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Home My WebLink About2/6/2020 DMCC Board of Directors Meeting - Agenda and Meeting Packet Destination Medical Center Corporation Board of Directors Meeting Thursday, February 6, 2020 9:30 A.M. Mayo Civic Center Rochester, Minnesota 1 DESTINATION MEDICAL CENTER CORPORATION (DMCC) BOARD MEETING Thursday, February 6, 2020 9:30 A.M. AGENDA PAGE I. Call to Order II. Roll Call III. Approval of Agenda 1 IV. Approval of Minutes: November 12, 2019 3 V. Public Comment Period VI. Chair’s Report VII. Consent Agenda A. Resolution A: Authorizing an Extension to Agreement with CliftonLarsonAllen 7 B. EDA: Request for Budget Encumbrance for 2020 8 VIII. Annual Report to the Legislature Resolution B: Approving February 15 Report to the Legislature 9 IX. DMC Metrics 49 X. Project Updates (City of Rochester, EDA) A. Heart of the City 61 B. Transportation 62 XI. Discovery Square Two 65 XII. Development Plan Five Year Update 67 XIII. EDA Update 69 XIV. DMCC 2020 Budget: Year-to-Date Update 79 2 XV. Meeting Schedule A. Next Regular Meeting: May 28, 2020 at 9:30 A.M. B. Next Executive Committee Meeting: March 26, 2020 at 9:30 A. M. XVI. Adjournment Please Note: Immediately following the meeting, a joint meeting is planned with the DMCC, the Rochester City Council, the Olmsted County Board of Commissioners and the Destination Medical Center Economic Development Agency (“EDA”) Board of Directors. The meeting will be convened at 12:00 pm in Suites 102-103 of the Mayo Civic Center. A quorum of the DMCC Board may be present. Members of the public are welcome and encouraged to attend the joint meeting. 1186947-3.DOCX DESTINATION MEDICAL CENTER CORPORATION (DMCC) BOARD MEETING Tuesday, November 12, 2019 9:30 A.M. MINUTES I. Call to Order. Chair R.T. Rybak called the meeting to order at 9:30 a.m. at Mayo Civic Center Suite 101, located at 30 Civic Center Drive, Rochester, MN 55904. II. Roll Call. Chair R.T. Rybak, Mayor Kim Norton, Michael Dougherty, Paul Williams, Jim Campbell, Commissioner Jim Bier and Council Member Nick Campion were present. III. Approval of Agenda. Commissioner Bier moved approval of the Agenda. Council Member Campion seconded. Ayes (7), Nays (0). Motion approved. IV.Approval of Minutes: October 18, 2019. Commissioner Bier moved approval of the Minutes. Council Member Campion seconded. Ayes (7), Nays (0). Motion approved. V.Public Comment Period. Carrie Noble O’Keefe from Exhibits Development Group thanked the DMCC and City of Rochester for investing in the Chateau Theatre. The public re-opening of the theatre will be held on November 23, 2019 and will feature exhibits and other ongoing programming. VI.Chair’s Report. Chair Rybak highlighted several 2019 milestones, including: certifying more than a quarter-billion dollars in private investment, the completion of the downtown Hilton hotel; approval of construction for the first phase of the Heart of the City public realm; advancement of the Discovery Walk design, and many transportation activities. Chair Rybak also outlined 2020 priorities, including transportation and affordable housing, and asked the Board for input. Council Member Campion suggested that communication between DMC stakeholders will become more important. Lisa Clarke, EDA Executive Director, stated that a joint meeting was being planned of the DMCC and EDA boards, Rochester City Council, and Olmsted County Board of Commissioners. Mayor Norton discussed the City’s participation in the Bloomberg-Harvard Leadership Collaborative. Chair Rybak suggested that communication could be a topic of discussion at a future board meeting. VII.DMC Metrics. Aaron Parrish, City of Rochester Deputy Administrator, described the targeted workforce and business requirements of the DMC statute. Chair Rybak stated that State goals for southeast Minnesota and the City’s goals for DMC could be aligned. Mr. Parrish reported that the City has hired a DMC-funded project manager to coordinate this work, which has allowed the targeted workforce and business strategy to add development, communication, and outreach tactics. Board members noted the need to balance between benefiting local and targeted businesses and workers, understanding where non-Rochester workers come from, and accounting for the 3 effect of low unemployment on local businesses. Council Member Campion suggested data breakdowns by geography and general- and sub-contractors. Mr. Parrish noted the establishment of a local chapter of the National Association of Minority Contractors and outlined 2020 priorities. Council Member Campion suggested that staff consider evaluating how the community can mitigate risks presented to minority business owners and entrepreneurs. Mr. Parrish also described the regional targeted business and workforce standards established by the Minnesota Department of Human Rights and noted that DMC projects must strive to achieve the goals approved by the Rochester City Council. Mr. Williams requested that staff provide a more detailed update and recommendations at the next meeting. VIII.Mayo Clinic 2030 Plan. Adam Brase, division chair for Strategic Intelligence in Mayo Clinic’s Department of Planning Services, described Mayo Clinic’s “Bold Forward” 2030 business strategy. Mayo Clinic’s strategy anticipates that the healthcare industry will be significantly affected by a number of factors, including employment and patient needs. Chair Rybak suggested that Mayo Clinic could indicate how this strategy could be supported by the DMCC. Mayor Norton noted that Mayo Clinic’s strategy could affect other regional assets, such as Rochester International Airport, and Council Member Campion stated that Mayo Clinic’s success is central to Rochester’s success. Ms. Clarke indicated that the Mayo Clinic strategy will inform the five-year DMC development plan update. IX.Project Updates (City of Rochester, DMC EDA). A. Heart of the City. Patrick Seeb, EDA Director of Economic Development and Placemaking, provided the Heart of the City update. Mr. Seeb stated that construction bidding documents will be issued in spring 2020 and described DMC’s “Business Forward” strategy. Business Forward will prioritize accessibility, safety, communication, activation and programming before, during and after construction in order to minimize disruptions to the businesses adjacent to the redeveloped public spaces. B.Discovery