, check this box and The organization qualifies as a publicly supported organization ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | If the organization did not check a box on line 13, 16a, or 16b, and line 14 is 10% or more, and if the organization meets the "facts-and-circumstances" test, check this box and Explain in Part VI how the organization meets the "facts-and-circumstances" test. The organization qualifies as a publicly supported organization~~~~~~~~~~~~~~~ | If the organization did not check a box on line 13, 16a, 16b, or 17a, and line 15 is 10% or more, and if the organization meets the "facts-and-circumstances" test, check this box and Explain in Part VI how the organization meets the "facts-and-circumstances" test. The organization qualifies as a publicly supported organization ~~~~~~~~ | If the organization did not check a box on line 13, 16a, 16b, 17a, or 17b, check this box and see instructions ••• | Part II Support Schedule for Organizations Described in Sections 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi) Section A. Public Support Section B. Total Support Section C. Computation of Public Support Percentage DESTINATION MEDICAL CENTER CORPORATION 46-4959371 5,416,446. 3,605,187. 2,288,339. 11,309,972. 5,416,446. 3,605,187. 2,288,339. 11,309,972. 11,309,972. 5,416,446. 3,605,187. 2,288,339. 11,309,972. 1.1.1.3. 11,309,975. X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 14 44 DRA F T (Subtract line 7c from line 6.) Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of $5,000 or 1% of the amount on line 13 for the year (Add lines 9, 10c, 11, and 12.) 632023 09-21-16 Calendar year (or fiscal year beginning in) | Calendar year (or fiscal year beginning in) | Total support. 3 (a) (b) (c) (d) (e) (f) 1 2 3 4 5 6 7 Total. a b c 8 Public support. (a) (b) (c) (d) (e) (f) 9 10a b c 11 12 13 14 First five years. stop here 15 16 15 16 17 18 19 20 2016 2015 17 18 a b 33 1/3% support tests - 2016. stop here. 33 1/3% support tests - 2015. stop here. Private foundation. Schedule A (Form 990 or 990-EZ) 2016 Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975 Schedule A (Form 990 or 990-EZ) 2016 Page (Complete only if you checked the box on line 10 of Part I or if the organization failed to qualify under Part II. If the organization fails to qualify under the tests listed below, please complete Part II.) 2012 2013 2014 2015 2016 Total Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.")~~ Gross receipts from admissions, merchandise sold or services per- formed, or facilities furnished in any activity that is related to the organization's tax-exempt purpose Gross receipts from activities that are not an unrelated trade or bus- iness under section 513 ~~~~~ Tax revenues levied for the organ- ization's benefit and either paid to or expended on its behalf ~~~~ The value of services or facilities furnished by a governmental unit to the organization without charge ~ ~~~ Add lines 1 through 5 Amounts included on lines 1, 2, and 3 received from disqualified persons ~~~~~~ Add lines 7a and 7b ~~~~~~~ 2012 2013 2014 2015 2016 Total Amounts from line 6 ~~~~~~~ Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources ~ ~~~~ Add lines 10a and 10b ~~~~~~ Net income from unrelated businessactivities not included in line 10b, whether or not the business is regularly carried on ~~~~~~~ Other income. Do not include gainor loss from the sale of capitalassets (Explain in Part VI.)~~~~ If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501(c)(3) organization, check this box and ••••••••••••••••••••••••••••••••••••••••••••••••••••| Public support percentage for 2016 (line 8, column (f) divided by line 13, column (f)) Public support percentage from 2015 Schedule A, Part III, line 15 ~~~~~~~~~~~~% %•••••••••••••••••••• Investment income percentage for (line 10c, column (f) divided by line 13, column (f)) Investment income percentage from Schedule A, Part III, line 17 ~~~~~~~~% %~~~~~~~~~~~~~~~~~~ If the organization did not check the box on line 14, and line 15 is more than 33 1/3%, and line 17 is not more than 33 1/3%, check this box and The organization qualifies as a publicly supported organization ~~~~~~~~~~ | If the organization did not check a box on line 14 or line 19a, and line 16 is more than 33 1/3%, and line 18 is not more than 33 1/3%, check this box and The organization qualifies as a publicly supported organization~~~~ | If the organization did not check a box on line 14, 19a, or 19b, check this box and see instructions •••••••• | Part III Support Schedule for Organizations Described in Section 509(a)(2) Section A. Public Support Section B. Total Support Section C. Computation of Public Support Percentage Section D. Computation of Investment Income Percentage DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 15 45 DRA F T 632024 09-21-16 4 Yes No 1 2 3 4 5 6 7 8 9 10 1 2 3a 3b 3c 4a 4b 4c 5a 5b 5c 6 7 8 9a 9b 9c 10a 10b a b c a b c a b c a b c a b Type I or Type II only. Substitutions only. Schedule A (Form 990 or 990-EZ) 2016 If "No," describe in how the supported organizations are designated. If designated by class or purpose, describe the designation. If historic and continuing relationship, explain. If "Yes," explain in how the organization determined that the supported organization was described in section 509(a)(1) or (2). If "Yes," answer (b) and (c) below. If "Yes," describe in when and how the organization made the determination. If "Yes," explain in what controls the organization put in place to ensure such use. If "Yes," and if you checked 12a or 12b in Part I, answer (b) and (c) below. If "Yes," describe in how the organization had such control and discretion despite being controlled or supervised by or in connection with its supported organizations. If "Yes," explain in what controls the organization used to ensure that all support to the foreign supported organization was used exclusively for section 170(c)(2)(B) purposes. If "Yes," answer (b) and (c) below (if applicable). Also, provide detail in including (i) the names and EIN numbers of the supported organizations added, substituted, or removed; (ii) the reasons for each such action; (iii) the authority under the organization's organizing document authorizing such action; and (iv) how the action was accomplished (such as by amendment to the organizing document). If "Yes," provide detail in If "Yes," complete Part I of Schedule L (Form 990 or 990-EZ). If "Yes," complete Part I of Schedule L (Form 990 or 990-EZ). If "Yes," provide detail in If "Yes," provide detail in If "Yes," provide detail in If "Yes," answer 10b below. (Use Schedule C, Form 4720, to determine whether the organization had excess business holdings.) Schedule A (Form 990 or 990-EZ) 2016 Page (Complete only if you checked a box in line 12 on Part I. If you checked 12a of Part I, complete Sections A and B. If you checked 12b of Part I, complete Sections A and C. If you checked 12c of Part I, complete Sections A, D, and E. If you checked 12d of Part I, complete Sections A and D, and complete Part V.) Are all of the organization's supported organizations listed by name in the organization's governing documents? Did the organization have any supported organization that does not have an IRS determination of status under section 509(a)(1) or (2)? Did the organization have a supported organization described in section 501(c)(4), (5), or (6)? Did the organization confirm that each supported organization qualified under section 501(c)(4), (5), or (6) and satisfied the public support tests under section 509(a)(2)? Did the organization ensure that all support to such organizations was used exclusively for section 170(c)(2)(B) purposes? Was any supported organization not organized in the United States ("foreign supported organization")? Did the organization have ultimate control and discretion in deciding whether to make grants to the foreign supported organization? Did the organization support any foreign supported organization that does not have an IRS determination under sections 501(c)(3) and 509(a)(1) or (2)? Did the organization add, substitute, or remove any supported organizations during the tax year? Was any added or substituted supported organization part of a class already designated in the organization's organizing document? Was the substitution the result of an event beyond the organization's control? Did the organization provide support (whether in the form of grants or the provision of services or facilities) to anyone other than (i) its supported organizations, (ii) individuals that are part of the charitable class benefited by one or more of its supported organizations, or (iii) other supporting organizations that also support or benefit one or more of the filing organization's supported organizations? Did the organization provide a grant, loan, compensation, or other similar payment to a substantial contributor (defined in section 4958(c)(3)(C)), a family member of a substantial contributor, or a 35% controlled entity with regard to a substantial contributor? Did the organization make a loan to a disqualified person (as defined in section 4958) not described in line 7? Was the organization controlled directly or indirectly at any time during the tax year by one or more disqualified persons as defined in section 4946 (other than foundation managers and organizations described in section 509(a)(1) or (2))? Did one or more disqualified persons (as defined in line 9a) hold a controlling interest in any entity in which the supporting organization had an interest? Did a disqualified person (as defined in line 9a) have an ownership interest in, or derive any personal benefit from, assets in which the supporting organization also had an interest? Was the organization subject to the excess business holdings rules of section 4943 because of section 4943(f) (regarding certain Type II supporting organizations, and all Type III non-functionally integrated supporting organizations)? Did the organization have any excess business holdings in the tax year? Part VI Part VI Part VI Part VI Part VI Part VI Part VI, Part VI. Part VI. Part VI. Part VI. Part IV Supporting Organizations Section A. All Supporting Organizations DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 16 46 DRA F T 632025 09-21-16 5 Yes No 11 a b c 11a 11b 11c Yes No 1 2 1 2 Yes No 1 1 Yes No 1 2 3 1 2 3 1 2 3 a b c Yes No a b a b 2a 2b 3a 3b Schedule A (Form 990 or 990-EZ) 2016 If "Yes" to a, b, or c, provide detail in If "No," describe in how the supported organization(s) effectively operated, supervised, or controlled the organization's activities. If the organization had more than one supported organization, describe how the powers to appoint and/or remove directors or trustees were allocated among the supported organizations and what conditions or restrictions, if any, applied to such powers during the tax year. If "Yes," explain in how providing such benefit carried out the purposes of the supported organization(s) that operated, supervised, or controlled the supporting organization. If "No," describe in how control or management of the supporting organization was vested in the same persons that controlled or managed the supported organization(s). If "No," explain in how the organization maintained a close and continuous working relationship with the supported organization(s). If "Yes," describe in the role the organization's supported organizations played in this regard. Check the box next to the method that the organization used to satisfy the Integral Part Test during the year Complete below. Complete below. Describe in Part VI how you supported a government entity (see instructions). If "Yes," then in how these activities directly furthered their exempt purposes, how the organization was responsive to those supported organizations, and how the organization determined that these activities constituted substantially all of its activities. If "Yes," explain in the reasons for the organization's position that its supported organization(s) would have engaged in these activities but for the organization's involvement. Provide details in If "Yes," describe in the role played by the organization in this regard. Schedule A (Form 990 or 990-EZ) 2016 Page Has the organization accepted a gift or contribution from any of the following persons? A person who directly or indirectly controls, either alone or together with persons described in (b) and (c) below, the governing body of a supported organization? A family member of a person described in (a) above? A 35% controlled entity of a person described in (a) or (b) above? Did the directors, trustees, or membership of one or more supported organizations have the power to regularly appoint or elect at least a majority of the organization's directors or trustees at all times during the tax year? Did the organization operate for the benefit of any supported organization other than the supported organization(s) that operated, supervised, or controlled the supporting organization? Were a majority of the organization's directors or trustees during the tax year also a majority of the directors or trustees of each of the organization's supported organization(s)? Did the organization provide to each of its supported organizations, by the last day of the fifth month of the organization's tax year, (i) a written notice describing the type and amount of support provided during the prior tax year, (ii) a copy of the Form 990 that was most recently filed as of the date of notification, and (iii) copies of the organization's governing documents in effect on the date of notification, to the extent not previously provided? Were any of the organization's officers, directors, or trustees either (i) appointed or elected by the supported organization(s) or (ii) serving on the governing body of a supported organization? By reason of the relationship described in (2), did the organization's supported organizations have a significant voice in the organization's investment policies and in directing the use of the organization's income or assets at all times during the tax year? The organization satisfied the Activities Test. The organization is the parent of each of its supported organizations. The organization supported a governmental entity. Activities Test. Did substantially all of the organization's activities during the tax year directly further the exempt purposes of the supported organization(s) to which the organization was responsive? Did the activities described in (a) constitute activities that, but for the organization's involvement, one or more of the organization's supported organization(s) would have been engaged in? Parent of Supported Organizations. Did the organization have the power to regularly appoint or elect a majority of the officers, directors, or trustees of each of the supported organizations? Did the organization exercise a substantial degree of direction over the policies, programs, and activities of each of its supported organizations? Part VI. Part VI Part VI Part VI Part VI Part VI (see instructions). line 2 line 3 Answer (a) and (b) below. Part VI identify those supported organizations and explain Part VI Answer (a) and (b) below. Part VI. Part VI (continued)Part IV Supporting Organizations Section B. Type I Supporting Organizations Section C. Type II Supporting Organizations Section D. All Type III Supporting Organizations Section E. Type III Functionally Integrated Supporting Organizations DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 17 47 DRA F T 632026 09-21-16 6 1 See instructions. Section A - Adjusted Net Income 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8Adjusted Net Income Section B - Minimum Asset Amount 1 2 3 4 5 6 7 8 a b c d e 1a 1b 1c 1d 2 3 4 5 6 7 8 Total Discount Part VI Minimum Asset Amount Section C - Distributable Amount 1 2 3 4 5 6 7 1 2 3 4 5 6 Distributable Amount. Schedule A (Form 990 or 990-EZ) 2016 Schedule A (Form 990 or 990-EZ) 2016 Page Check here if the organization satisfied the Integral Part Test as a qualifying trust on Nov. 20, 1970 (explain in Part VI.) All other Type III non-functionally integrated supporting organizations must complete Sections A through E. (B) Current Year (optional)(A) Prior Year Net short-term capital gain Recoveries of prior-year distributions Other gross income (see instructions) Add lines 1 through 3 Depreciation and depletion Portion of operating expenses paid or incurred for production or collection of gross income or for management, conservation, or maintenance of property held for production of