Square. Chris Schad, EDA Director of Business Development, stated that Rion, a local start-up, and BioSig, a NASDAQ-listed bio-tech firm, will occupy space in Discovery Square and noted Vyriad’s partnership with Regeneron. Mr. Schad also reported that the Collider Foundation, a local non-profit organization formed to encourage entrepreneurship, recently received a $250,000 grant from the Kauffman Foundation. Mr. Schad described ongoing Discovery Square subdistrict development and planning efforts, including discussions related to Discovery Square Two, parking, Discovery Walk, district energy, and a climate-controlled pedestrian experience. C.Transportation. Mr. Seeb presented a recommendation from City and EDA staff to amend the FTA grant entry letter project list. Adding the recommended projects, which include parking at the southeast mobility hub and the Saint Marys Place transit station, also requires adding the project engineering costs to the 2021 capital improvement program. Committing $2.5 million toward these engineering costs could garner up to $50 million in federal transportation funds. Mr. Parrish added that the recommendation should have no impact on bid scoring and will provide a more efficient delivery of infrastructure improvements. Chair Rybak suggested that interim transit solutions could be adopted while the transit circulator is developed and constructed. Mayor Norton asked if DMC transit plans need 4 to be incorporated into the Rochester-Olmsted Council of Governments Long-Range Transportation Plan. Mr. Parrish stated that the DMC plans could be added to the current plan or the planned update. Resolution A: Amending Prior Approval of Downtown Circulator Locally Preferred Alternative and Revising Project Development Funding for the Entry Letter into the FTA Small Starts Program. Commissioner Bier moved to amend the resolution to include demolition and site development costs for the southeast mobility hub as additional project features eligible for FTA reimbursement. Mr. Dougherty seconded the amendment. Ayes (7), Nays (0). Amendment approved. Council Member Campion asked if the resolution initiates the process to amend the DMC development district. General Counsel Lamb replied that the resolution does not initiate the process but allows the DMCC Executive Board to do so if needed. Commissioner Bier moved approval of the amended resolution. Council Member Campion seconded. Ayes (6), Nays (1, Norton). Motion approved. D.Affordable Housing. Mr. Seeb reported on the ongoing development of a community housing strategy and efforts to include housing in the mobility hubs. Mr. Seeb also reported that CommonBond, a St. Paul-based affordable housing development firm, intends to submit a DMC funding application to develop affordable housing atop parking ramp six. Mr. Williams reported that he had asked staff to evaluate whether DMC funding could be committed to the Coalition for Rochester Area Housing. General Council Lamb responded that funds may be committed to infrastructure costs associated with approved projects but that it is likely not appropriate to commit DMC funding to a fund that lacks similar specificity. X.Development Plan Five Year Update. Mr. Seeb outlined the DMC development plan statutory requirements and described the significant plans DMC, the City, the County, and other partners have completed since the 2015 adoption of the development plan. Mr. Seeb said that the update will be an effort to keep the plan understandable, to demonstrate progress, and to focus on a 2020-2025 implementation strategy. Resolution B: Providing Final Approval for the Expenditure of Funds from the 2020 CIP Budget for the Five Year Update to the Development Plan. Commissioner Bier moved approval of Resolution B. Mr. Dougherty seconded. Ayes (7), Nays (0). Motion approved. XI.EDA Update. Ms. Clarke described several proposed development efforts, including the City’s Riverfront Reimagined request for statements of interest and joint University of Minnesota Rochester (UMR)-YMCA request for proposals. XII. DMCC 2019 Budget: Year-to-Date Update. Commissioner Bier provided a budget update. XIII. Meeting Schedule. A. Next Regular Meeting: February 6, 2020 at 9:30 A.M. 5 XIV.Adjournment. Mr. Williams moved to adjourn the meeting. Commissioner Bier seconded. Ayes (6), Nays (0). Motion approved. 1186820-3.DOCX 6 A. DESTINATION MEDICAL CENTER CORPORATION RESOLUTION NO. ________ - 2020 Authorizing an Extension to the Agreement Between Destination Medical Center Corporation and CliftonLarsonAllen, LLP, Subject to Successful Negotiation of Terms BACKGROUND RECITALS A. The Destination Medical Center Corporation (“DMCC”), together with the Destination Medical Center Economic Development Agency (“EDA”), issued a Request for Proposals for professional auditing services in 2015. The firm of CliftonLarsonAllen LLP (“CLA”) was selected. The DMCC and CLA entered into the CliftonLarsonAllen LLP Professional Services Agreement, dated May 11, 2015 and an additional two-year extension, dated February 23, 2018 (together, the “CLA Agreement”). The EDA entered into a similar engagement with CLA. B. On behalf of the DMCC, the Assistant Treasurer of the DMCC recommends that the CLA Agreement be extended for an additional year, provided that satisfactory terms can be agreed upon. RESOLUTION NOW, THEREFORE, BE IT RESOLVED, by the Destination Medical Center Corporation, that the Assistant Treasurer and legal counsel are authorized to negotiate terms for a one-year extension of the CLA Agreement, subject to approval by the Chair or Treasurer of the DMCC. 1186866.DOCX 7 MEMO To: Jim Bier, DMC Corporation Treasurer From: Dale Martinson, DMC Corporation Assistant Treasurer Date: 1/24/2020 RE: Request for 2019 Budget Encumbrance The DMC EDA, from time to time, uses consultants to complete the work designated in the DMC development plan. This work varies in scope and complexity and, due to its detailed nature, occasionally requires several months to complete. In November 2019, the DMC EDA contracted with AECOM Technical Services, Inc. to evaluate direct, indirect, and induced investment, development, and employment impacts of the DMC initiative from 2014-present. The scope of work is intended to be complete in early 2020 at a total cost of $42,000. In December 2020, AECOM billed the DMC EDA $25,200 for the completed portion of the scope of work. The balance of the contract amount, $16,800, is expected to be invoiced upon completion of the work. After a discussion with me and DMC Corporation general counsel Kathleen Lamb, the DMC EDA requests that the DMC Corporation Board of Directors allow the $16,800 remaining balance of the DMC EDA – AECOM contract be carried forward to the 2020 budget in order to complete the work budgeted for and commenced in 2019. 8 B. DESTINATION MEDICAL CENTER CORPORATION RESOLUTION NO. ___-2020 Authorizing Report to the Legislature Pursuant to Statute BACKGROUND RECITALS A. Minnesota Laws, Chapter 143, Article 10 (the “Act”) provides that by February 15 of each year, the Destination Medical Center Corporation (“DMCC”) and the City of Rochester (the “City”) must jointly submit a report to the chairs and ranking minority members of the legislative committees and divisions with jurisdiction over local and state government operations, economic development, and taxes and to the Commissioners of Revenue and Employment and Economic Development, and to Olmsted County. The DMCC and the City must also submit the report as provided in Minnesota Statutes Section 3.195. The report must include the following specific elements: (1) the development plan and any proposed changes to the development plan; (2) progress of projects identified in the development plan; (3) actual costs and financing sources, including the amount paid with state aid under section 469.47, and required local contributions of projects completed in the previous two years by the corporation, city, county, and the medical business entity; (4) estimated costs and financing sources for projects to be started in the next two years by the corporation, city, county, and the medical business entity; and (5) debt service schedules for all outstanding obligations of the city for debt issued for projects identified in the plan. B. The DMCC and City staff have prepared a draft report, due on February 15, 2020, and attached here as Exhibit A. RESOLUTION NOW, THEREFORE, BE IT RESOLVED, by the Destination Medical Center Corporation Board of Directors that the Chair or Vice Chair of the DMCC is authorized to execute and submit the report to the Minnesota Legislature as required by the Act, in form similar to the report attached here as Exhibit A, as may be modified through further discussions with the City, and to take such other actions as are necessary and appropriate to effectuate the timely submission of the report to the Minnesota Legislature. 1184663.DOCX 9 February ___, 2020 The Honorable Eric Pratt Chair, Jobs and Economic Growth Finance and Policy Committee Minnesota State Senate 3219 Minnesota Senate Building 95 University Ave W St. Paul, MN 55155 The Honorable Tim Mahoney Chair, Jobs and Economic Development Finance Division Minnesota House of Representatives 365 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1206 The Honorable Bobby Joe Champion Jobs and Economic Growth Finance and Policy Committee Minnesota State Senate 2303 Minnesota Senate Building 95 University Ave W St. Paul, MN 55155 The Honorable Bob Gunther Jobs and Economic Development Finance Division Minnesota House of Representatives 277 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1206 The Honorable Julie Rosen Chair, Finance Committee Minnesota State Senate 2113 Minnesota Senate Building 95 University Ave W St. Paul, MN 55155 The Honorable Lyndon Carlson Sr. Chair, Ways and Means Committee Minnesota House of Representatives 479 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1206 The Honorable Richard Cohen Finance Committee Minnesota State Senate 2301 Minnesota Senate Building 95 University Ave W St. Paul, MN 55155 The Honorable Pat Garofalo Ways and Means Committee Minnesota House of Representatives 295 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1206 The Honorable Roger Chamberlain Chair, Taxes Committee Minnesota State Senate 3225 Minnesota Senate Building 95 University Ave W St. Paul, MN 55155 The Honorable Paul Marquart Chair, Taxes Committee Minnesota House of Representatives 597 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1206 EXHIBIT A 10 February ___, 2020 Page 2 The Honorable Ann Rest Taxes Committee Minnesota State Senate 2217 Minnesota Senate Building 95 University Ave W St. Paul, MN 55155 The Honorable Greg Davids Taxes Committee Minnesota House of Representatives 283 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1206 The Honorable Dan Hall Chair, Local Government Committee Minnesota State Senate 3111 Minnesota Senate Building 95 University Ave W St. Paul, MN 55155 The Honorable Mike Freiberg Chair, Government Operations Committee Minnesota House of Representatives 509 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1206 The Honorable Patricia Torres Ray Local Government Committee Minnesota State Senate 2225 Minnesota Senate Building 95 University Ave W St. Paul, MN 55155 Commissioner Steve Grove Minnesota Department of Employment and Economic Development 1st National Bank Building 332 Minnesota Street, Suite E200 St. Paul, MN 55101-1351 Commissioner Cynthia Bauerly Minnesota Department of Revenue 600 North Robert Street St. Paul, MN 55101 The Honorable Matt Flynn Chair, Olmsted County Board of Commissioners 151 4th St SE Rochester, MN 55904 Re: Destination Medical Center February 15, 2020 Report Dear Senators, Representatives, Commissioners and Chairs: On behalf of the Destination Medical Center Corporation (the “DMCC”) and the City of Rochester (the “City”), we are pleased to submit this report on the progress of the Destination Medical Center initiative, in accordance with Minnesota Statutes, Sections 469.40 – 469.47 (the “Act”). The year ending on December 31, 2019, was a transformative year for the Destination Medical Center (“DMC”) initiative. Together, with our partners, we certified over $262 million in 2018 private investments, marked the completion of seven new major private and public infrastructure projects, determined our approach to transit and transportation, confirmed our commitment to affordable housing, and adopted a budget for 2020 that reflects our strategic priorities, which include: transportation, common ground, housing, workforce, transformative projects and sustainability. Specifically, in 2019, we certified a total of $262,001,626.37, for the year ending December 31, 2018, which includes $126,492,416.01 