income (see instructions) Other expenses (see instructions) (subtract lines 5, 6, and 7 from line 4) (B) Current Year (optional)(A) Prior Year Aggregate fair market value of all non-exempt-use assets (see instructions for short tax year or assets held for part of year): Average monthly value of securities Average monthly cash balances Fair market value of other non-exempt-use assets (add lines 1a, 1b, and 1c) claimed for blockage or other factors (explain in detail in ): Acquisition indebtedness applicable to non-exempt-use assets Subtract line 2 from line 1d Cash deemed held for exempt use. Enter 1-1/2% of line 3 (for greater amount, see instructions) Net value of non-exempt-use assets (subtract line 4 from line 3) Multiply line 5 by .035 Recoveries of prior-year distributions (add line 7 to line 6) Current Year Adjusted net income for prior year (from Section A, line 8, Column A) Enter 85% of line 1 Minimum asset amount for prior year (from Section B, line 8, Column A) Enter greater of line 2 or line 3 Income tax imposed in prior year Subtract line 5 from line 4, unless subject to emergency temporary reduction (see instructions) Check here if the current year is the organization's first as a non-functionally integrated Type III supporting organization (see instructions). Part V Type III Non-Functionally Integrated 509(a)(3) Supporting Organizations DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 18 48 DRA F T 632027 09-21-16 7 Section D - Distributions Current Year 1 2 3 4 5 6 7 8 9 10 Part VI Total annual distributions. Part VI (i) Excess Distributions (ii) Underdistributions Pre-2016 (iii) Distributable Amount for 2016Section E - Distribution Allocations (see instructions) 1 2 3 4 5 6 7 8 a b c d e f g h i j Total a b c Excess distributions carryover to 2017. a b c d e Schedule A (Form 990 or 990-EZ) 2016 Schedule A (Form 990 or 990-EZ) 2016 Page Amounts paid to supported organizations to accomplish exempt purposes Amounts paid to perform activity that directly furthers exempt purposes of supported organizations, in excess of income from activity Administrative expenses paid to accomplish exempt purposes of supported organizations Amounts paid to acquire exempt-use assets Qualified set-aside amounts (prior IRS approval required) Other distributions (describe in ). See instructions Add lines 1 through 6 Distributions to attentive supported organizations to which the organization is responsive (provide details in ). See instructions Distributable amount for 2016 from Section C, line 6 Line 8 amount divided by Line 9 amount Distributable amount for 2016 from Section C, line 6 Underdistributions, if any, for years prior to 2016 (reason- able cause required- explain in Part VI). See instructions Excess distributions carryover, if any, to 2016: From 2013 From 2014 From 2015 of lines 3a through e Applied to underdistributions of prior years Applied to 2016 distributable amount Carryover from 2011 not applied (see instructions) Remainder. Subtract lines 3g, 3h, and 3i from 3f. Distributions for 2016 from Section D, line 7:$ Applied to underdistributions of prior years Applied to 2016 distributable amount Remainder. Subtract lines 4a and 4b from 4 Remaining underdistributions for years prior to 2016, if any. Subtract lines 3g and 4a from line 2. For result greater than zero, explain in Part VI. See instructions Remaining underdistributions for 2016. Subtract lines 3h and 4b from line 1. For result greater than zero, explain in Part VI. See instructions Add lines 3j and 4c Breakdown of line 7: Excess from 2013 Excess from 2014 Excess from 2015 Excess from 2016 (continued) Part V Type III Non-Functionally Integrated 509(a)(3) Supporting Organizations DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 19 49 DRA F T 632028 09-21-16 8 Schedule A (Form 990 or 990-EZ) 2016 Schedule A (Form 990 or 990-EZ) 2016 Page Provide the explanations required by Part II, line 10; Part II, line 17a or 17b; Part III, line 12; Part IV, Section A, lines 1, 2, 3b, 3c, 4b, 4c, 5a, 6, 9a, 9b, 9c, 11a, 11b, and 11c; Part IV, Section B, lines 1 and 2; Part IV, Section C, line 1; Part IV, Section D, lines 2 and 3; Part IV, Section E, lines 1c, 2a, 2b, 3a, and 3b; Part V, line 1; Part V, Section B, line 1e; Part V, Section D, lines 5, 6, and 8; and Part V, Section E, lines 2, 5, and 6. Also complete this part for any additional information. (See instructions.) Part VI Supplemental Information. DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 20 50 DRA F T OMB No. 1545-0047 Department of the Treasury Internal Revenue Service 623451 10-18-16 Schedule B (Form 990, 990-EZ, or 990-PF) (2016) (Form 990, 990-EZ,or 990-PF)| Attach to Form 990, Form 990-EZ, or Form 990-PF. | Information about Schedule B (Form 990, 990-EZ, or 990-PF) and its instructions is at . Name of the organization Employer identification number Organization type Filers of:Section: not General Rule Special Rule. Note: General Rule Special Rules (1) (2) General Rule Caution: must For Paperwork Reduction Act Notice, see the Instructions for Form 990, 990-EZ, or 990-PF. exclusively exclusively exclusively nonexclusively (check one): Form 990 or 990-EZ 501(c)( ) (enter number) organization 4947(a)(1) nonexempt charitable trust treated as a private foundation 527 political organization Form 990-PF 501(c)(3) exempt private foundation 4947(a)(1) nonexempt charitable trust treated as a private foundation 501(c)(3) taxable private foundation Check if your organization is covered by the or a Only a section 501(c)(7), (8), or (10) organization can check boxes for both the General Rule and a Special Rule. See instructions. For an organization filing Form 990, 990-EZ, or 990-PF that received, during the year, contributions totaling $5,000 or more (in money or property) from any one contributor. Complete Parts I and II. See instructions for determining a contributor's total contributions. For an organization described in section 501(c)(3) filing Form 990 or 990-EZ that met the 33 1/3% support test of the regulations under sections 509(a)(1) and 170(b)(1)(A)(vi), that checked Schedule A (Form 990 or 990-EZ), Part II, line 13, 16a, or 16b, and that received from any one contributor, during the year, total contributions of the greater of $5,000 or 2% of the amount on (i) Form 990, Part VIII, line 1h, or (ii) Form 990-EZ, line 1. Complete Parts I and II. For an organization described in section 501(c)(7), (8), or (10) filing Form 990 or 990-EZ that received from any one contributor, during the year, total contributions of more than $1,000 for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Complete Parts I, II, and III. For an organization described in section 501(c)(7), (8), or (10) filing Form 990 or 990-EZ that received from any one contributor, during the year, contributions for religious, charitable, etc., purposes, but no such contributions totaled more than $1,000. If this box is checked, enter here the total contributions that were received during the year for an religious, charitable, etc., purpose. Don't complete any of the parts unless the applies to this organization because it received religious, charitable, etc., contributions totaling $5,000 or more during the year ~~~~~~~~~~~~~~~ | $ An organization that isn't covered by the General Rule and/or the Special Rules doesn't file Schedule B (Form 990, 990-EZ, or 990-PF), but it answer "No" on Part IV, line 2, of its Form 990; or check the box on line H of its Form 990-EZ or on its Form 990-PF, Part I, line 2, to certify that it doesn't meet the filing requirements of Schedule B (Form 990, 990-EZ, or 990-PF). LHA www.irs.gov/form990 Schedule B Schedule of Contributors 2016 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 X 3 X 51 DRA F T 623452 10-18-16 Name of organization Employer identification number Schedule B (Form 990, 990-EZ, or 990-PF) (2016) (a) No. (b) Name, address, and ZIP + 4 (c) Total contributions (d) Type of contribution Person Payroll Noncash (a) No. (b) Name, address, and ZIP + 4 (c) Total contributions (d) Type of contribution Person Payroll Noncash (a) No. (b) Name, address, and ZIP + 4 (c) Total contributions (d) Type of contribution Person Payroll Noncash (a) No. (b) Name, address, and ZIP + 4 (c) Total contributions (d) Type of contribution Person Payroll Noncash (a) No. (b) Name, address, and ZIP + 4 (c) Total contributions (d) Type of contribution Person Payroll Noncash (a) No. (b) Name, address, and ZIP + 4 (c) Total contributions (d) Type of contribution Person Payroll Noncash Schedule B (Form 990, 990-EZ, or 990-PF) (2016)Page (See instructions). Use duplicate copies of Part I if additional space is needed. $ (Complete Part II for noncash contributions.) $ (Complete Part II for noncash contributions.) $ (Complete Part II for noncash contributions.) $ (Complete Part II for noncash contributions.) $ (Complete Part II for noncash contributions.) $ (Complete Part II for noncash contributions.) 2 Part I Contributors DESTINATION MEDICAL CENTER CORPORATION 46-4959371 1 CITY OF ROCHESTER X 201 4TH STREET SE 2,288,339. ROCHESTER, MN 55904 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 22 52 DRA F T 623453 10-18-16 Name of organization Employer identification number Schedule B (Form 990, 990-EZ, or 990-PF) (2016) (a) No. from Part I (c) FMV (or estimate) (See instructions) (b) Description of noncash property given (d) Date received (a) No. from Part I (c) FMV (or estimate) (See instructions) (b) Description of noncash property given (d) Date received (a) No. from Part I (c) FMV (or estimate) (See instructions) (b) Description of noncash property given (d) Date received (a) No. from Part I (c) FMV (or estimate) (See instructions) (b) Description of noncash property given (d) Date received (a) No. from Part I (c) FMV (or estimate) (See instructions) (b) Description of noncash property given (d) Date received (a) No. from Part I (c) FMV (or estimate) (See instructions) (b) Description of noncash property given (d) Date received Schedule B (Form 990, 990-EZ, or 990-PF) (2016)Page (See instructions). Use duplicate copies of Part II if additional space is needed. $ $ $ $ $ $ 3 Part II Noncash Property DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 23 53 DRA F T (Enter this info. once.) For organizations completing Part III, enter the total of exclusively religious, charitable, etc., contributions of $1,000 or less for the year. 623454 10-18-16 Name of organization Employer identification number religious, charitable, etc., contributions to organizations described in section 501(c)(7), (8), or (10) that total more than $1,000 forthe year from any one contributor. (a) (e) and Schedule B (Form 990, 990-EZ, or 990-PF) (2016) (a) No.fromPart I (b) Purpose of gift (c) Use of gift (d) Description of how gift is held (e) Transfer of gift Transferee's name, address, and ZIP + 4 Relationship of transferor to transferee (a) No.fromPart I (b) Purpose of gift (c) Use of gift (d) Description of how gift is held (e) Transfer of gift Transferee's name, address, and ZIP + 4 Relationship of transferor to transferee (a) No.fromPart I (b) Purpose of gift (c) Use of gift (d) Description of how gift is held (e) Transfer of gift Transferee's name, address, and ZIP + 4 Relationship of transferor to transferee (a) No.fromPart I (b) Purpose of gift (c) Use of gift (d) Description of how gift is held (e) Transfer of gift Transferee's name, address, and ZIP + 4 Relationship of transferor to transferee Complete columns through the following line entry. Schedule B (Form 990, 990-EZ, or 990-PF) (2016)Page | $ Use duplicate copies of Part III if additional space is needed. Exclusively 4 Part III DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 24 54 DRA F T OMB No. 1545-0047 Department of the Treasury Internal Revenue Service 632051 08-29-16 Held at the End of the Tax Year (Form 990)| Complete if the organization answered "Yes" on Form 990,Part IV, line 6, 7, 8, 9, 10, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b.| Attach to Form 990.| Information about Schedule D (Form 990) and its instructions is at Open to PublicInspection Name of the organization Employer identification number (a) (b) 1 2 3 4 5 6 Yes No Yes No 1 2 3 4 5 6 7 8 9 a b c d 2a 2b 2c 2d Yes No Yes No 1 2 a b (i) (ii) a b For Paperwork Reduction Act Notice, see the Instructions for Form 990.Schedule D (Form 990) 2016 Complete if the organization answered "Yes" on Form 990, Part IV, line 6. Donor advised funds Funds and other accounts Total number at end of year Aggregate value of contributions to (during year) Aggregate value of grants from (during year) Aggregate value at end of year ~~~~~~~~~~~~~~~ ~~~~ ~~~~~~ ~~~~~~~~~~~~~ Did the organization inform all donors and donor advisors in writing that the assets held in donor advised funds are the organization's property, subject to the organization's exclusive legal control?~~~~~~~~~~~~~~~~~~ Did the organization inform all grantees, donors, and donor advisors in writing that grant funds can be used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit?•••••••••••••••••••••••••••••••••••••••••••• Complete if the organization answered "Yes" on Form 990, Part IV, line 7. Purpose(s) of conservation easements held by the organization (check all that apply). Preservation of land for public use (e.g., recreation or education) Protection of natural habitat Preservation of open space Preservation of a historically important land area Preservation of a certified historic structure Complete lines 2a through 2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year. Total number of conservation easements Total acreage restricted by conservation easements ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ Number of conservation easements on a certified historic structure included in (a) Number of conservation easements included in (c) acquired after 8/17/06, and not on a historic structure listed in the National Register ~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during the tax year | Number of states where property subject to conservation easement is located | Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and enforcement of the conservation easements it holds? ~~~~~~~~~~~~~~~~~~~~~~~~~ Staff and volunteer hours devoted to monitoring, inspecting, handling of violations, and enforcing conservation easements during the year | Amount of expenses incurred in monitoring, inspecting, handling of violations, and enforcing conservation easements during the year | $ Does each conservation easement reported on line 2(d) above satisfy the requirements of section 170(h)(4)(B)(i) and section 170(h)(4)(B)(ii)? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ In Part XIII, describe how the organization reports conservation easements in its revenue and expense statement, and balance sheet, and include, if applicable, the text of the footnote to the organization's financial statements that describes the organization's accounting for conservation easements. Complete if the organization answered "Yes" on Form 990, Part IV, line 8. If the organization elected, as permitted under SFAS 116 (ASC 958), not to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part XIII, the text of the footnote to its financial statements that describes these items. If the organization elected, as permitted under SFAS 116 (ASC 958), to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide the following amounts relating to these items: Revenue included on Form 990, Part VIII, line 1 Assets included in Form 990, Part X ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | $ $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the following amounts required to be reported under SFAS 116 (ASC 958) relating to these items: Revenue included on Form 990, Part VIII, line 1 Assets included in Form 990, Part X ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | $ $••••••••••••••••••••••••••••••••••• | LHA www.irs.gov/form990. Part I Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Part II Conservation Easements. Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets. SCHEDULE D Supplemental Financial Statements 2016 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 25 55 DRA F T 632052 08-29-16 3 4 5 a b c d e Yes No 1 2 a b c d e f a b Yes No 1c 1d 1e 1f Yes No (a) (b) (c) (d) (e) 1 2 3 4 a b c d e f g a b c a b Yes No (i) (ii) 3a(i) 3a(ii) 3b (a) (b) (c) (d) 1a b c d e Total. Schedule D (Form 990) 2016 (continued) (Column (d) must equal Form 990, Part X, column (B), line 10c.) Two years back Three years back Four years back Schedule D (Form 990) 2016 Page Using the organization's acquisition, accession, and other records, check any of the following that are a significant use of its collection items (check all that apply): Public exhibition Scholarly research Preservation for future generations Loan or exchange programs Other Provide a description of the organization's collections and explain how they further the organization's exempt purpose in Part XIII. During the year, did the organization solicit or receive donations of art, historical treasures, or other similar assets to be sold to raise funds rather than to be maintained as part of the organization's collection? •••••••••••• Complete if the organization answered "Yes" on Form 990, Part IV, line 9, or reported an amount on Form 990, Part X, line 21. Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not included on Form 990, Part X? If "Yes," explain the arrangement in Part XIII and complete the following table: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Amount Beginning balance Additions during the year Distributions during the year Ending balance ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Did the organization include an amount on Form 990, Part X, line 21, for escrow or custodial account liability? If "Yes," explain the arrangement in Part XIII. Check here if the explanation has been provided on Part XIII ~~~~~ ••••••••••••• Complete if the organization answered "Yes" on Form 990, Part IV, line 10. Current year Prior year Beginning of year balance Contributions Net investment earnings, gains, and losses Grants or scholarships ~~~~~~~ ~~~~~~~~~~~~~~ ~~~~~~~~~ Other expenditures for facilities and programs Administrative expenses End of year balance ~~~~~~~~~~~~~ ~~~~~~~~ ~~~~~~~~~~ Provide the estimated percentage of the current year end balance (line 1g, column (a)) held as: Board designated or quasi-endowment Permanent endowment Temporarily restricted endowment The percentages on lines 2a, 2b, and 2c should equal 100%. |% |% |% Are there endowment funds not in the possession of the organization that are held and administered for the organization by: unrelated organizations related organizations ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If "Yes" on line 3a(ii), are the related organizations listed as required on Schedule R? Describe in Part XIII the intended uses of the organization's endowment funds. ~~~~~~~~~~~~~~~~~~~~ Complete if the organization answered "Yes" on Form 990, Part IV, line 11a. See Form 990, Part X, line 10. Description of property Cost or other basis (investment) Cost or other basis (other) Accumulated depreciation Book value Land Buildings Leasehold improvements ~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~ Equipment Other ~~~~~~~~~~~~~~~~~ •••••••••••••••••••• Add lines 1a through 1e. |••••••••••••• 2 Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets Part IV Escrow and Custodial Arrangements. Part V Endowment Funds. Part VI Land, Buildings, and Equipment. DESTINATION MEDICAL CENTER CORPORATION 46-4959371 0. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 26 56 DRA F T (including name of security) 632053 08-29-16 Total. Total. (a) (b) (c) (1) (2) (3) (a) (b) (c) (1) (2) (3) (4) (5) (6) (7) (8) (9) (a) (b) (1) (2) (3) (4) (5) (6) (7) (8) (9) Total. (a) (b) 1. Total. 2. Schedule D (Form 990) 2016 (Column (b) must equal Form 990, Part X, col. (B) line 15.) (Column (b) must equal Form 990, Part X, col. (B) line 25.) Description of security or category (Col. (b) must equal Form 990, Part X, col. (B) line 12.) | (Col. (b) must equal Form 990, Part X, col. (B) line 13.) | Schedule D (Form 990) 2016 Page Complete if the organization answered "Yes" on Form 990, Part IV, line 11b. See Form 990, Part X, line 12. Book value Method of valuation: Cost or end-of-year market value Financial derivatives Closely-held equity interests Other ~~~~~~~~~~~~~~~ ~~~~~~~~~~~ (A) (B) (C) (D) (E) (F) (G) (H) Complete if the organization answered "Yes" on Form 990, Part IV, line 11c. See Form 990, Part X, line 13. Description of investment Book value Method of valuation: Cost or end-of-year market value Complete if the organization answered "Yes" on Form 990, Part IV, line 11d. See Form 990, Part X, line 15. Description Book value ••••••••••••••••••••••••••••| Complete if the organization answered "Yes" on Form 990, Part IV, line 11e or 11f. See Form 990, Part X, line 25. Description of liability Book value (1) (2) (3) (4) (5) (6) (7) (8) (9) Federal income taxes ••••• | Liability for uncertain tax positions. In Part XIII, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC 740). Check here if the text of the footnote has been provided in Part XIII 3 Part VII Investments - Other Securities. Part VIII Investments - Program Related. Part IX Other Assets. Part X Other Liabilities. DESTINATION MEDICAL CENTER CORPORATION 46-4959371 ADVANCE TO DMC EDA 50,000. DUE FROM OTHER GOVERNMENTS 298,507. 348,507. DUE TO OTHER GOVERNMENTS 51,000. 51,000. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 27 57 DRA F T 632054 08-29-16 1 2 3 4 5 1 a b c d e 2a 2b 2c 2d 2a 2d 2e 32e 1 a b c 4a 4b 4a 4b 3 4c. 4c 5 1 2 3 4 5 1 a b c d e 2a 2b 2c 2d 2a 2d 2e 1 2e 3 a b c 4a 4b 4a 4b 3 4c. 4c 5 Schedule D (Form 990) 2016 (This must equal Form 990, Part I, line 12.) (This must equal Form 990, Part I, line 18.) Schedule D (Form 990) 2016 Page Complete if the organization answered "Yes" on Form 990, Part IV, line 12a. Total revenue, gains, and other support per audited financial statements Amounts included on line 1 but not on Form 990, Part VIII, line 12: ~~~~~~~~~~~~~~~~~~~ Net unrealized gains (losses) on investments Donated services and use of facilities Recoveries of prior year grants Other (Describe in Part XIII.) ~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ Add lines through ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Subtract line from line ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Amounts included on Form 990, Part VIII, line 12, but not on line 1: Investment expenses not included on Form 990, Part VIII, line 7b Other (Describe in Part XIII.) ~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ Add lines and Total revenue. Add lines and ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ••••••••••••••••• Complete if the organization answered "Yes" on Form 990, Part IV, line 12a. Total expenses and losses per audited financial statements Amounts included on line 1 but not on Form 990, Part IX, line 25: ~~~~~~~~~~~~~~~~~~~~~~~~~~ Donated services and use of facilities Prior year adjustments Other losses Other (Describe in Part XIII.) ~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ Add lines through Subtract line from line ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Amounts included on Form 990, Part IX, line 25, but not on line 1: Investment expenses not included on Form 990, Part VIII, line 7b Other (Describe in Part XIII.) ~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ Add lines and Total expenses. Add lines and ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ •••••••••••••••• Provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part IV, lines 1b and 2b; Part V, line 4; Part X, line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information. 4 Part XI Reconciliation of Revenue per Audited Financial Statements With Revenue per Return. Part XII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return. Part XIII Supplemental Information. DESTINATION MEDICAL CENTER CORPORATION 46-4959371 2,288,340. 0. 2,288,340. 0. 2,288,340. 2,288,340. 0. 2,288,340. 0. 2,288,340. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 28 58 DRA F T OMB No. 1545-0047 Department of the Treasury Internal Revenue Service 632211 08-25-16 Information about Schedule O (Form 990 or 990-EZ) and its instructions is at Complete to provide information for responses to specific questions onForm 990 or 990-EZ or to provide any additional information.| Attach to Form 990 or 990-EZ.| (Form 990 or 990-EZ) Open to PublicInspection Employer identification number For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.Schedule O (Form 990 or 990-EZ) (2016) Name of the organization LHA www.irs.gov/form990. SCHEDULE O Supplemental Information to Form 990 or 990-EZ 2016 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 FORM 990, PART I, LINE 1, DESCRIPTION OF ORGANIZATION MISSION: MINNESOTA. FORM 990, PART III, LINE 1, DESCRIPTION OF ORGANIZATION MISSION: AND SUPPORTING THE ECONOMIC GROWTH OF MINNESOTA AND ITS BIOSCIENCES SECTOR. FORM 990, PART VI, SECTION A, LINE 7B: ANNUAL FUNDING REQUESTS ARE SUBJECT TO FINAL APPROVAL BY THE CITY OF ROCHESTER CITY COUNCIL. FORM 990, PART VI, SECTION B, LINE 11B: THE 990 WILL BE PRESENTED AT A BOARD MEETING PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C: THE DMCC MUST FOLLOW THE CONFLICT OF INTEREST REQUIREMENTS OF MINNESOTA STATUTES, SECTION 469.41, SUBD. 9. IN ADDITION, THE DMCC DIRECTORS ARE PUBLIC OFFICIALS UNDER MINNESOTA STATUTES SECTION 10A.01, SUBD. 35. SEE MINN. STAT. SECTION 469.41, SUBD. 10. PUBLIC OFFICIALS ARE SUBJECT TO STATUTORY CONFLICT OF INTEREST REQUIREMENTS. MINN. STAT. SECTION 10A.07. FORM 990, PART VI, SECTION B, LINE 15: DESTINATION MEDICAL CENTER CORPORATION DOES NOT HAVE ANY EMPLOYEES. FORM 990, PART VI, SECTION C, LINE 19: THE DESTINATION MEDICAL CENTER CORPORATION IS SUBJECT TO THE MINNESOTA 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 29 59 DRA F T 632212 08-25-16 2 Employer identification number Schedule O (Form 990 or 990-EZ) (2016) Schedule O (Form 990 or 990-EZ) (2016)Page Name of the organization DESTINATION MEDICAL CENTER CORPORATION 46-4959371 GOVERNMENT DATA PRACTICES ACT AND OPEN MEETING LAW, AND THEREFORE MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE UPON REQUEST. FORM 990, PART XII, LINE 2C THE CORPORATION'S BOARD OF DIRECTORS ASSUMES RESPONSIBILITY FOR OVERSIGHT OF THE AUDIT OF ITS FINANCIAL STATEMENTS AND THE SELECTION OF ITS INDEPENDENT ACCOUNTANT. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 30 60 DRA F T OMB No. 1545-0047 Department of the TreasuryInternal Revenue Service Section 512(b)(13) controlled entity? 632161 09-06-16 SCHEDULE R (Form 990)Complete if the organization answered "Yes" on Form 990, Part IV, line 33, 34, 35b, 36, or 37. Attach to Form 990. Open to PublicInspection| Information about Schedule R (Form 990) and its instructions is at Employer identification number Part I Identification of Disregarded Entities. (a)(b)(c)(d)(e)(f) Identification of Related Tax-Exempt Organizations. Part II (a)(b)(c)(d)(e)(f)(g) Yes No For Paperwork Reduction Act Notice, see the Instructions for Form 990.Schedule R (Form 990) 2016 | | Name of the organization Complete if the organization answered "Yes" on Form 990, Part IV, line 33. Name, address, and EIN (if applicable) of disregarded entity Primary activity Legal domicile (state or foreign country) Total income End-of-year assets Direct controlling entity Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related tax-exemptorganizations during the tax year. Name, address, and EIN of related organization Primary activity Legal domicile (state or foreign country) Exempt Code section Public charity status (if section 501(c)(3)) Direct controlling entity LHA www.irs.gov/form990. Related Organizations and Unrelated Partnerships 2016 DESTINATION MEDICAL CENTER CORPORATION 46-4959371 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY - 46-4893585, 200 1ST PROVIDE SERVICES TO THE STREET SW, ROCHESTER, MN 55905 DMCC MINNESOTA 501(C)(3) LINE 12A, I N/A X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 31 61 DRA F T Disproportionate allocations? Legal domicile (state or foreign country) General or managing partner? Section512(b)(13)controlledentity? Legal domicile (state or foreign country) 632162 09-06-16 2 Identification of Related Organizations Taxable as a Partnership. Part III (a)(b)(c)(d)(e)(f)(g)(h)(i) (j) (k) Yes No Yes No Identification of Related Organizations Taxable as a Corporation or Trust. Part IV (a)(b)(c)(d)(e)(f)(g)(h) (i) Yes No Schedule R (Form 990) 2016 Predominant income(related, unrelated,excluded from tax undersections 512-514) Schedule R (Form 990) 2016 Page Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more relatedorganizations treated as a partnership during the tax year. Name, address, and EINof related organization Primary activity Direct controllingentity Share of totalincome Share ofend-of-yearassets Code V-UBIamount in box20 of ScheduleK-1 (Form 1065) Percentageownership Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more relatedorganizations treated as a corporation or trust during the tax year. Name, address, and EINof related organization Primary activity Direct controllingentity Type of entity(C corp, S corp,or trust) Share of totalincome Share ofend-of-yearassets Percentageownership DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 32 62 DRA F T 632163 09-06-16 3 Part V Transactions With Related Organizations. Note:Yes No 1 a b c d e f g h i j k l m n o p q r s (i) (ii) (iii) (iv) 1a 1b 1c 1d 1e 1f 1g 1h 1i 1j 1k 1l 1m 1n 1o 1p 1q 1r 1s 2 (a)(b)(c)(d) (1) (2) (3) (4) (5) (6) Schedule R (Form 990) 2016 Schedule R (Form 990) 2016 Page Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35b, or 36. Complete line 1 if any entity is listed in Parts II, III, or IV of this schedule. During the tax year, did the organization engage in any of the following transactions with one or more related organizations listed in Parts II-IV? Receipt of interest, annuities, royalties, or rent from a controlled entity ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Gift, grant, or capital contribution to related organization(s) Gift, grant, or capital contribution from related organization(s) Loans or loan guarantees to or for related organization(s) Loans or loan guarantees by related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dividends from related organization(s)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Sale of assets to related organization(s) Purchase of assets from related organization(s) Exchange of assets with related organization(s) Lease of facilities, equipment, or other assets to related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Lease of facilities, equipment, or other assets from related organization(s) Performance of services or membership or fundraising solicitations for related organization(s) Performance of services or membership or fundraising solicitations by related organization(s) Sharing of facilities, equipment, mailing lists, or other assets with related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Sharing of paid employees with related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Reimbursement paid to related organization(s) for expenses Reimbursement paid by related organization(s) for expenses ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Other transfer of cash or property to related organization(s) Other transfer of cash or property from related organization(s) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ •••••••••••••••••••••••••••••••••••••••••••••••••••••••• If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds. Name of related organization Transaction type (a-s) Amount involved Method of determining amount involved DESTINATION MEDICAL CENTER CORPORATION 46-4959371 X X X X X X X X X X X X X X X X X X X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 33 63 DRA F T Are allpartners sec.501(c)(3)orgs.? Dispropor-tionate allocations? General or managing partner? 632164 09-06-16 Yes No Yes No Yes N 4 Part VI Unrelated Organizations Taxable as a Partnership. (a)(b)(c)(d)(e)(f)(g)(h) (i) (j) (k) o Schedule R (Form 990) 2016 Predominant income(related, unrelated,excluded from tax undersections 512-514) Code V-UBIamount in box 20of Schedule K-1(Form 1065) Schedule R (Form 990) 2016 Page Complete if the organization answered "Yes" on Form 990, Part IV, line 37. Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships. Name, address, and EIN of entity Primary activity Legal domicile (state or foreign country) Share of total income Share of end-of-year assets Percentage ownership DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 34 64 DRA F T 632165 09-06-16 5 Schedule R (Form 990) 2016 Schedule R (Form 990) 2016 Page Provide additional information for responses to questions on Schedule R. See instructions. Part VII Supplemental Information. DESTINATION MEDICAL CENTER CORPORATION 46-4959371 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 35 65 60094104-01-16 ~~~~~~~~~~~~~~~~~ FOR THE YEAR ENDING Prepared for Prepared by Amount due or refund Make check payable to Mail tax return and check (if applicable) to Return must be mailed on or before Special Instructions TAX RETURN FILING INSTRUCTIONS MINNESOTA ANNUAL REPORT DECEMBER 31, 2016 DESTINATION MEDICAL CENTER CORPORATION 201 4TH STREET SE NO. 204 ROCHESTER, MN 55904 CLIFTONLARSONALLEN LLP P.O. BOX 217 AUSTIN, MN 55912 507-434-7000 BALANCE DUE OF $25.00 STATE OF MINNESOTA OFFICE OF THE ATTORNEY GENERAL SUITE 1200, BREMER TOWER 445 MINNESOTA STREET ST. PAUL, MN 55101-2130 NOVEMBER 15, 2017 THE REPORT SHOULD BE SIGNED AND DATED BY THE AUTHORIZED INDIVIDUAL(S). INCLUDE THE ORGANIZATION'S FEDERAL EMPLOYER IDENTIFICATION NUMBER AND "2016 ANNUAL REPORT" ON THE REMITTANCE. 66 DRA F T 685471 02-06-17 C2 Website Address: Legal Name of Organization Federal EIN:Fiscal Year-End: Mailing Address:Physical Address: www.ag.state.mn.us/charity Minnesota Attorney General's Office Charities Division 445 Minnesota Street, Suite 1200 St. Paul, MN 55101-2130 (Pursuant to Minn. Stat. ch. 309) mm/dd/yyyy Did the organization's fiscal year-end change? Yes No Contact Person Contact Person Street Address Street Address City, State, and ZIP Code City, State, and ZIP Code Phone Number Phone Number Email Address Email Address 1. 2. 3. 4. 5. 6. 7. Organization's website: List all of the organization's alternate and former names (attach list if more space is needed). Alternate Former Alternate Former List all names under which the organization solicits contributions (attach list if more space is needed). Is the organization incorporated pursuant to Minn. Stat. ch. 317A?Yes No Total amount of contributions the organization received from Minnesota donors:$ Has the organization's tax-exempt status with the IRS changed? Yes No If yes, attach explanation. Has the organization significantly changed its purpose(s) or program(s)? Yes No If yes, attach explanation. Mail To: SECTION A: Organization Information STATE OF MINNESOTA CHARITABLE ORGANIZATION ANNUAL REPORT FORM DESTINATION MEDICAL CENTER CORPORATION 46-4959371 12/31/2016 X DALE MARTINSON DALE MARTINSON 201 4TH STREET SE 201 4TH STREET SE ROCHESTER, MN 55904 ROCHESTER, MN 55904 507-328-2850 507-328-2850 DMARTINSON@ROCHESTERMN.GOV DMARTINSON@ROCHESTERMN.GOV WWW.DMC.MN DESTINATION MEDICAL CENTER CORPORATION X 2,288,339. X X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 2 67 DRA F T 685472 02-06-17 C2 Note: Name and title Compensation* Other compensation See 8. 9. 10. 11. Has the organization been denied the right to solicit contributions by any court or government agency? Yes No If yes, attach explanation. Does the organization use the services of a professional fundraiser (outside solicitor or consultant) to solicit contributions in Minnesota? Yes No If yes, provide the following information for each (attach list if more space is needed): Name of Professional Fundraiser Compensation Street Address City, State, and ZIP Code Is the organization a food shelf? Yes No If yes, is the organization required to file an audit? Yes, audit attached No An organization that has total revenue of more than $750,000 is required to file an audit prepared in accordance with generally accepted accounting principles by an independent CPA or LPA. The value of donated food to a nonprofit food shelf may be excluded from the total revenue if the food is donated for subsequent distribution at no charge and is not resold. Do any directors, officers, or employees of the organization or its related organization(s) receive total compensation* of more than $100,000? Yes No If yes, provide the following information for the five highest paid individuals: *Compensation is defined as the total amount reported on Form W-2 (Box 5) or Form 1099-MISC (Box 7) issued by the organization and its related organizations to the individual. Minn. Stat. ¤ 309.53, subd. 3(i) and Minn. Stat. ¤ 317A.011 for definitions. CHARITABLE ORGANIZATION ANNUAL REPORT FORM (Continued) X X X X 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 3 68 DRA F T 685473 02-06-17 C2 5.$5 9 10 14 18 9. 10. $ $ 14.$ 18.$ $ This section must be completed by organizations that file an IRS Form 990-EZ, 990-PF, or 990-N. Organizations that file an IRS Form 990 may skip Section B and go directly to Section C. 1. 2. 3. 4. Contributions Received $ $ $ $ 1 2 3 4 6 7 8 11 12 13 15 16 17 Government Grants Program Service Revenue Other Revenue 6. 7. 8. Program Expenses $ $ $ Management & General Expenses Fund-raising Expenses (Line 5 minus Line 9) 11. 12. 13. Cash $ $ $ Land, Buildings & Equipment Other Assets 15. 16. 17. Accounts Payable $ $ $ Grants Payable Other Liabilities (Line 14 minus Line 18) TOTAL INCOME TOTAL EXPENSES EXCESS or DEFICIT TOTAL ASSETS TOTAL LIABILITIES CHARITABLE ORGANIZATION ANNUAL REPORT FORM (Continued) SECTION B: Financial Information INCOME EXPENSES ASSETS LIABILITIES FUND BALANCE/NET WORTH 2,288,339. 1. 2,288,340. 2,015,029. 273,311. 2,288,340. 905. 361,505. 362,410. 298,412. 63,998. 362,410. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 4 69 DRA F T 685474 02-06-17 Total functional expenses. C2 (A)(B)(C)(D) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. a. b. c. d. e. f. g. a. b. c. d. Joint costs. Grants and other assistance to individuals in the U.S. Compensation not included above, to disqualified persons (as defined under section 4958(f)(1) and persons described in section 4958(c)(3)(B) (include section 401(k) and section 403(b) employer contributions) Add lines 1 through 24d This expense statement must be prepared in accordance with generally accepted accounting principles. Each column must be completed, and Columns B, C, and D must equal Column A. The amount on Line 25, Column A must match Line 17 of IRS Form 990-EZ or Line 26 of IRS Form 990-PF. Total expenses Program serviceexpenses Management andgeneral expenses Fundraisingexpenses Grants and other assistance to governments and organizations in the U.S. Grants and other assistance to governments, organizations, and individuals outside the U.S. Benefits paid to or for members Compensation of current officers, directors, trustees, and key employees Other salaries and wages Pension plan contributions Other employee benefits Payroll taxes Fees for services (non-employees): Management Legal Accounting Lobbying Professional fundraising services Investment management fees Other Advertising and promotion Office expenses Information technology Royalties Occupancy Travel Payments of travel or entertainment expenses for any federal, state, or local public officials Conferences, conventions, and meetings Interest Payments to affiliates Depreciation, depletion, and amortization Insurance Other expenses. Itemize expenses not covered above. Expenses labeled miscellaneous may not exceed 5% of total expenses (Line 25). Check here | if following SOP 98-2. Complete this line only if the organi-zation reported in Column B joint costs from acombined educational campaign andfundraising solicitation CHARITABLE ORGANIZATION ANNUAL REPORT FORM (Continued) Section B (continued): Statement of Functional Expenses 217,195.217,195. 4,000.4,000. 17,333.17,333. 18,907.18,907. 573.573. 682.682. 15,303.15,303. PROGRAM COSTS 2,014,347. 2,014,347. 2,288,340. 2,015,029. 273,311. 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 5 70 DRA F T 685475 02-06-17 C2 See The form must be executed pursuant to a resolution of the board of directors, trustees, or managing group and must be signed by two officers of the organization. Minn. Stat. ¤ 309.52, subd. 3. We, the undersigned, state and acknowledge that we are duly constituted officers of this organization, being the (Title) and (Title) respectively, and that we execute this document on behalf of the organization pursuant to the resolution of the (Board of Directors, Trustees, or Managing Group) adopted on the day of , 20 , approving the contents of the document, and do hereby certify that the (Board of Directors, Trustees, or Managing Group) has assumed, and will continue to assume, responsibility for determining matters of policy, and have supervised, and will continue to supervise, the operations and finances of the organization. We further state that the information supplied is true, correct and complete to the best of our knowledge. Name (Print)Name (Print) Signature Signature Title Title Date Date CHARITABLE ORGANIZATION ANNUAL REPORT FORM (Continued) Section C: Board of Directors Signatures and Acknowledgment TREASURER CHAIR BOARD OF DIRECTORS BOARD OF DIRECTORS JAMES V. BIER TINA FLINT SMITH TREASURER CHAIR 09590616 132902 094-08292400 2016.04000 DESTINATION MEDICAL CENTER 094-94G1 6 71 This Page is Intentionally Left Blank 72 DESTINATION MEDICAL CENTER CORPORATION RESOLUTION NO. -2017 Approving the Mortenson Phase 1 Discovery Square Development Project, Contingent Upon Evidence of Financing BACKGROUND RECITALS B. A.Under Minnesota Statutes, Section 469.41 Subdivision 13, a project must be approved by the Destination Medical Center Corporation ("DMCC") before it is proposed to the City of Rochester (the "City"). The DMCC must review the proposed project for consistency with the Development Plan, adopted by the DMCC on April 23, 2015, as amended (the "Development Plan"). B.By correspondence to the DMCC dated July 18, 2017, and attached hereto as Exhibit A, the City has requested approval of the Mortenson Phase 1 Discovery Square Development Project (the "Proposed Project"), and that City expenditures and financing in the amount of up to $4,750,000 be credited to the City's $128,000,000 local contribution as required by statute. The City's expenditures and financing include funding from tax increment financing bonds. C.Pursuant to Minnesota Statutes, Section 469.47, subdivision 4, the City's local match contribution may be provided by the City from any source identified in Minn. Stat. Section 469.45 and any other local tax proceeds or other funds from the City and may include providing funds to assist developers undertaking projects in accordance with the Development Plan or by the City directly undertaking public infrastructure projects in accordance with the Development Plan, provided the projects have been approved by the DMCC. D.Pursuant to Minn. Stat. Section 469.45, Subdivision 4, the City may elect to establish one or more redevelopment tax increment financing districts within the Development District to fund public infrastructure projects. E.Minnesota Statutes, Section 469.40, subdivision 11, defines "public infrastructure project" as "a project financed in part or in whole with public money in order to support the medical business entity's development plans, as identified in the DMCC development plan" and expressly includes, among other items, the ability to ... (2) demolish, repair or rehabilitate buildings; (3) remediate land and buildings as required to prepare the property for acquisition and development; (4) install, construct, or reconstruct elements of public infrastructure required to support the overall development of the destination medical center development district including, but not limited to, streets, roadways, utilities systems and related facilities, utility relocations and replacements, network and communication systems, streetscape improvements, drainage systems, sewer and water systems, subgrade structures and 73 associated improvements, landscaping, facade construction and restoration, wayfinding and signage, and other components of community infrastructure; . . . (7) make related site improvements including, without limitation, excavation, earth retention, soil stabilization and correction, and site improvements to support the destination medical center development district; [ and] (8) prepare land for private development and to sell or lease land .... F.The site of the Proposed Project is located in the development district boundaries as adopted in the Development Plan (the "Development District") and in the Discovery Square district as described in the Development Plan. G.On April 27, 2017, the DMCC approved Resolution No. 51-2017, which requires additional review of projects upon material deviation from the approvals granted, to ensure that "as-built" projects are consistent with approvals that have been granted. H.The City and the Destination Medical Center Economic Development Agency (the "EDA") have examined the Proposed Project applying the evaluation factors contained in the Development Plan, and now recommend the Proposed Project for approval. Copies of those reports are available and on file with the City and the EDA. RESOLUTION NOW, THEREFORE, BE IT RESOLVED, by the Destination Medical Center Corporation Board of Directors, that the DMCC finds that the Proposed Project is a public infrastructure project within the meaning of Minnesota Statutes, Section 469.40, subdivision 11, which provides for: demolishing, repairing or rehabilitating buildings; remediating land and buildings as required to prepare the property for acquisition or development; installing, constructing or reconstructing elements of public infrastructure required to support the overall development of the Development District; acquiring, constructing or reconstructing, or equipping parking facilities and other facilities to encourage intermodal transportation and public transit; making related site improvements; and preparing land for private development; and that the DMCC approves the Proposed Project as consistent with the Development Plan. BE IT FURTHER RESOLVED, that the DMCC approves the Proposed Project for the purposes of Minnesota Statutes, Section 469.47, subdivision 4, and supports the certification of the City's expenditures ofup to $4,750,000 in tax increment financing identified in the Proposed Project, upon final approval by the City, subject to approval and certification by the State of Minnesota, Department of Employment and Economic Development, as part of the City's $128,000,000 local contribution. BE IT FURTHER RESOLVED, that the approvals contained herein are expressly contingent upon evidence of financing satisfactory to the Board, such evidence to be presented within 90 days concurrent with the 90 day period set forth in the City's approved development assistance agreement. BE IT FURTHER RESOLVED, that DMCC Resolution No. 51-2017 is incorporated fully herein by reference. 2 74 BE IT FURTHER RESOLVED, that the Chair or the Treasurer of the DMCC is authorized to take such actions as are necessary and appropriate to effectuate the findings and approvals of this Resolution. 886095-3. DOCX 3 75 This Page is Intentionally Left Blank 76 ROCHESTER ---�/2/leoota--- FIRST CLASS CITY • FIRST CLASS SERVICE July 18, 2017 Tina Smith Chair, DMCC Board of Directors 130 State Capital 75 Rev. Dr. Martin Luther King Jr. Boulevard St. Paul, MN 55155 TERRY A SPAETH Redevelopment Director City Administrator's Office 201 4th Street S.E., Room 266 Rochester, MN 55904-3781 507-328-2000 Fax 507-328-2727 Re: DMCC Board approval for the Mortenson Phase I Discovery Square Development Project Dear Chair Smith and DMCC Boardmembers: The City of Rochester provides the following information relating to the Mortenson Phase I Discovery Square Project for your consideration at your July 27, 2017 meeting. 1.DMCC Board action requested. Grant approval of the prepared resolution to approve the Mortenson Phase I Discovery Square Project {herein after "Project") as a DMC Public Infrastructure Project that is consistent with the DMC Development Plan. The approval as a DMC public infrastructure project by the DMCC Board is required before the City Council can act to approve it as a DMC Public Infrastructure Project. Such approval would need to be made contingent upon the City of Rochester's subsequent approval of the Project as a DMC Public Infrastructure Project and of the Development Assistance Agreement {DAA) for the Project. 