in Mayo Clinic investments and $135,509,210.36 in other private investments. This annual private investment total is nearly 11 February ___, 2020 Page 3 double the 2018 private investment amount, and set single-year records for both Mayo Clinic and non-Mayo-Clinic private investment in the DMC initiative. The cumulative total of Mayo Clinic and other private investments, since 2013, is $690,664,413.37, a figure that is within one percent of the DMC development plan investment forecast. The City of Rochester has contributed $46,235,161.24 in certified expenditures from July 1, 2013, through December 31, 2018. There are currently more than 25 projects either proposed, under construction, or completed, the majority of which are private investments with no DMC-provided public assistance. Approved DMC projects have created construction jobs that generate median wages of more than $39 per hour, plus benefits. This extraordinary combination of private investment, Mayo Clinic expenditures, City and Olmsted County (the “County”) contributions and state funding is making Destination Medical Center a reality. In 2019, in addition to major strides in planning and development, much focus was given to DMCC Phase 1 priorities: Discovery Square: Discovery Square is a sixteen square block area in the Development District and is a keystone to the DMC economic development strategy. As a live, work, and play environment, it represents the future of biomedical research, education, and technology innovation. One Discovery Square, an 89,000 square foot building designed to support the acceleration and translation of the most promising health-related therapies and technology, is a key component to the continued development of the Discovery Square subdistrict innovation ecosystem. It was completed and opened in 2019. Current or future tenants include the University of Minnesota Rochester, Motion Medical (a joint Mayo Clinic-Boston Scientific business accelerator), Royal Philips, Mayo Clinic, Epic Systems, and Rion. Heart of the City: Heart of the City creates a true center of the City, where Mayo Clinic, commercial, hospitality, retail, and residential meet. Heart of the City extends and enhances Peace Plaza to create active experiences and gateways to the other DMC subdistricts, and is also home to the historic Chateau Theatre, a DMC project which was renovated and re-opened in November 2019. A schematic design and design development for the Heart of the City subdistrict is complete and construction will begin in spring 2020. Transportation: A forward-thinking transportation plan is integral to DMC’s success, and great momentum occurred in 2019. Previously, the City authorized integrated transit studies, which examined four areas in depth: downtown transit circulator, street and use operations, parking and travel demand management, and a city loop. The final report was adopted in 2018 and provided the basis for development of a transportation strategy and implementation plan that supports economic development and the realization of the DMC vision. In 2019, the focus was on the selection of the locally preferred alternative for route and mode of the transit line, with an additional emphasis on creating transit villages. The City, County, the DMCC and the Destination Medical Center Corporation Economic Development Agency (the “EDA”) are collaborating to pursue federal matching funds for this critical transportation infrastructure. Additionally, the City has established bike and car-sharing programs, piloted scooter-sharing, and marketed the services offered by the “Arrive Rochester” transportation management association, 12 February ___, 2020 Page 4 This report will provide a brief background of Destination Medical Center and then provide the responses required by the Act. I. Destination Medical Center: Background. A. Private Investment Leads the Public Investment. The Act required that private investment lead the way for this private-public model of partnership: over $200,000,000 in Mayo Clinic and other private investment had to occur before any state funding would begin to flow. That threshold was met, and exceeded, in 2017. B. Development Plan. One of the primary goals of the Act was the adoption of a Development Plan. In September 2013, the DMCC established specific goals and objectives for the Development Plan: to create a comprehensive strategic plan, and over the life of the project, to stimulate over $5 billion in private investment that will be supported by $585 million in public funds, create 35,000- 45,000 new jobs, generate $7.5 billion to $8.5 billion in net new tax revenue, and achieve the highest quality patient, visitor and resident experience. The Development Plan is the strategic framework for the Destination Medical Center initiative, establishing a comprehensive business and economic development strategy. It addresses several items, including land use, transportation and infrastructure planning, market research, funding priorities, business and economic development and market strategies. Upon making the findings set forth in the Act, including finding that the City had approved the Development Plan, the DMCC adopted the Development Plan on April 23, 2015. The Development Plan is posted on the DMCC website: www.dmc.mn. C. Mission Statement. The DMCC’s mission statement provides a framework to guide its work: With Mayo Clinic at its heart, the Destination Medical Center (DMC) Initiative is the catalyst to position Rochester, Minnesota, as the world’s premier destination for health and wellness; attracting people, investment, and jobs to America’s City for Health and supporting the economic growth of Minnesota, its bioscience sector, and beyond. D. Website. The DMCC’s website is: www.dmc.mn. The website contains the regular meeting schedule, meeting agendas, minutes and other information on DMCC activities, as well as project updates, investor and developer information, subdistrict descriptions, market research, and ongoing activities of the EDA. The City’s website, www.rochestermn.gov, also has a link to the DMCC website. II. Specific Elements Required to Be Included in the Report. The Act requires that certain elements be included in this annual report. Some of what is presented here has been referenced above. 