2.Current project status/schedule. The City of Rochester has land use, planning and zoning authority for all projects in the City including within the DMC Development Plan Area. In addition the City has the authority to provide financial assistance, if needed, to assist in the development of projects through Tax Increment Financing {TIF) including the authority to establish TIF districts within the DMC Development Plan area. The DMC legislation authorizes the City's use of TIF for DMC projects and to receive credit for the TIF financial assistance provided to DMCC Board approved projects towards the City's required $128 Million local contribution. a.Land Use and Zoning Status. The developer has been meeting with City staff regarding the zoning/ land use requirements for the project. Based upon the proposed project, the staff has indicated the project is subject to approval of a Site Development Permit, which is an "over the counter'' review and approval and does not require public review of the project. To date, a Site Development Permit application has not yet been submitted. It is anticipated the application will be submitted in the near future. b.Establishment of Tax Increment Financing (TIF) District and Development Assistance Agreement (DAA) AND APPROVAL AS A PUBLIC INFRASTRUCTURE PROJECT INCLUDED IN THE :;J11 'Equa[ Opportunity 'D11p(o!,er EXHIBIT A 77 DEVELOPMENT PLAN. The land use approvals would allow the Project to proceed to construction by the developer and are independent of any financial assistance considerations or approval as a DMC Public Infrastructure Project. However, the Developer has indicated the Project would not be able to proceed to construction and be financially feasible without or "but for" some financial assistance from the City or the DMCC. The developer has provided detailed financial information to document the need for $5.5 Million in assistance to close the financial "gap" for this Project. As the DMCC Board is aware, the potential receipt of State DMC funding will grow over time but is lower/limited in these years until private capital investments increase well beyond the minimum threshold for early State DMC funding of $200 Million. As both an alternative to State DMC funding to fund early stage DMC projects and in order to retain future bonding capacity for future DMC capital needs, the City can utilize its authority to establish a tax increment financing district within the DMC Development Plan Area to provide financial assistance through TIF to allow the project to proceed. The City Council will consider establishment of a tax increment district and terms and conditions of a Development Assistance Agreement (DAA) at its August 7, 2017 meeting, contingent upon final land use approval. In instances in which the City provides TIF financing for DMC Public Infrastructure Projects, the State legislation makes provision for the City to obtain credit for such costs towards its required $128 Million City DMC contribution. For the Mortenson Phase I Discovery Square Development project the staff will be recommending to the Mayor and City Council that the City provide $4.75 million of tax increment financing assistance for this Project. The Council will consider this as a component of the Development Assistance Agreement (DAA) at their meeting on August 7, 2017. It should be noted that the City staff has been working closely with the DMC EDA staff in the review of all aspects of this Project including the proposed amount of financial assistance that is recommended for the Project. The DMC EDA will be providing their comments on the Project separately and independently from the City staff. The DMC EDA staff and the City staff are in agreement concerning the recommended amount of assistance and the developer has indicated that they can proceed with the Project with the recommended $4.75 million level of assistance. Approval by the DMCC Board of the Mortenson Phase I Discovery Square Project as a DMC Public Infrastructure Project will also mean that DMC provisions relating to prevailing wage rates, WMBE, and American-made steel will also apply for the construction of the Project. The City staffs review of the financial information provided by the developer which showed a financing gap, was based on our experience in reviewing many other TIF projects over the years and a financial analysis of the submitted developer information by Springsted, Inc., the City's financial consultant, which performs such reviews for many communities. The public assistance comprises approximately 1/71h of the project development cost. 3.Financial Impact Information. The request for public funding, as a proposed Public Infrastructure Project, is what requires DMCC approval before the presentation to the City Council. a.Mortenson Phase I Discovery Square Capital Project Investment. 78 (1)General State Infrastructure Aid (GSIA). The project developers have submitted information that shows that the overall project cost is estimated at $35 Million. That $35 Million investment is multiplied by 2.75% to determine the amount of General State Infrastructure Aid (GSIA) payments that investment may be equal to annually, which is $962,500. (2)State Transit Aid (STA). That same $35 Million investment amount is multiplied by 0.75% to determine the State Transit Aid (STA)annual payment equivalent amount, which is $262,500 per year payable annually over several years, but lower in earlier years. An estimated 40% of the annual STA amount would be from the required local match provided by Olmsted County. (3)City TIF Contribution. The State GSIA can only be received if sufficient matching dollars have been spent by the City at the rate of $1 City to secure $2.55 GSIA. The proposed City TIF contribution of $4.75 Million is multiplied by 2.55 to determine the amount of GSIA that can be secured over time from that $4.75 million matching contribution, which is $12,112,500 4.Summary of the Proposed Project. a.The applicant is proposing a 4 story, 89,000 square foot building that provides for a combination of leased office and lab space. The project is located south of 4th Street SW, between 2 nd and 3 rd Avenue SW and is located within the DMC Discovery Square subzone. The project also provides for 150-160 surface parking spaces on the southerly portion of the development site. b.Mortenson intends to construct a Bio Science Building that will be the first research building within Discovery Square. The building will include lab, office and collaborative spaces. The building will be approximately 89,000 gross square feet, or 80,000 rentable square feet. Mayo Clinic will lease 30,000 rentable square feet of the Building. The remaining 50,000 rentable square feet are being marketed to educators and to small, medium and large size companies whose presence within the building will help accomplish the mission of Discovery Square, which is to accelerate the translation of medicine from bench to bedside. 5.How does the proposed Project address the DMC Development Plan goals and objectives? (these are addressed more thoroughly in the developer's application and in the DMC EDA report, but these are a few that the City staff would note): a.The Project is within the DMC Discovery Square subzone and the proposed development acts as a catalyst for future job growth by providing opportunities for educational and collaborative space within the Discovery Square subzone. b.The Project will provide a capital investment of $35 million within the DMC Development Plan area. c.The Project has the potential to create 400 new jobs with living wage levels. 79 d.The Project develops an underutilized property (surface parking) in a manner that is consistent with the Rochester Downtown Master Plan and the City's Comprehensive Plan. e.The project incorporates various sustainability elements, which is consistent with the DMC vision. f.The project construction will include wage rates, WMBE and American made steel provisions. Terry Spaeth Redevelopment Director 80 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY To: Lt. Governor Tina Smith, Chair, and members of Destination Medical Center Corporation board of directors From: Jeff Bolton, President, Destination Medical Center Economic Development Agency board of directors Lisa Clarke, Executive Director, Destination Medical Center Economic Development Agency Date: July 21, 2017 Re: Mortenson Phase 1 Discovery Square Development Project The DMC EDA board of directors recommends the Mortenson Discovery Square Project to the DMC Corporation board of directors as a Public Infrastructure Project consistent with the DMC Development Plan. The DMC EDA board of directors recommends the following items be incorporated into the Project by the developer: attain LEED certification by the Green Building Certification Institute; pursue, in conjunction with appropriate consultants, the awarding of New Market Tax Credits; and allow ongoing audit of the project. The DMC EDA further recommended the amount of $4.75 million in city Tax Increment Financing. Our findings and recommendations are included in the enclosed report and based on a thorough independent review of the project using the criteria established by DMC Corporation. Additionally, this recommendation aligns with the City of Rochester's recommendation. Thank you for considering this recommendation. Jeff Bolton President, Board of Directors Lisa Clarke Executive Director 81 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 1 Mortenson Phase 1 Discovery Square Development Evaluation Report July 21, 2017 EXECUTIVE SUMMARY / RECOMMENDATION STATEMENT OF RECOMMENDATION: Based on information provided by Mortenson Development Inc. (the “Applicant”), the Proposed Project aligns with the Destination Medical Center (“DMC”) vision and is consistent with the DMC goals, objectives and values. Discovery Square sub district is a key component of the overarching Destination Medical Center initiative and, as an anchoring project, will be one of the first critical steps toward achieving the transformative vision for downtown Rochester. The Proposed Project has the capacity to be a catalyst for the revitalization of downtown Rochester and along with other projects in Discovery Square is anticipated to be one of the largest drivers of job growth for DMC. The following complete report evaluates the Proposed Project on all criteria as required by the Development Plan. Based on these criteria, the Destination Medical Center Economic Development Agency (“DMC EDA”) would categorize the Proposed Project as a high priority DMC project that has immense potential to help realize the vision, goals and objectives of the DMC initiative. We recommend that the applicant shall, in its design, meet all requirements to attain LEED certification and perform the necessary acts to be granted this certification through the Green Building Certification Institute. In addition, we recommend that the applicant shall pursue New Markets Tax Credits (NMTC). If credits are awarded, the financial value of such will be put to towards the overall assistance requested by the applicant. The combination of the TIF assistance and the NMTC may total $5.5 million. The amount of TIF assistance awarded shall be reduced by the NMTC to achieve the $5.5 million total award. But, the total amount of TIF assistance and NMTC will not be less than $4.75 million. We further recommend an on-going financial audit to ensure the project built is consistent with the project proposed and approved. It is understood that the applicant will provide all requested documentation to facilitate this audit and work in good faith with representatives of the DMCC and DMC EDA, or their consultants, in this process. STATEMENT OF ELIGIBILITY: Based upon information provided by Mortenson Development Inc. the proposed Discovery Square – Phase 1 Development Project is a “public infrastructure project” under the DMC Act, and the Proposed Project falls within the DMC Development District boundaries (Discovery Square Sub district). PROJECT SUMMARY: The Applicant intends to construct a Bioscience Building that will be the first research building within Discovery Square. The building will include lab, office, collaborative and, potentially, retail spaces. Currently, the building is rendered to be approximately 89,000 gross square feet, or 80,000 rentable square feet. Mayo Clinic will lease 30,000 rentable square feet of the building. The remaining 50,000 rentable square feet are being marketed to educators and to small, medium and large size companies whose presence within the building will help accomplish the mission of Discovery Square, which is to accelerate the translation of medicine from bench to bedside. Discovery Square Phase 1 will be new construction. Currently, the majority of the site is comprised of surface parking. A Mayo-owned building is occupied on the southwest corner of the site at 428 3rd Ave Southwest. 82 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 2 With Mayo Clinic as the anchor tenant, Phase 1 will create a tremendous long-term presence for the site, provide a new home for a diverse set of tenants that will grow the local economy, and be a significant addition to the City’s tax base. Phase 1 will include the infrastructure required to absorb biomedical and life science tenants. Without Phase 1, the market lacks the infrastructure required to attract and retain tenants that need lab space to grow their business and collaborate alongside of Mayo Clinic. RELEVANT PROJECT HIGHLIGHTS: The following list outlines relevant project highlights for consideration: • General Project Information o Located in Discovery Square DMC Sub district o 80,000 rentable square feet o Activates the ground floor with collaborative space and a public café space o Project will provide quality, high density innovation and lab space within a priority DMC sub district • Job Creation o Phase 1 building will be able to support approximately 325 long-term jobs o It will create approximately 400 short-term construction jobs • Energy & Sustainability o Project projected to perform 20% below energy code (ASHRAE 90.1 – 2010) o Project will have interior and exterior bike racks as well as a shower facility for occupants o Development will accomplish storm water management through the contemplative use of site materials and vegetation o Project committed to sharing utility data through 2030 • Financial Details o Provides capital investment of $35 million o Local property taxes will increase from $68,136 to a proposed $485,580 per year. $417,444 in tax increments generated annually. 83 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 3 EVALUATION REPORT SECTION 1.0 PROJECT OVERVIEW The Applicant intends to construct a Bioscience Building that will be the first research building within Discovery Square. The building will include lab, office, collaborative and, potentially, retail spaces. Currently, the building is rendered to be approximately 89,000 gross square feet, or 80,000 rentable square feet. Mayo Clinic will lease 30,000 rentable square feet of the building. The remaining 50,000 rentable square feet are being marketed to educators and to small, medium and large size companies whose presence within the building will help accomplish the mission of Discovery Square, which is to accelerate the translation of medicine from bench to bedside. Discovery Square Phase 1 will be new construction. Currently, the majority of the site is surface parking with a Mayo-owned building occupying the southwest corner of the site at 428 3rd Ave Southwest. With Mayo Clinic as the anchor tenant, Phase 1 will create a tremendous long-term presence for the site, provide a new home for a diverse set of tenants that will grow the local economy, and be a significant addition to the City’s tax base. Phase 1 will include the infrastructure required to absorb biomedical and life science tenants. Without Phase 1, the market lacks the infrastructure required to attract and retain tenants that need lab space to grow their business and collaborate alongside of Mayo Clinic. The project total is projected to be $35,003,767 and the requested TIF amount in this application is $5,500,000. SECTION 2.0 MINIMUM ELIGIBILITY REQUIREMENTS OF DMC ACT Check the following that apply to the Project: "Public Infrastructure Project" General Infrastructure Project or Within DMC Development District Boundaries In order for a project to be eligible for DMC Funding, the project must be (1) a “public infrastructure project” and (2) within the DMC Development District Boundaries. Per Minnesota Statutes, Section 469.40, Subdivision 11, a “Public Infrastructure Project” is described as a project financed in part or in whole with public money to support Mayo Clinic’s development plans, as identified in the DMCC Development Plan, the Proposed Project would qualify as a “Public Infrastructure Project” as required by the DMC Act. The Applicant has a detailed list of infrastructure related improvements, to which would be eligible for TIF funding. The developer documented infrastructure items include: Remediation, utility connections, streetscape improvements (sidewalk, landscaping and public elements), future subway access, vacation and utility relocations, DMC goal of energy efficiency, enhanced fenestration for public transparency of science on display, infrastructure upgrades to support Phase I building, soil excavation and earth retention system. The total cost for these improvements is estimated to be $6,925,000 which exceeds the total amount of TIF requested. The Proposed Project is within the DMC Development District Boundaries. 84 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 4 SECTION 3.0 EVALUATION CRITERIA The EDA’s recommendation for the project outlined herein was formed in consideration of the following criteria: 3.1 DMC Vision, Goals and Objectives / Development Plan Strategies 3.2 Consistency with Development Plan and Other Planning Documents 3.3 Financial Viability 3.4 Consistency with Adopted Strategies, Phasing and Capital Improvement Planning 3.5 Targeted Business Enterprise Strategies 3.6 Compliance with Economic---Fiscal Goals and Objectives 3.7 Other Project Policy Considerations 85 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 5 SECTION 3.1 DMC VISION, GOALS AND OBJECTIVES / DEVLOPMENT PLAN STRATEGIES Does the project include a plan for achieving the DMC vision, goals and objectives and is it critical to driving the strategies included in the Development Plan? Is the project consistent with the stated DMC Goals & Objectives and specifically contributing to job creation? • Does the project meet one or more of the goals and objectives established for the Development Plan? The Proposed Project provides the DMC’s flagship life science facility in Discovery Square. The Project’s importance and relevance to the Development Plan cannot be understated; it is critically important to the economic development plans of the district. It’s estimated the facility will provide 325 life science focused positions to support the growing DMC labor pool. Is the project consistent with the DMC Vision? • Is the project part of a bold and aspirational concept for the future? The Proposed Project is consistent with the DMC vision of creating a place to Live, Work, Play and Thrive. It’s meant to be the center of innovation for Discovery Square and to help uncover and highlight the miracles within Mayo. Further, it offers a means of collaboration and unparalleled access to the innovation and research at Mayo Clinic; a truly transformational opportunity. With a need of 800,000 – 1,000,000 SF of life science space, this project is the catalyst for innovation in Discovery Square. • Does the project fit with the principles of the vision? “With Mayo Clinic at its heart, the Destination Medical Center (DMC) initiative will be the catalyst to position Rochester, MN as the world’s premier destination center for health and wellness; attracting people, investment and jobs to America’s City for Health and supporting the economic growth of Minnesota and its biosciences sector.” We believe the proposed project aligns with this core principle as it will serve as a physical example of the support and growth of the life sciences sector in Rochester and Minnesota as a whole. • Does the project provide a framework for growth in this sub---district? The Project will occupy what is presently a parking lot and block owned by Mayo Clinic. As mentioned above, the project will be flagship facility for Discovery Square and the first facility focused on the growth of the life science sector in Rochester. By redeveloping a parking lot, this Project embodies the development and the ideal for growth in the sub-district. Does the project build infrastructure to support growth and drive investment? • Would the investment occur without the public infrastructure to be funded? The Proposed Project does support growth in the form of life science jobs and a physical space to house the innovation desired for the Discovery Square sub-district. The Applicant states they would be challenged economically if the incentives were not provided; based on our own independent analysis, we concur. To achieve the primary mission of Discovery Square as the innovation center of the DMC District, public infrastructure funding will need to be provided to realize the mission of the facility. There is a lack of lab and research building space in Rochester, and its needed to support the Discovery Square concept which include: (1) an anchor building for the sub-district; (2) a public gathering space that caters to a variety of users and visitors; (3) provides auxiliary space to allow tenants to collaborate and innovate, and (4) helps generate momentum within the sub-district and DMC around the life sciences sector. 86 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 6 • Is the proposed public infrastructure solely for the benefit of the project or does it also support the broader vision of the DMC District? As identified in the Infrastructure Master Plan, there are six (6) key areas of infrastructure requirements: (1) public utilities, (2) bridges, subways and skyways, (3) shared parking, (4) parcel development, (5) civic uses, cultural uses and public amenities, and (6) technology improvement. Any incentives given to this Proposed Project are not solely for the benefit of the project but to the benefit of the greater DMC vision and improvements to the local streetscape environment. The Proposed Project includes elements encouraging pedestrian engagement, focuses on parcels that are underutilized. • Will the public funding accelerate private investment in the Development District or applicable sub district? The Proposed Project will likely continue a compounding reaction for development in the Discovery Square market. The Project is meant to act as the catalyst for future development and job growth within the district. As the flagship facility, its development is tied closely to the strategy, growth and success of Discovery Square. Does the project provide a catalyst for/or anchor for an approved strategy? • Can the project reasonably be expected to catalyze or anchor development in one of the six sub districts? The Proposed Project will be the catalyst for the Discovery Square sub-district and the home of life science innovation. It’s considered to be the anchor for the sub-district and generate momentum for other developments. • Can the project reasonably be expected to catalyze necessary transportation/transit strategies? The Proposed Project will encourage the use of alternate means of transportation with the availability of bike storage and a shower for bike commuters. Moreover, as part of its design, a pedestrian corridor will be established at the NW corner, at the intersection of 2nd avenue and 4th street to encourage pedestrians to walk along Discovery Walk – a corridor connecting to Heart of the City. One item to note is that the Project is constructed upon an existing parking lot, so parking is being removed for the development. Moreover, fewer spots are being constructed in their stead, and new jobs and people will be filling these positions. Examples of development like this moving forward could create a parking issue in the downtown DMC area moving forward. SECTION 3.2 CONSISTENCY WITH DEVELOPMENT PLAN, OTHER PLANNING DOCUMENTS Does the project include a plan for achieving consistency with the Development Plan (and any updates thereto) and other relevant planning documents? Is the project consistent with the DMC Planning Documents? • Is the project consistent with the current DMC Master Plan, Transportation Master Plan, and/or Infrastructure Master Plan? The Proposed Project fits well with the vision and principles of the DMC Master Plan. It’s essential to the success of the Discovery Square sub-district. It’s also consistent with the transportation and infrastructure master plans. 87 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 7 • Is the project consistent and/or supportive of the Finance Plan, Business Development Plan and other Implementation strategies of the DMC? Yes, a key strategy of these plans is to develop space to engage, develop and promote the life science sector. This project provides a key resource to support this mission and concept with the aim that it will continue to support future private development in the sub-district. Is the project consistent with the City/County Planning Documents? • Is the project consistent with the RDMP Plan or City Comprehensive Pan? Yes, the proposed project is consistent with the RDMP Plan as a block suitable for redevelopment in the hopes of achieving higher density in the downtown core, recruiting new businesses to the City, and repurposing ground level parking lots. • If a Transit/Transportation project, is the project consistent with the ROCOG long---range Transportation Plan? The ROCOG model was utilized for DMC to determine the effects of development and transportation system changes. One main area of the model considers the trips generated by land uses and activities. The Proposed Project will have limited impact on the current traffic flow, in addition the project is designed to incorporate various options for alternate transportation to reduce the single-vehicle traffic flow in the Development District. One item to note, as described above is that the Project provides less parking than it is replacing. Further, the project will bring new employees to the downtown area, so there is a net loss of parking in this area. If more projects in the future use a similar approach, significant issues may be created. This method will be one to monitor and address as future projects are proposed. Does the project support sustainability principles as a core objective in the development and operations of the project? Yes, the Proposed Project will support sustainability principles and execute current best practices. In addition, there is an emphasis on sustainable initiatives in energy efficiency, alternative transportation, sustainable site selection, and water efficiency. • Energy Efficiency – Based on early energy modeling efforts, the project is on track to meet the project energy goal included in the DMC Plan of a 20% reduction below ASHRAE 90.1-2010, Minnesota’s energy code. Through a combination of a highly efficient envelope and HVAC system, the building is showing a considerable reduction below a baseline building built to current code standards. • Sustainable Site Selection – As a means to connect the flagship facility of Discovery Square to other sub-districts, the project focused on landscaping and the user experience around the building. Through native vegetation selection that negates the need for a permanent irrigation system, on-site storm water storage, outdoor seating, among other strategies, the project incorporates numerous strategies to reduce its environmental impact and create an active street. • Indoor Environmental Quality – Offices will have access to abundant natural daylight and views through expansive glazing. • Materials and Resources –The building includes a dedicated area for collection and removal of recyclable materials and the project has committed to sharing waste and recycling data throughout the construction process. Further, the project is committed to explore materials that will promote the health of building occupants and visitors. • Water Efficiency – The project will reduce its burden on municipal water supply by including the use of low-flow consumption fixtures and fittings. 88 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 8 SECTION 3.3 FINANCIAL VIABILITY [Form may vary based on size/scope of project] Does the project include a plan that is financially viable? Does the project include: Project Summary (e.g. concepts, detailed program, project team, etc.) Total Project Budget Sources of funding, demonstrating a verifiable gap that justifies DMC Funding Project Operating Pro Forma including an overview of any operations and maintenance funding that may be required A Project Plan and/or Market Study supporting the demand/need for the project Demonstration of financial capacity to support the project Is the project supported by current market conditions and comprehensive feasibility studies? The Proposed Project is supported by research performed by HR&A, a consulting firm retained by the Applicant to provide a market feasibility analysis. Based on the consultant’s analysis of the property’s location, demographic characteristics and growth trends of the target populations and current rental market conditions in the area that a market rate general occupancy wet-lab and office development will be well-received in the marketplace. While the report indicates potential rates of between $22 and $26 psf (per square foot) on a triple net basis. At this time, the applicant has indicated that it has Letters of Intent (LOI) with Mayo Clinic for 30,000 sf (square foot), University of Minnesota-Rochester has a signed LOI for approximately 15,000 sf. The Applicant is presently in negotiations with another potential credit tenant for 10,000 sf and a smaller tenant for 2,500 square feet for a total of 57,000 potential pre-leased space. All of this space will be a combination of wet-lab space as well as general office. This amounts to 71% of the available rental space that could conceivably be pre-leased before construction begins. The expectation is that the project will 100% leased by 2021. Does the project leverage additional private funds, maximizing the use of DMC Funds? Of the approximate $35,000,000 million dollars in total project costs, private funds will consist of $11,800,000 in equity and $17,700,000 private debt financing which would maximize the requested $5,500,000 DMC Funding. The Applicant has indicated the use of the TIF funds to secure a mortgage that would run with the property and be paid through the funds generated by the TIF financing. We have looked the project both with a TIF mortgage (a mortgage secured through TIF funds) and as direct cash flow. We have concluded the Applicants method of securing a TIF mortgage is a proper method of financing. Is the preliminary project finance plan comprehensive and viable based upon Project Team and financial capacity? The project has demonstrated financial feasibility and a plan for long-term viability. The funding request that the Applicant has proposed will support various aspects of the project including the improvement of current public infrastructure, addition of parking stalls which contributes to the reduction in traffic flow, and enhances the public spaces and amenities surrounding the development. These, along with other costs of the proposed project are considered to be TIF eligible expenses. 