13 February ___, 2020 Page 5 A. “The Development Plan and any proposed changes to the Development Plan.” The Development Plan was initially adopted on April 23, 2015, and amended in 2016 to modify the Destination Medical Center Development District, the geographic area in the City of Rochester in which public infrastructure projects are implemented to support DMC. The Development Plan can be found at the DMCC website: www.dmc.mn. The Act requires that the Development Plan be updated not less than every five years. In 2020, a priority goal will be to review the Development Plan and update it where necessary. The statute also requires that the City approve any updates or modifications to the Development Plan, and the DMCC must hold a public meeting prior to its adoption. B. “Progress of projects identified in the Development Plan.” According to the Act, a project must be approved by the DMCC before it is proposed to the City. The DMCC must review the project proposal for consistency with the adopted Development Plan. Since the adoption of the Development Plan on April 23, 2015, several projects have been approved by the DMCC. The Historic Chateau Theatre: is located in the “Heart of the City” subdistrict as described in the Development Plan. In 2015, the DMCC approved the acquisition of the Chateau Theatre by the City for the purchase price amount of $6,000,000, of which Mayo Clinic contributed $500,000. The acquisition of this 10,000 square foot, historically-designated landmark is considered key to the planning and enhancement of the Heart of the City subdistrict. In 2018, the DMCC approved funds to secure and protect the building, and to bring it up to code. After construction of the capital improvements, the Chateau re-opened in 2019. The City selected St. Paul-based Exhibits Development Group to manage and program the building for the next 3-5 years. The Titan Hilton Hotel (formerly known as the “Broadway at Center” project): is located in the “Downtown Waterfront” subdistrict as described in the Development Plan. Approved in 2015, this 371,000 square foot mixed-use project includes a 264-room hotel, restaurants, retail space, a skyway connection, and a five-level public parking ramp with 540 public spaces and 90 private spaces. The restaurants and hotel opened in 2019. The Berkman Apartments (formerly known as the “Alatus Project”): is located on 2nd Street SW in the “Saint Marys” subdistrict as described in the Development Plan. Approved in 2016, this mixed-use project involves the construction of an approximately 350,000 square foot, thirteen-level commercial and residential complex. It will include 350 market-rate rental units, create 235 construction jobs and eight permanent jobs, and is expected to generate $115 million in private investment. Project completion is targeted for summer 2020. The Maven on Broadway (formerly known as Urban on First): is located south of 4th Street SW between 1st Avenue SW and Broadway Avenue, and is in the “Discovery Square” subdistrict as described in the Development Plan. Approved in 2017, this approximately $38 million mixed use project includes a six-story building with 156 market rate rental units, parking, and street level commercial and retail space for a total of 238,700 square feet. The Maven on Broadway was completed in 2019. 14 February ___, 2020 Page 6 One Discovery Square (formerly known as Discovery Square Phase One): is on First Avenue SW in the “Discovery Square” subdistrict as described in the Development Plan. Approved in 2017, this approximately $35 million bio-science building will be a center of innovation and is housing companies whose mission is to accelerate bio-science and technology discoveries to market. The four-story, 89,000 square foot building includes office, collaborative and retail space. As noted above, this project is the first phase of achieving a key component of the Development Plan: providing jobs in the bio-science sector. One Discovery Square was completed in 2019 and is approximately eighty-five percent rented. Wells Fargo Renovation (21 1st Street SW): This project is a renovation of a 92,000 square foot existing building, located in the “Heart of the City” subdistrict as described in the Development Plan. Approved in 2018, this project is a catalyst for the public realm in the Heart of the City subdistrict and will achieve connections of the street and pedestrian skyway. The renovation is making approximately 23,000 additional square feet of commercial or office space available. The project is expected to create 30 construction jobs and sustain 115 permanent jobs. Construction is underway and is scheduled for completion in 2020. Hotel Indigo Renovation: The Hotel Indigo project involves the renovation of an existing 172-room Holiday Inn, located in the “Downtown Waterfront” subdistrict as described in the Development Plan. Approved in 2018, the $42 million redevelopment will include adding 33,000 square feet to the existing 114,500 square feet, and will provide approximately 111 construction jobs and 28 new permanent jobs. Opening of the new hotel is scheduled for 2020. Hyatt House: The Hyatt House project is located in the “Central Station” subdistrict as described in the Development Plan. Approved in 2018, the $44 million project includes an eight-story, 172-room extended-stay hotel, and will create approximately 257 construction jobs and 38 permanent jobs. Construction began in mid-2019, with completion expected in 2021. There are several other projects underway, in the initial stages of planning, or expected to come to fruition in 2020. The status of these projects will be reported in a future annual report. In addition to the approved projects noted above, the DMCC and the City have approved a Capital Improvement Plan (“CIP”) for public infrastructure projects for 2020. Projects identified in the CIP are categorized as follows: Infrastructure, Transit, and Economic Development and Public Realm Improvements. Infrastructure Projects include:  Sanitary Sewer Replacements and Upgrades  North Broadway Reconstruction  Reconstruction of 6th/7th Avenues NW/SW  Transit Circulator Prototyping  District Energy Evaluation and Implementation  Smart City Implementation: Air Quality Monitoring Transit Projects include:  Phase 1 DMC Transit Plan Implementation 15 February ___, 2020 Page 7  Transportation Management Association (“Arrive Rochester”) Implementation  Integrated Transit Studies Implementation  Dedicated Bike Lanes on 3rd and 4th Avenues and Center Street  Mobility Hub Site Selection and Circulator Route Development  St. Marys Station Design  Transit Villages: Design and Acquisition Economic Development and Public Realm Improvements include:  3rd Street SW Reconstruction and Design  Heart of the City, Peace Plaza and 1st Avenue, Alley  Chateau Theatre Improvements  Discovery Walk Design and Implementation The DMC-funded projects above are only a portion of the number and type of public and private development projects in the DMC district. Early strategic DMC investments in public infrastructure and commercial and residential projects successfully established Rochester as a destination for investment and development. Other projects, which are now proceeding without the need for public DMC support, include workforce and market-rate housing, extended stay hotels for patients and companions, renovations to historic properties, world-class medical care and research facilities, co-working space, small business improvements, and more. These efforts have also positioned Rochester as a testing ground for innovative public-private partnerships; for example, downtown Rochester will soon host a year-long automated “EasyMile” vehicle pilot operated by First Student and sponsored by the Minnesota Department of Transportation. C. “Actual costs and financing sources, including the amount paid under Minnesota Statutes Section 469.47, and required local contributions of projects completed in the previous two years by the DMCC, City, Olmsted County and Mayo.” The Act requires that an annual certification of private investment by Mayo Clinic and other private investors be made to DEED by April 1 of each year, and DEED must certify that $200,000,000 of private investment has been made before any state funding may be paid. This threshold was met and exceeded in 2017. The cumulative total amount of private and Mayo Clinic certified investments to date is $690,664,413.37. In compliance with Minnesota Statutes Section 469.47, attached is the revised, annual certification of Mayo Clinic and other private investment that was submitted to DEED on May 15, 2019, and the revised annual certification of City expenditures, that was submitted to DEED on May 31, 2019 (Exhibit A). DEED conducted its own audit process of the certified expenditures, requested revisions, and then approved the expenditures. The DEED certifications, dated June 25, 2019, are also attached (Exhibit B). In addition, we offer the following information: 1. Through December 31, 2019, State Infrastructure Aid in the amount of $22,468,468.36 has been received. No State Transit Aid has been received. 2. Actual costs paid by the City from commencement through December 31, 2019 have totaled $57,255,483, based on year-end unaudited costs. The funding source was initially City internal borrowing, which is being repaid along with the costs for new projects and initiatives by the City’s 0.25% DMC sales tax. The City 16 February ___, 2020 Page 8 has also issued capital debt for a new parking ramp in the district. Just as the Mayo Clinic investments and other private investments have underscored the commitment to DMC, so too have the City contributions. 3. Through December 31, 2019, Olmsted County has contributed $10,500,000. 4. The 2020 combined operating and capital improvements budget for the DMCC totals $60,333,966, a portion of which (approximately $20 million) is being paid for with funding other than DMC funds. Of this amount $3,000,000 will be provided by Olmsted County from its wheelage tax. The remaining amount is to be provided by the City of Rochester from a variety of City funding sources, including its .25% DMC sales tax. In addition, Mayo Clinic has pledged financial and in-kind funding to the EDA in the amount of $ 1,313,742. D. “Estimated costs and financing sources for projects to be started in the next two years by the DMCC, City, Olmsted County and Mayo.” The Development Plan sets forth a framework and examples of projects that may be considered for funding in the next several years. Each project will be approved on an individual basis. See also the response to “B” and “C,” above. E. “Debt service schedules for all outstanding obligations of the City for debt issued for projects identified in the plan.” The debt service schedule is attached as Exhibit C. CONCLUSION Thank you for your consideration of this annual report. On behalf of both the DMCC and the City, we welcome your comments or questions. We look forward to continued progress on the Destination Medical Center initiative in 2020. R.T. Rybak, Chair Kim Norton, Mayor Destination Medical Center Corporation City of Rochester Enclosures cc: Legislative Reference Library 1182720-7.DOCX 17 EXHIBIT A to February 15, 2020 Report 18 EXHIBIT A Revised Annual Certification of Mayo Clinic and Other Private Investment Submitted to DEED on May 15, 2019 and Revised Annual Certification of City Contributions Submitted to DEED on May 31, 2019 19 EXHIBIT A 20 21 D D C7 2 m z 22 20 1 8 Tr a c k i n g Wo r k s h e e t B ui l d i n g Pe r m i t s wi t h i n th e DM C Bo u n d a r y (Do e s no t in c l u d e Ma y o Pr o j e c t s ) Yea r 201 3 201 4 201 5 201 6 201 7 201 8 TOT A L Co m p l e t e d Pro j e c t s $ 94 , 4 2 5 . 0 0 $ 94 , 4 9 8 . 0 0 $ 83 , 3 0 1 . 0 0 $ 5, 0 2 0 , 0 0 0 . 0 0 $ 6, 1 6 5 , 6 6 6 . 0 0 $ 1, 7 3 1 , 4 6 8 . 0 0 $ 13 , 1 8 9 , 3 5 8 . 0 0 201 6 / 2 0 1 7 De s t i n a t i o n Me d i c a l Ce n t e r -P a r t i a l l y Co m p l e t e d Pr o j e c t s Tr a c k i n g Pro j e c t Ad d r e s s To t a l Bu i l d i n g Pe r m i t Val u e 20 1 6 20 1 7 20 1 8 Par t i a l Co m p l e t e d Wo r k Cla i m e d Co m p l e t e d Wo r k Cla i m e d Co m p l e t e d Wo r k Cla i m e d 1st Av e n u e Fl a t s 40 0 NW 1 Av e n u e $ 8, 7 1 9 , 7 3 5 . 5 7 $ 4, 9 7 6 , 2 4 4 . 0 0 $ 3, 7 4 3 , 4 9 1 . 5 7 Lof t s at Ma y o Pa r k 12 3 SE 6 Av e n u e $ 6, 9 0 0 , 0 0 0 . 0 0 $ 6, 3 4 7 , 5 5 2 . 9 7 $ 55 2 , 4 4 7 . 0 3 501 on Fi r s t 50 1 SW 1 Av e n u e $ 12 , 9 7 7 , 1 8 2 . 7 5 $ 12 , 5 3 4 , 1 8 6 . 9 6 $ 44 2 , 9 9 5 . 7 9 Fla t s on 4t h (B u c k e y e ) 41 2 SE 3 Av e n u e $ 13 , 0 8 2 , 2 9 2 . 0 0 $ 8, 9 0 6 , 9 3 7 . 4 0 $ 4, 1 7 5 , 3 5 4 . 6 0 Tot a I $ Dol l a r Va l u e of bu i l d i n g pe r m i t s fi n a l e d in 20 1 6 Dol l a r am o u n t su b m i t t e d fo r pa r t i a l wo r k in 20 1 6 41 , 6 7 9 , 2 1 0 . 