89 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 9 Is the project inclusive of an Operation and Maintenance pro forma? The Proposed Project’s operating pro forma includes net operating income, TIF reimbursement, and debt service; as calculated, it suggests that the initial cash flow after debt service is to be approximately $500,000 and growing in each successive year as projected rents increase. The overall structure of the building leases is desired to be triple net, whereby the tenants pay for their prorated share of expenses to the building. The landlord is responsible for setting aside an adequate amount for capital improvements to the property. The property on which the project will be constructed is presently owned by Mayo Clinic. The Applicant and Mayo Clinic have agreed to enter into a ground lease. The terms of this lease are based on fair market value of the property based on an independent appraisal. Additionally, Mayo will be a tenant in the building, occupying 30,000 square feet. The lease rate for this space is at fair market value. Is there a verifiable gap for funding based upon a reasonable return on private investment? The pro-forma as submitted by the developer shows a gap of approximately $5,500,000. We agree that this project has a potential short-fall and has a list of eligible items that fall within the funding guidelines. However, a separate analysis indicates that this gap may be smaller than shown by the developer. The discrepancies center around the following assumptions. Rental Rates for the project Lease up time frame Leasing scenarios Rates of return desired vs market Further discussions with the applicant are planned to determine the proper assumptions based on the current market and the desire for potential tenants to be in this building. Is the proposed operating structure sustainable? The proposed cash flows demonstrate that the project will cover the operating costs and debt service which will provide an acceptable return on investment. As with most projects of this type the going in returns are lower and as the rents increase with a stabilized expense structure the net operating income and cash flow (NOI, CF) increase thus increasing the margins and increasing the value of the property. Does the Project impose any financial obligations on the DMC or City for ongoing operational or maintenance support? No. Has the project applicant agreed to execute the DMC Development Agreement? Yes. SECTION 3.4 CONSISTENCY WITH ADOPTED STRATEGIES, PHASING, AND CAPITAL IMPROVEMENT PLANNING Is the project consistent with adopted strategies and/or one or more projects for the current implementation phase of the DMC initiative? Is the project part of an approved strategy and current focus? Is the project outlined as an approved strategy for the project within the Development Plan? 90 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 10 The Proposed Project is in the Discovery Square subdistrict, one of the top three priorities for the DMCC. It leverages a relationship with Mayo Clinic to launch the life science innovation district. The tenanting strategy is intentionally set up to attract bio-science companies new to this market place, either start-up or established companies. Is the project recommended as a focus for the particular phase of the project in the Development Plan? The Proposed Project is recommended as a focus for Phase 1 of the Development Plan. The current focus in this phase revolves around development in Discovery Square. Is the project consistent with the DMC---CIP? • If public, is the project specifically listed in the DMC---CIP? Or is the project necessary to facilitate a DMC related strategy? N/A • If private, is the project otherwise compatible with the planned public improvements in the DMC---CIP? Yes, improvements required by the Proposed Project are included in the current DMC---CIP. SECTION 3.5 TARGETED BUSINESS ENTERPRISE STRATEGIES [Form may vary based on size/scope of project] Does the project include a plan for achieving Local Business, S/M/WBE Project Requirements and other project requirements, as applicable? The Applicant states that the project plan goal is to meet the intent of the S/M/WBE project requirements along with the other requirements of the DMC Act. Has the applicant agreed to execute the DMC Development Agreement? (the terms of which are provided in form to all applicants)? Yes – the Applicant has agreed to execute the DMC Development Agreement. SECTION 3.6 COMPLIANCE WITH ECONOMIC---FISCAL GOALS AND OBJECTIVES Does the project include a plan to comply with or support the economic---fiscal goals and objectives of the DMC initiative? Does the project generate substantial economic-fiscal gain based upon job projections? Based upon job projections, the project has the potential to create approximately 450 construction related jobs for all trades of the construction and development process. Once operational, it is anticipated that there will be more than 400 full and part time employees occupying the building. 91 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 11 Does the project generate substantial economic---fiscal gain based upon tax base projections? Currently the tax base for property is $0 as it is tax exempt. The total tax capacity once the project is constructed and occupied is $422,098 a net increase of $422,008. Does the project maximize the opportunity for investment by attracting other private capital? This project will attract significant private investment. It is in the downtown core, adjacent to Mayo Clinic campus. Mayo has committed to being an anchor tenant. The remaining 2/3rds of the building will be occupied by tenants who will have the opportunity of working in close proximity to Mayo researchers. Is the project required (e.g. public works) to continue to seed investment in the DMC District? The increase in annual property tax revenue will be a substantial amount for the City of Rochester to invest in future public and private developments. Does the project support the economic strategies of the project by providing civic/cultural uses and/or public amenities that support strategic growth in the DMC Development District and/or specific business development and economic development strategies that are adopted as part of the DMC Development Plan? The Phase 1 building is envisioned to become an important hub within the larger Discovery Square district. A dynamic landscape element is conceived as a central element for unifying the various phases of Discovery Square. This landscape is intended to support a variety of functions including the assembly and gathering, wellness and exercise activities, as well as provide accessible connections to nature. Ultimately, Phase 1 is destined to become a central gathering space for researchers, educators, clinicians, students, entrepreneurs, small to large companies, and community members. Phase 1 will be the cornerstone of Discovery Square; likely be the most recognizable building within the District. Its main entry at the intersection of 2nd Avenue SW and 4th Street SW will serve as Discovery Square’s front door. As such, it is imperative that the front door provide an experience commensurate with entering into what will be one of the world’s foremost centers for medical and research excellence. SECTION 3.7 OTHER PROJECT POLICY CONSIDERATIONS Is the project inside the DMC Development District? Yes, the Proposed Project is inside of the DMC Development District. If the project is not inside the DMC Development District, are they asking for a boundary change? NA If so, are the recommended changes: o Limited to the area required to support the project request? N/A o Consistent with the core strategies and planning documents? N/A o Essential to the strategies and/or catalytic to growth under the DMC Development Plan? N/A Does the project include any distinctive social and/or community benefits that are not specifically required by the DMC 92 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY 12 Act? Based on the Applicant’s submittal, Discovery Square Phase 1 will encourage health and wellness with a multi-dimensional and holistic approach. Discovery Square Phase 1 enhances opportunities for biking and walking. By situating the building entry at the corner of 2nd Avenue and 4th Street, occupants are encouraged to move throughout the district utilizing Discovery Walk. Within the building itself, amenities are conveniently woven together in a network of interconnecting building volumes creating a natural draw to utilize the stairs instead of the elevators. Additionally, the building plans to provide indoor bike storage and to encourage biking to work. Incorporation of open space on all levels facilitates this healing activity and provides connections to nature. The second and first levels are designed with partially covered terraces adjacent to planting areas at the east and west ends of the building. These areas will become areas of refuge for tenants and community members alike. Discovery Square Phase 1 is envisioned to be the hub for the District’s live, work, and play atmosphere. The safety of pedestrian movement has been thoughtfully considered. Around the site, many of existing curb cuts will be removed protecting sidewalks from vehicular traffic and contributing to a vibrant streetscape. With additional buildings envisioned in the future, strategies to connect the skyway and tunnel systems are planned allowing users to enjoy the benefits of weather protection and maintaining linkages. 93 This Page is Intentionally Left Blank 94 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY Destination Medical Center Project Update Project: Urban on First Date: July 20, 2017 I. Project Financing See enclosed letter. II. Property Acquisition Property acquisition complete. III. Permitting/Entitlements All permitting and entitlement requirements met. IV. Design Schematic design complete. V. Construction Progress Groundbreaking expected to occur in late 2017. VI. Occupancy Status N/A. 95 Opus Development Company, L.L.C. | 10350 Bren Road West, Minnetonka, MN 55343 | 952.656.4444 | www.opus-group.com July 7, 2017 DMCC Executive Committee Attn: Lt Gov. Tina Smith Rosa Parks Pavilion 195 S Broadway Rochester, MN 55904 RE: Evidence of Financing for Opus/Titan Rochester Mixed Use Project Ladies and Gentleman: The Opus/Titan partnership has been working diligently toward a ground breaking of our mixed use project in the Discovery Square district of the DMC. This includes significant progress on finalizing the capital structure for the project. This letter is in response to your request for information on these efforts. As originally discussed with the DMC team, we anticipated it would take 180 days from final City and DMC approvals to obtain debt and equity financing so we could break ground on the project. We diligently pursued all approvals and received final City approvals on March 20th, 2017. After receiving all approvals the Opus/Titan team promptly engaged the CBRE capital markets team to assist in obtaining capital financing for the project. As a result of these efforts three institutional investors of significant size having expressed strong interest in the project and a term sheet has been delivered and is under review. Negotiations with these potential equity investors continue and are on track to accommodate a ground breaking this fall. A construction lender who has worked extensively with both Opus and Titan has been identified and is prepared to move forward this fall. This regional bank has financed multiple ground up development projects for the team around the Midwest. They have visited the site multiple times and received preliminary internal approval to move forward. Final approval will be provided when the institutional equity partner is selected. Finally, the Opus/Titan team would like to reaffirm to you our commitment to the project. We are excited to bring an entirely new level of quality urban living to the market. The team continues to spend significant time and pursuit funds to move this project forward. We will provide additional updates to this group as we have them. If you have questions please do not hesitate to reach out to me. Best regards, Matthew G. Rauenhorst Vice President, Opus Development Company, L.L.C. 96 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY Destination Medical Center Project Update Project: Titan Hilton Hotel Date: July 20, 2017 I. Project Financing Project financing secured. II. Property Acquisition Property acquisition complete. III. Permitting/Entitlements All permitting and entitlement requirements met. IV. Design Construction underway. V. Construction Progress The Titan Hilton hotel broke ground in February 2017. The 19-story structure will include retail and dining amenities and be anchored by a Hilton hotel. By June 2017 the project accomplished 100% of soil remediation, 100% of footings and foundations, and pour-out of the first and second levels of the structure, with the concrete deck on third floor being poured out as of mid-July. The third-floor pour includes the first of the 30-foot-tall columns that are on third and fourth floor for the ball rooms. The post-tension concrete pour will reach level nine by the end of next quarter. On concrete pour days, there are more than fifty workers on site. At the height of the project there will be more than 300 workers on site. On July 7, 2017, DMC EDA staff joined Titan Development and Investment, Harbor Bay Real Estate Advisors, Kraus-Anderson, City of Rochester staff, and project investors on a tour of the site. VI. Occupancy Status Project currently under construction. 97 DESTINATION MEDICAL CENTER ECONOMIC DEVELOPMENT AGENCY Destination Medical Center Project Update Project: Alatus Rochester Development Date: July 20, 2017 Project Financing Project financing expected to be secured by mid-September 2017. Property Acquisition Property acquisition partially completed. Alatus closed on the purchase of five single family homes in May 2017. Acquisition of the Ray-Mar and Brentwood hotels, as well as one single family home remaining to be acquired, expected to be completed by August 4, 2017. Permitting/Entitlements All permitting and entitlement requirements met. Design Schematic design complete. Design Development 50% completed. Construction Progress Demolition permits have been secured for all properties encompassed in the development. In July and August 2017 asbestos abatement will occur in the existing lot structures, followed by demolition. Excavation is scheduled to begin in October 2017. Construction is expected to be completed in late 2019. Occupancy Status Leasing agent retained. 98 Heart of the City To: DMC Corporation Board of Directors From: DMC EDA Staff Date: July 20, 2017 Overview: The RSP Architects-led design team for the Heart of the City has been working very closely with community stakeholders, adjacent property owners, community advisory committee, and others in the redesign of Peace Plaza and other public space of Heart of the City. Program and design concepts have been presented, much of which has been favorably received. The second Heart of the City Community Workshop took place on June 27, 2017 at the Chateau Theatre. This event was hosted by DMC, the City of Rochester, and the Heart of the City Design Team to review and collect feedback on the schematic design from the community. The same design concepts shared with the community were brought to the Committee of the Whole on July 10, 2017 and the DMC EDA board of directors on July 13, 2017. Next Steps: Final schematic design, including phasing, governance, operations, and costs, will be presented to the DMC Corporation board of directors for consideration. No action is requested at this time. 99 HEART OF THE CITY DESIGN PRESENTATION HEART OF THE CITY DESIGN TEAM RSP + Coen+Partners + 9.Square + HR&A Advisors + Kimley-Horn 100 MAKE IT ROCHESTER MAKE IT A DESTINATION MAKE IT BIG + KEEP IT SMALL REVEAL THE UNSEEN MAKE IT ABOUT LIFE EMBRACE THE NORTH MAKE IT ABOUT ART MAKE IT ABOUT HEALING MAKE IT INVITING MAKE IT BRIGHT MAKE IT CONNECTED MAKE IT GREEN AUTHENTIC + CONTEXTUAL DIVERSITY OF EVENTS + ACTIVITIES THROUGHOUT DAY PROVIDE YEAR-ROUND ATTRACTIONS + EVENTS INTEGRATED + EXPERIENTIAL LIGHTING HOME GROWN + WORLD RENOWNED INNOVATIVE + TRANSFORMATIVE + INTERACTIVE ADA ACCESSIBILITY + SKYWAY, STREET + SUBWAY BLEND BIG CITY + SMALL CITY, OLD + NEW MOMENTS OF REPOSE IN AN URBAN SETTING URBAN + NATURAL REVEAL THE MAGIC OF MAYO + SHARE STORIES FLEXIBLE + DIVERSE PLACES TO GATHER DESIGN PRINCIPLES HEART OF THE CITY DESIGN TEAM RSP + Coen+Partners + 9.Square + HR&A Advisors + Kimley-Horn 101 HEART OF THE CITY INITIATIVES GONDA BLDG KAHLER HOTEL MARRIOTT HOTEL WELLS FARGO CHATEAU THEATER SHOPS @ UNIVERSITY SQUARE BR O A D W A Y A V E N U E 3RD A V E CEN T E R S T 2ND S T #1 2ND AVENUE PLAZA #2 1ST AVE + THE ALLEY #3 MARKET PLAZA #4 THEATER SQUARE #5 ART #1 2ND AVENUE #3 MARKET PLAZA #5 ART #5 ART#4 THEATER SQUARE #2 1ST AVENUE + THE ALLEYHEART OF THE CITY DESIGN TEAM RSP + Coen+Partners + 9.Square + HR&A Advisors + Kimley-Horn 102 EARTH/SKY/WATER WITH FLEXIBLE OPEN PLAZA HEART OF THE CITY DESIGN TEAM RSP + Coen+Partners + 9.Square + HR&A Advisors + Kimley-Horn 103 1ST AVENUE PLAZA HEART OF THE CITY DESIGN TEAM RSP + Coen+Partners + 9.Square + HR&A Advisors + Kimley-Horn 104 THE ACTIVE ALLEY HEART OF THE CITY DESIGN TEAM RSP + Coen+Partners + 9.Square + HR&A Advisors + Kimley-Horn 105 THE MARKET PLAZA WITH POP-UP CAFES + GARDENS HEART OF THE CITY DESIGN TEAM RSP + Coen+Partners + 9.Square + HR&A Advisors + Kimley-Horn 106 THEATER SQUARE SUMMER FOUNTAIN HEART OF THE CITY DESIGN TEAM RSP + Coen+Partners + 9.Square + HR&A Advisors + Kimley-Horn 107 ICONIC ART The Artery | Prepared for Heart of the City by Eric Anderson | Mar 9, 2017 THE ARTERY - ERIC ANDERSON LOZANO-HEMMER JANET ELCHEMAN 108 SKY SPACE 109 MAKE IT ROCHESTER 110 Chateau Theatre To: DMC Corporation Board of Directors From: DMC EDA Staff Date: July 20, 2017 Overview: Following DMCC support in 2015, the City of Rochester closed on the acquisition of the Chateau Theatre in January 2016. The purchase price was approximately $6 million. Subsequently, the Chateau Theatre Re-Use Task Force was formed, chaired by Mayor Brede. Its role was to review and recommend strategies. A consultant, Miller Dunwiddie, was hired to study the feasibility of redeveloping the venue as a multi-purpose performing arts center. Miller Dunwiddie is an architectural design firm with extensive experience in historic renovation; it added a market analysis firm to their