3 2 $ 201 7 / 2 0 1 8 De s t i n a t i o n Me d i c a l Ce n t e r -P a r t i a l l y Co m p l e t e d Pr o j e c t s Tr a c k i n g 32 , 7 6 4 , 9 2 1 . 3 3 $ 1,5 5 5 , 1 2 5 . 0 0 31, 2 0 9 , 7 9 6 . 3 3 4, 2 9 5 , 9 3 8 . 6 0 $ 4, 6 1 8 , 3 5 0 . 3 9 Tot a l Bu i l d i n g Pe r m i t Pro j e c t Ad d r e s s Va l u e 20 1 7 20 1 8 Pa y m e n t s AI A Doc u m e n t a t i o n t hr u 12 / 3 1 / 2 0 1 8 Par t i a l Co m p l e t e d Wo r k Cla i m e d Co m p l e t e d Wo r k Cla i m e d B ro a d w a y @C e n t e r 10 Ea s t Ce n t e r St r e e t $ 84 , 2 8 2 , 4 6 3 . 0 0 $ 33 , 8 6 6 , 9 6 3 . 9 8 $ 50 , 4 1 5 , 4 9 9 . 0 2 $ 85 , 2 1 6 , 4 7 3 . 5 9 Dis c o v e r y Sq u a r e 20 2 SW 4 St r e e t $ 16 , 0 0 9 , 0 0 0 . 0 0 $ 2, 9 6 5 , 0 7 3 . 3 0 $ 13 , 0 4 3 , 9 2 6 . 7 0 $ 21 , 4 7 6 , 1 6 7 . 1 7 D ol l a r am o u n t su b m i t t e d fo r pa r t i a l wo r k $ 10 0 , 2 9 1 , 4 6 3 . 0 0 $ 36 , 8 3 2 , 0 3 7 . 2 8 $ 63 , 4 5 9 , 4 2 5 . 7 2 23 20 1 8 Tr a c k i n g Wo r k s h e e t 201 8 De s t i n a t i o n Me d i c a l Ce n t e r -P a r t i a l l y Co m p l e t e d Pr o j e c t s Tr a c k i n g Pro j e c t Ad d r e s s To t a l Bu i l d i n g Pe r m i t Val u e 20 1 8 Par t i a l Co m p l e t e d Wo r k Cla i m e d R on a l d Mc D o n a l d Ho u s e 85 0 2n d St r e e t SW $ 10 , 1 2 6 , 0 0 0 . 0 0 $ 4, 8 7 2 , 3 6 3 . 0 1 H ot e l In d i g o (H o l i d a y In n ) 22 0 So u t h Br o a d w a y $ 5, 5 0 0 , 0 0 0 . 0 0 $ 1, 1 5 6 , 3 3 3 . 1 5 R es i d e n c e @ Di s . Sq . 51 1 3r d Av e . SW $ 19 , 0 0 0 , 0 0 0 . 0 0 $ 9, 8 2 0 , 8 8 0 . 0 9 U rb a n on Fi r s t 42 9 So u t h Br o a d w a y $ 28 , 6 0 0 , 0 0 0 . 0 0 $ 12 , 4 5 5 , 9 5 4 . 0 0 Ber k m a n (A l a t u s ) 21 7 & 30 1 14 t h Av e SW $ 98 , 2 0 6 , 8 0 0 . 0 0 $ 25 , 9 3 6 , 5 4 6 . 0 0 161 , 4 3 2 , 8 0 0 . 0 0 $ 54 , 2 4 2 , 0 7 6 . 2 5 TOT A L $ 13 5 , 5 0 9 , 2 1 0 . 3 6 24 20 1 h Da c t i n a t i n n Mr r l i a l Cr n i P r Pa r f i a l l y Cm m ~ l r r n r l Pr n i c r i c Tr a r k i n w n Po t' I a i m u A Pro je c t Ad d r c u 20 1 6 20 1 7 20 1 7 20 1 8 P ar t i a l Co m p l e t e d Wor k Oa i m e d Pe r m i t Nu m b e r Va l u e Co m p l e t i o n Dat e Pe r m i t Nu m b e r Va l u e Co m p l e t i o n Dat e To t a l Pe r m i t s Ba l a n c e Cl a i m e d Ba l a n c e Cl a i m e d 1st Av e n u e Fl a [ s 40 0 NW 1 Av e n u e $ 4, 9 7 6 , 2 4 4 . 0 0 R1 6 - 0 0 2 4 M F B 5 62 2 , 0 0 0 . 0 0 RI 6 - 0 0 0 8 M F 8 5 8, 0 9 7 , 7 3 5 . 5 7 6/ 2 6 / 2 0 1 7 $ 8, 7 1 9 , 7 3 5 . 5 7 5 3, 7 4 3 , 4 9 1 . 5 7 Lok s at Ma y o Pa r k 12 3 SE 6 Av e n u e $ 6, 3 4 7 , 5 5 2 . 9 7 R3 5 - 0 0 7 9 M F 9 $ 79 4 , 3 2 3 . 0 0 3/ 6 / 2 0 1 7 R3 6 - O O 1 1 M F 8 5 6, 1 0 5 , 6 7 7 . 0 0 6/ 1 7 / 2 0 3 7 S 6, 9 0 0 , 0 0 0 . 0 0 S 55 2 , 4 4 7 . 0 3 501 on Fi r s [ 50 1 SW 1 Av e n u e $ 12 , 5 3 4 , 1 8 6 . % R3 5 - 0 0 5 3 M F B $ 1, 5 5 5 , 1 2 5 . 0 0 9/ 2 / 2 0 1 6 R3 5 - 0 O S S M F B $ 11 , 4 2 2 , 0 5 7 . 7 5 1/ 2 8 / 2 0 1 8 S 12 , 9 7 7 , 1 6 2 . 7 5 $ 44 2 , 9 9 5 . 7 9 Fla t s an 4t h (b u c k e y e ) 41 2 SE 3 Av e n u e S 8, 9 0 6 , 9 3 7 . 4 0 R3 5 - 0 1 0 7 M F 8 S 2, 0 0 0 , 0 0 0 . 0 0 12 / 6 / 2 0 1 8 R3 6 - 0 0 0 9 M F 8 5 10 , 6 6 2 , 2 9 2 . 0 0 2/ 1 2 / 2 0 1 8 S 13 , 0 8 2 , 2 9 2 . 0 0 5 4, 1 7 5 , 3 5 4 . 6 0 I V IH L TO I LU I O ~ Dol l a r am o u n t fi n a l e d in 20 1 6 Dol l a r am o u n t su b m i t t e d fo r pa r t i a l wo r k in 20 1 6 $ TOT A L fo r 20 1 7 S TOT A L fo r 10 1 8 S 1L , / b 4 ~ ` l 1 1 . ~ 3 1,5 5 5 , 1 2 5 . 0 0 31, 2 0 9 , 7 9 6 . 3 3 4,2 9 5 , 9 3 8 . 6 0 4,6 1 8 , 3 5 0 3 9 5 41 , 6 7 9 , 2 1 0 . 3 2 S 4, 2 9 5 , 9 3 8 . 6 0 5 4, 6 1 6 , 3 5 0 3 9 711 1 7 I) a c t i n a t i n n Ma e l i a l fa n T a r - Da n i a l l y fm m ~ l o f o ~ i Pr n i o r f c Tr a r 4 i n e Pro ec t Ad d r e s s 2Q 1 7 20 1 7 20 1 8 Par t i a l Co m p l e c e d Wor k Cl a i m e d Pe r n i k Nu m b e r Vd u e Co m p l e t i o n Dat e Pe r n i k Nu m b e r Va l u e Co m p l e t i o n Dat e Pe r n i k Nu m b e r Vd u e Co m tl on DN e To t a l Pe r m k s Ba l a n c e to Cl d m Bro a d w a y @C e n t e r 10 Ea r t Ce n t e r St r e e t $ 33 , 8 6 6 , 9 6 3 . 9 8 R1 5 - 0 O B i C B S 1, 0 0 0 , 0 0 0 . 0 0 12 / 6 / 2 0 1 8 R3 5 ~ 0 3 8 4 C 8 $ 45 , 0 0 0 , 0 0 0 . 0 0 R1 5 - 0 4 4 7 C B $ 38 , 2 8 2 , 4 6 3 . 0 0 S 84 . 2 8 2 . 4 6 3 . 0 0 $ 50 , 4 1 5 , 4 9 9 . 0 2 Dix w e ua r e 20 2 4t h St r e M SW 5 2, % 5 , 0 7 3 . 3 0 R3 7 - 0 3 8 4 C B 5 1, 7 5 0 , 0 0 0 . 0 0 11 / 1 3 / 2 0 1 8 R1 7 -0 45 4 C 8 5 12 9 0 , 0 0 0 . 0 0 11 13 / 2 0 1 8 R3 7 -0 4 9 X 8 S 12 , % 9 , 0 0 0 . 0 0 $ 16 , 0 0 9 , 0 0 0 . 0 0 $ 13 , 0 4 3 , 9 2 6 . 7 0 w ~w ~ r o r c u a i ~ oo p . s c , u ~ i . c a Dol l a r am o u n t fi n a l e d in 20 1 7 S - Do l l a r a m o u n t su b m i t t e d fo r pa r t i a l wo r k in 20 1 7 $ 36 , 8 3 2 , 0 3 7 . 2 8 TOT A L fa 20 1 8 S 63 p 5 9 , 4 2 5 . 7 2 701 R Dr c t i n a t i n n Me d i a l (' a n i P r -P a r t i a l l y ~m m ~ l o t n d Dr n i r r t c Tr a r k i n w > wg e y a p o e . u u ~ 03 ~ 4 D 7 ~ 9 g J L Vro je c t Ad d r e s s 20 1 8 20 1 8 20 1 9 Par t i a l Co m p l e t e d Wor k Cl a i m e d Pe r m i t Nu m b e r Va l u e Co m p l e t i o n Dat e Pe r t n i [ N u m b e r Va l u e Co m D ~ e t i o n Dat e Ve r m i t Nu m b e r Va l u e Co m p l e t i o n Da t e To [ a l Ve r m i t s Ba l a n c e to Cl a i m Ron a l d Mc D o n a l d Ho u s e 85 0 2n d St r e e t SW S 4, 8 7 2 , 3 6 3 . 0 1 R3 8 - 0 0 4 8 C B 5 10 , 1 2 6 , 0 0 0 . 0 0 5 10 , 1 2 6 , 0 0 0 . 0 0 S 5, 2 5 3 , 6 3 6 . 9 9 Hot e l In d i g o (H o l i d a y In n ) 22 0 So u t h Br o a d w a y $' 1; 1 5 6 , 3 3 3 1 5 R1 8 - 0 2 9 4 C B $ 50 0 , 0 0 0 . 0 0 R3 8 - 0 3 8 9 C B 5 5, 0 0 0 , 0 0 0 . 0 0 5 5, 5 0 0 , 0 0 0 . 0 0 5 4, 3 4 3 , 6 6 6 . 8 5 Res i d e n c e DD i s . Sq . 51 1 3 r d Av e . S W 5 9, 8 2 0 , 8 8 0 . 0 9 R3 7 - 0 1 4 3 M F B 5 1, 7 5 0 , 0 0 0 . 0 0 R1 7 - 0 1 4 1 M F 8 S 17 , 7 5 0 , 0 0 0 . 0 0 $ 19 , 0 0 0 , 0 0 0 . 0 0 5 9, 1 7 9 , 1 7 9 . 9 1 Urb a n on Fi r s t 42 9 5 o u t h Br o a d w a y 5 12 , 4 5 5 , 9 5 4 . 0 0 R3 8 - 0 0 0 3 M F 8 S 22 0 , W 0 . 0 0 R3 8 - 0 0 1 5 M F B $ 28 , 3 8 0 , 0 0 0 . 0 0 $ 26 , 6 0 0 , W 0 . 0 0 S 16 , 3 4 4 , 0 4 6 . 0 0 Ber k m a n (A l a t u s ) 21 7 &3 0 3 1 4 t h Av e SW 5 25 , 9 3 6 , 5 4 6 . 0 0 R3 7 - 0 1 5 7 M F 0 5 4, 9 0 0 , 0 0 0 . 0 0 R3 8 - 0 0 1 3 M F B $ 86 , 2 3 7 , 5 0 7 . 0 0 N1 8 - 0 0 3 7 M F B $ 7, 6 6 9 , 2 9 3 . 