team, Webb Management, for the project. Webb’s role was to review market demand and propose a business, governance, and operating model. In October 2016, the Task Force received a report from the consultant that concluded there is a demand for a multi-purpose performing arts center and that a $25 million capital investment would be required in order to make the facility functional. Furthermore, the consultant presented a business, governance, and operating model whereby the City would own and operate the facility, generate earned and contributed income, with the support of a non-profit support organization. The report was submitted to City Council. It recommended that there needed to be additional exploration of the fit between this project and adjacent development and further study of the business plan. There have been subsequent discussions with adjacent property owners to discuss the potential fit between the Chateau Theatre redevelopment and their own development plans. Discussions have focused on program considerations, site considerations, and construction timing. Next Steps: Development decisions, including funding, governance, and interim use strategies, will be made deliberatively and allow the redevelopment of the Chateau Theatre to fully capitalize on potential complementary projects on nearby sites, including the Wells Fargo building and the former Michael’s restaurant site. 111 Saint Marys Place To: DMC Corporation Board of Directors From: DMC EDA Staff Date: July 20, 2017 Background: The public design process initiated for the Saint Marys Place sub-district public realm continues to move forward. Following data collection, three concepts were developed for community feedback. Feedback data was collected using on-line surveys (650 responses); intercept surveys (150); open houses (150+ attendees); prototype demonstration project (75 participants); and an independent survey by Post Bulletin regarding subway connection (11,000 responses). Eight key features emerged which will be represented in the final design concept: 1. A single North South subway with dramatic public access courtyards; 2. Weather protection arcade system at street level; 3. Frequent pedestrian crossings at street level; 4. Wide sidewalks and four traffic (or transit) lanes; 5. North south greenway to Kutzky Park and Historic Southwest Neighborhood; 6. Strengthen 1st Street bicycle corridor; 7. Prominent transit nodes at key locations; 8. Create gateway features and neighborhood identity. Other ideas such as mid-block connections, restoring the alley system, activating the front lawn of Saint Marys Place, turning 12th Avenue into a pedestrian plaza, and a more extensive subway system were also proposed. Next Steps: Final design concept, phasing plan, and associated costs to be presented to the key stakeholder group, the Rochester City Council, and the DMC Corporation board of directors in the third and fourth quarters of 2017. 112 Marketing Metrics To: DMC Corporation Board of Directors From: DMC EDA Staff Date: July 20, 2017 DMC Marketing Plan Objectives ● Build awareness, gain national attention ● Demonstrate continued momentum ● Drive traffic to DMC.mn ● Build interest in life sciences and real estate developers/investor audiences Metric Highlights: Q1/Q2 2017 Meaningful metrics evaluating marketing and advertising tactics to gain national attention are best reflected in DMC.mn’s traffic and engagement, and social media use. These metrics demonstrate DMC’s reach continues to grow steadily in volume and in national audiences. Metric: Overall Traffic to DMC.mn June was the strongest month yet for traffic. A 73% increase over May. Marketing and advertising executions contributing to traffic increase in Q2: ● “In the Middle of Everywhere” Storyteller videos ○ We released series of videos highlighting the “In the Middle of Everywhere” marketing campaign featuring a community member who is transforming Rochester in each of the nine areas of focus for DMC. Initial metrics from DMC.mn and various communication channels indicate strong performance. We will share specific metrics in Q3’s report. 113 ● DMC.mn Blogs ○ We published eight blogs on the website. Of these, CCF agency reposted three blogs to Facebook, resulting in greater reach. This communication strategy is a key factor in traffic increase and social media engagement. ○ Six of the eight blogs were also included in the two June e-newsletters, which are delivered to approximately 2,800 email addresses. ● Conference Participation/Release of discoverysquare.com ○ Several members of DMC team attended Bio International in San Diego, June X-X. ○ Coinciding with conference participation was release of dmc.mn/discoverysquare.com June 18 (https://dmc.mn/discovery-square/). Since launch, page was visited 386 times with users clicking 191 times, a good indicator of interest and engagement. ● Delta SKY magazine o April: Discovery Square o June: Heart of the City ● Regional Sponsorships o Eureka Awards! ▪ Members of DMC team attended this award program, hosted by Minneapolis/St. Paul Business Journals to recognize innovation and progress in industry. DMC sponsored an ad in the journal’s e-newsletter each day during week in May when honorees were announced. Call to action is to visit DMC.mn. o Table of Experts ▪ DMC submitted questions to this panel discussion on June 28, which is focused on issues related to commercial real estate. Questions were designed to stimulate interest in DMC’s commercial real estate development. 114 Metric: Geographic Reach Traffic from outside Rochester continues to gain ground each month. For the first time ever, Rochester did not hold the number one spot for most visits. This spot was held by San Diego (4,612 Visits) This is extremely strong traffic from a conference event and represented 22% of all cities traffic. 115 Social Media Engagement Metrics: Traffic, Engagement Steep Growth has occurred in Facebook Likes since in last 60 days. May to June was the largest growth yet with a net gain of 200 Likes. The paid reposting by CCF agency of our blogs reached more than 62,000 people in the last 30 days and triggered 9,551 posts engagement. Relationship Management ● 53 meetings requested by private investors/developers in Q2 2017, including new developers and equity investors ● Five visiting groups included foreign investment and development entities ● 54 presentations, engagements and events with life science, community and real estate audiences Next Steps: ● Prioritize enhancements to Investor/Developer section of DMC.mn to stimulate interest and introduce lead generation form. ● Continue to regularly feature audience-specific blogs. Enhance traffic by boosting targeted DMC website blogs on social networks twice monthly. ● Continue to explore and incorporate keywords into blogs to increase search engine optimization (SEO). 116 Energy Integration Group Update To: DMC Corporation Board of Directors From: DMC EDA Staff Date: July 20, 2017 Background: The DMC Development Plan includes several DMC District energy- and sustainability focus areas, including: 1. Human Health and Wellness 2. Community Health 3. Economic Health 4. Energy 5. Water 6. Materials and Waste 7. Transportation and Mobility 8. Climate Additionally, each development project will be evaluated against DMC energy and sustainability goals, including: 1. Energy reduction (20% below ASHRAE 90.1-2010) 2. Architecture 2030 standards 3. Building performance: a. Potable water reduction b. Materials and Waste reduction c. GHG Emissions reduction d. DMC District Design Guidelines conformance Next Steps: Develop additional sustainability targets to better link the district goals to individual projects, including water consumption, energy efficiency, energy targeting and measurement processes and material waste diversion targets. 117 Destination Medical Center Economic Development Agency / City of Rochester Energy and Sustainability Update 118 DMC District Sustainability Focus Areas 1.Human Health and Wellness –Ex. Wellness program participation, collect sickness absences 2.Community Health –ex. encourage active transportation, recreation, social interaction, links between clinic and community 3.Economic Health –ex. Create 28,000 jobs by 2034, support avg of 1,800 construction jobs, attract MBE/WBE participation 4.Energy –ex. Reduce energy consumption and EUI by 25% below 2010 levels by 2030 119 DMC District Sustainability Focus Areas 1.Water –ex. Reduce potable water consumption below 2012 levels by 2030, increase recycled sources for irrigation 2.Materials and Waste –ex. Reduce total waste generated by 30% below 2012 levels by 2030 3.Transportation and Mobility –ex. Reduce drive along mode share to 50% by 2035, reduce GHG- emissions by 50% below 2008 levels by 2030 4.Climate –ex. Reduce DMC-wide emissions per square foot by 80% below 2005 levels by 2050 120 DMC Project Sustainability Goals 1.Energy –Design to 20% below ASHRAE 90.1-2010 2.Report on Architecture 2030 standards 3.Report on building performance as it relates to district-wide sustainability goals: 1.Water performance 2.Materials and Waste reduction 3.GHG Emissions reduction 4.DMC District Design Guidelines 121 DMC Project Sustainability Goals – Next Steps 1.Develop additional sustainability targets in order to better link the district goals to individual projects, including: 1.Water consumption –interior and exterior water reductions 2.Energy Efficiency –requiring participation in a performance based procurement program 1.Require an energy targeting process from the project’s inception (targets are taken from actual building performance data) 2.Tie design and construction team’s contract to meet energy targets through measurement and verification 3.Motivates owner, design team, and contractor to realize energy reductions of space 4.Ensure energy target meets Architecture 2030 standards 3.Material waste diversion –require minimum waste performance diversion rate 4.Require energy benchmarking for project through 2030 122 Primary Guiding Documents 1.Guiding Documents 1.Destination Medical Center Plan 2.Center for Energy and Environment Report 3.Destination Medical Center District Design Guidelines 2.Influencing Documents (many) 1.City of Rochester -Energy Action Plan 2.City of Rochester -Environmental Defense Fund Reports 3.Master Planning Documents –Mayo, UMR, RPU, among others 4.Olmsted County –Comprehensive Plan 123 Project Example –Mortenson 1.Ensured 20% energy code target met for project through modeling 2.Collaborated to ensure sustainability strategies incorporated into the building: 1.Water Efficiency –interior and exterior 2.Alternative transportation 3.Targeted available funding to assist with project costs 124 City of Rochester Projects •Benchmarking •“You can’t manage what you don’t measure” •Use City’s B3 database to include all City properties or those that the City pays utility bills •Currently, working with properties to reflect new or updated SF’s, energy sources •GreenSteps Cities –update existing and new collect new baseline data •Beyond energy to transportation, waste, recycling, green cleaning, etc. •SolSmart Certification for City 125 City of Rochester Projects •New Construction •Assist with incorporating sustainability strategies for City’s new construction •Parking Garage •Police Station •Residence Tower above parking garage (RFP) •Airport Master Plan (very early discussions) •Evaluating the use of an energy-focused performance based procurement program for police station and residence tower RFP •Method to incorporate energy targets from public building data into design contracts to drive performance from the project start •Also, tailored to ensure building performs to design standards •A practice to ‘get what you paid for’ •Pursued free consulting through a nationally funded energy grant for participation 126 City of Rochester Projects •Existing Buildings •Compiling an analyzed list of low cost energy conservation projects at MN BioBusiness Center and Arts Center •Assisting with review of project scope at Mayo Civic Center •Evaluating City Hall for energy projects •Touring city facilities to meet operations folks, discuss needs and issues, recent projects, and ways to help •Good opportunities identified thus far, provide economically sound method to reduce operating expenses with above market returns •Street Lights –Color Temperature evaluation, dimming capability •Best Practice Sharing •Tours have highlighted a need to share best practices across facilities personnel •In some cases, people evaluating or struggling with the same issue •Monthly meeting to compare notes, share lessons learned, talk about future planning efforts would help a great deal 127 This Page is Intentionally Left Blank 128 TO: Jim Bier, Treasurer Kathleen Lamb, Attorney FR: Dale Martinson, Assistant Treasurer Date: July 19, 2017 RE: June 2017 Financial Budget Summary The attached summary for June reflects expenditures to date totaling $1,061,235 out of the 2017 total budget of $3,224,870. The total remaining 2017 budget represents 67% of the original budget remaining with 6 months (50%) of the year remaining. In the DMCC direct costs section, the $13,507 of expenditures in June primarily represents building rents for board meeting space and audit / accounting fees for the annual audkt. The DMC EDA costs are billed through Master Application for Payments (MAPs) for outside contractors and as well as through working capital loan advances for the EDA payroll and other operational expenses. DMC EDA costs through June of 2017 totaled $963,151 and results in a remaining EDA budget of 63%. Details of the contract payments including remaining contract commitments can be found on the 3rd through 4th page of the summary as provided by the DMC EDA. An additional MAP request was submitted in July for June expenses in the amount of $126,846.42. These costs are not reflected in the totals of the June report. The 2nd page of this summary now reflects DMCC approved Capital Improvement Project (CIP) costs that are being managed by the City of Rochester staff. Total 2017 capital expenditures amounted to just short of $3 million. These projects primarily include transit studies underway, architectural services on the Heart of the City project and a sanitary sewer upsizing project currently under construction. Please feel free to contact me with any questions or concerns. 129 Destination Medical Center Corporation Financial Budget Summary June 2017 2017 Approved Curent Month June 2017 Amount Percent Approved Budget June 2017 Year To Date Remaining Remaining General Administrative Expenses 31,200 9,713 24,574 6,626 21% Professional Services 404,500 3,795 60,511 343,989 85% Insurance and Bonds 20,000 12,998 7,002 35% City Support Expenses 150,000 ‐ ‐ 150,000 100% Subtotal DMCC 605,700 13,507 98,084 507,616 84% Third Party Costs ‐ DMC EDA * Payroll, Staff, Administration & Benefits‐EDA 645,120 54,484 238,854 406,266 63% Operating Expenses 14,187 102,391 (102,391) ‐116% Operational Costs ‐ Contracted 88,000 2,031 19,020 68,980 9% Economic Development Outreach & Support 751,000 13,700 81,317 669,683 89% Professional Services 890,740 136,768 524,369 366,371 41% Miscellaneous Expenses 244,310 (2,800) 247,110 101% Subtotal EDA 2,619,170 221,170 963,151 1,656,019 63% Total DMCC 2016 3,224,870 234,678 1,061,235 2,163,635 67% * Note: An additional EDA MAP request for March Expenses totalling $126,846.42 outstanding DMCC Working Capital Note 1,000 as of 6/30/2017 was paid in July.EDA Working Capital Note 50,000 130 DMCC Projects Managed by the City of Rochester As of June 30, 2017 YTD Expenditures Project Budget Life To Date Expenditures DMC Projects (BU# 8600) 8611C- - Sn/S12AvSW/NW<2StSW>2StNW 2,850,000.00 8,190.37 8612C- - WZmbrRvrSn/SRlfLin<CookPk>CCDr 1,490.99 950,000.00 21,504.99 8613C- - ChateauTheatrePre-OccupancyM&O 38,309.85 686,800.00 157,784.47 8614C- - DMCTransit&InfrastrctrPgrmMgmt 198,819.15 1,100,000.00 821,912.33 8617C- - Broadway @ Center Parking Ramp 10,500,000.00 8618C- - SharedParkngStudy&PrgmDevlpmnt 456,878.12 1,811,854.00 908,711.95 8620C- - City Loop Plan 347,718.27 959,938.00 513,294.25 8621C- - Transit Circulator Study 377,654.32 1,991,532.00 736,105.32 8623C- - DMCC Street Use Study 684,515.10 2,867,708.00 1,244,183.55 8624C- - ChateauTheatreBldgImprov/Purch 37,662.52 6,667,261.34 8625C- - Heart of the City 366,491.05 598,940.00 537,996.22 8626C- - Sn/SUpsize1Av&3AvSE<4StS>1StN 476,056.95 2,500,000.00 516,376.63 Total DMC Projects (BU# 8600) Grand Total 2,985,596.32 26,816,772.00 12,133,321.42 131 132 133 134