0 0 $ 98 , 2 4 6 , 8 0 0 . 0 0 $ X7 2 , 2 7 0 , 2 5 4 . 0 0 ~ vi / u rv r Ni a 7 ~. < r G . u i o . c ~ PA( l T 1 A L PR O l E R S GRA N D TO T A L FO R 20 1 8 S 12 2 , 3 1 9 , 8 5 2 . 3 6 25 20 1 6 De s t i n a t i o n Me d i a l Ce n t e r -P a r t i a l l y [o m e l e t n d Vr o i n c t s 7r a c k i n ¢ Tn Rn [l a i m e d Pro j e c t Ad d r e s s 20 1 6 20 1 7 20 1 7 20 1 8 Par t i a Co m p et e Wor k Cl a i m e d Pe r m l t Nu m b e r Va l u e Co m p et i o n Dat e Pe r m i t Nu m b e r Va l u e Co m p et i o n Dat e To t a l Pe r m i t s Ba l a n c e Cl a i m e d Ba l a n c e Cl a i m e d 1st Av e n u e Fl a t s 40 0 NW 1A v e n u e S 4, 9 7 6 , 2 4 4 . 0 0 R3 6 - 0 0 2 4 M F 8 S 62 2 , 0 0 0 . 0 0 R1 6 - 0 0 0 8 M F 8 5 8, 0 9 7 , 7 3 5 . 5 7 6/ 2 6 / 2 0 1 7 5 8, 7 1 9 , 7 3 5 . 5 7 5 3, 7 4 3 , 4 9 1 . 5 7 Loh s at Ma y o Pa r k 12 3 SE 6 Av e n u e $ 6, 3 4 7 , 5 5 2 . 9 7 R3 5 - 0 0 7 9 M F B $ 79 4 , 3 2 3 . 0 0 3/ 6 / 2 0 1 7 R1 6 - O O I I M FB 5 6, 1 0 5 , 6 7 7 . 0 0 8/ 1 7 / 2 0 1 7 $ 6, 9 0 0 , 0 0 0 . 0 0 5 55 2 , 4 4 7 . 0 3 501 on Fi r s t SO 1 5 W 1 Av e n u e 5 12 , 5 3 4 , 1 8 6 . 9 6 R1 5 - 0 0 5 3 M F B 5 1, 5 5 5 , 1 2 5 . 0 0 9/ 2 / 2 0 1 6 R3 5 - O O S S M F B $ 11 , 4 2 2 , 0 5 7 . 7 5 1/ 2 8 / 2 0 1 8 5 12 , 9 7 7 , 1 8 2 . 7 5 $ 44 2 , 9 9 5 . 7 9 Fla t s on 4t h (B u c k e y e ) 41 2 SE 3 Av e n u e 5 8, 9 0 6 , 9 3 7 . 4 0 RS S - 0 3 0 7 M F B 5 2, 4 0 0 , 0 0 0 . 0 0 12 / 6 / 2 0 1 8 R1 6 - 0 0 0 9 M F B $ 10 , 6 8 2 , 2 9 2 . 0 0 2/ 1 2 / 2 0 1 8 $ 13 , 0 8 2 , 2 9 2 . 0 0 $ 4, 1 7 5 , 3 5 4 . 6 0 I V IA L TO f 1( 1 1 6 5 Dol l a r a m o u n t fi n a l e d in 20 1 6 Dol l a r am o u n t su b m i t t e d fo r pa r t i a l wo r k in 20 1 6 $ TOT A L fo r 20 1 7 S TOT A L Jo r 20 1 8 $ iL , / 6 9 . ' l L l . i i 1,5 5 5 , 1 2 5 . 0 0 31, 2 0 9 , 7 9 6 . 3 3 4,2 9 5 , 9 3 8 . 6 0 4,6 1 8 , 3 5 0 3 9 5 41 , 6 7 9 , 2 1 0 . 3 2 5 4, 2 9 5 , 9 3 8 . 6 0 5 4, 6 1 8 , 3 5 0 3 9 707 7 ~w c f i n a t i n n Ma ~ l i a l fa n t a r - Pa r t i a l l y fm m ~ l a t a e l Dr n i a n e Tr a ~ 4 i n o Pro ec t Ad d r e u 20 1 7 20 1 7 ZO U Par t i a l Co m p l e t e d Wor k Cl a i m e d Pe r m i t Nu m b e r Va l u e Co m p l e t i o n Dat e Pe r n i k Nu m b e r Va l u e Co m p l e t i o n Dat e Pe r m i t Nu m b e r Va l u e Co m Ie t i o n Da t e To t a l Pe r m i t s Ba l a n c e to Cl a i m Bro a d w a y @C e n t e r 10 Ea s t Ce n t e r St r e e t 5 33 , 8 6 6 , 9 6 3 . 9 8 R1 5 - O O S 1 C 6 $ 1, 0 0 0 , 0 0 0 . 0 0 12 / 6 / 2 0 1 8 R1 5 -0 3 8 4 C 8 $ 45 , 0 0 0 , 0 0 0 . 0 0 R1 5 -0 4 4 7 C 6 $ 38 , 2 8 2 , 4 6 3 . 0 0 $ 84 , 2 8 2 , 4 6 3 . 0 0 $ 50 , 4 1 5 , 4 9 9 . 0 2 Dis c o v e S ua r e 20 2 4t h St r e e t SW $ 2, 9 6 5 , 0 7 3 . 3 0 R1 7 - 0 3 8 4 [ 8 5 1, 7 5 0 , 0 0 0 . 0 0 11 / 1 3 / 2 0 1 8 R1 7 - 0 4 5 4 [ 8 5 1, 2 9 0 , 0 0 0 . 0 0 11 / 1 3 / 2 0 1 8 Rl ) - 0 4 9 2 [ 8 $ 12 , 9 6 9 , 0 0 0 . 0 0 S 16 , 0 0 9 , 0 0 0 . 0 0 S 13 , 0 4 3 , 9 2 6 . 7 0 IOI A L f O r 20 3 7 ~ ~b ~ t f j L~ U 3 /. 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Yw~ieep~_.CWw.+~u:~.'w:Wo~sw~aNt~:van. ~ x ___. <vi ~'*u>u w w Ra. ~...._swr+w a'~c xaw s.ua~. +~m,!N+:.faww+un. d~w~_..__. ua~a4e. :~cek A adeW apnFvi p~ szP <cW~W :iYM.. tiu~~M' S. b wf a.~wi au:~sn ~a¢¢n0 at:i 32 n 2 m z N 33 MAYO CLINIC M arch 20, 2019 Steve Gro~~e Commissioner M innesota Departmen( of Employment and Economic Development 1 st National Bank Building 332 Minnesota Street, Suite E-200 Sain[ Paul, MN, 55101-1351 Dear Commissioner Grove: 200 First Strcct S11! Rochester, Min~lesota 5 905 J~~-284-ZJ11 m avoclinic.org Attached with this letter is Mayo Clinic's certification of qualified expenditures of the medical business entity for the Destination Medical Center (DMC) initiative for the period starting January 1, 2018 and ending December 31, 2018. The amount of qualified investment is approximately $126.5 million. Major projects included the modernization and expansion of Mayo Clinic Hospital, Saint Marys Campus Ind the fit-out of the Mary Brigh building's third-floor operating rooms_ As in prior years, Mayo Clinic is taking a conservative approach when counting DMC-eligible capital expenditures, and we remain committed to achieving the lo~~g-term DMC developmeist and investment goals. Overall, Mayo Clinic expended more than $274 million on capital projects and equipment in Rochester, Minnesota in 218. In addition to our commitment to DMC, these investments include continued improvements to our IT infrastructure and elech•onic health record, the purchase of world-class medical equipment, and more. In total, Mayo Clinic will invest more than $1 billion in Rochester facilities and equipment between now a►~d 2021. We look forward to working with [he State of Minnesota, City of Rochester, Olmsted County, and other stakeholders to strengthen our economy and affirm Minnesota's position as the world's premier destination medical center. Thank you. i / ~ ~j_~ Jeffrey W. Bolton Chief Administrative Officer Mayo Clinic cc= Kevin McKinnon, Deputy Commissioner Economic Development, Minnesota Department of Employment and Economic Development 34 Permitted Expenditures from July 1, 2013 to December 31, 2018 Total Expeditures Total Spent as of Approval Date Project/Equipment Name reported for 2018 December 31st 2018 02/18/11 Mary Brigh Easl Expansion 4,100.00 2,065,139.65 11/09/12 Dermatology Remodel -9,123,648.24 11/09/12 Sports Medicine Center -5,666,939.49 07/03/13 2915 Warehouse Infrastructure -693,219.52 07/10/13 Core 200 SMH Operating Room Renovation -1,411,411.46 07/10/13 Anatomic Pathology Office Remodel -476,041.94 07/10/13 Psychiatry and Psyctwlogy Master Plan, Phase 1A - Generose Main -1,213,985.91 07/11/13 Development Remodel -2,679,274.32 08/01/13 Bed Tower Modernization MB east 1,390,771.52 44,116,778.02 08/01/13 Domitilla 3 Modernization 10,471.83 7,762,425.78 08/14/13 Remodeling laboratory space on Guggenheim 5.-265,065.75 08/29/13 Sainl Marys Hospital Chiller Addition 93,892.23 4,631,632.46 09/25/13 Instdule Hills Chiller Replacement -441,903.16 1 1/06/13 Radiation Oncology Room "E" Linear Accelerator Replacement -188,793.94 12/11/13 DLMP Phlebotomy Remodel -1,615,648.60 02/05/14 Mary Brigh Electrical Upgrades (Phase 3)-2,002,781.62 02/21/14 SDSC Expansion Construction Only 270,639.13 21,491,384.97 02!26/14 Creation of the consolidated freezer and BAP facility at the 2915 Warehouse -4,006,693.46 02/26!14 Remodeling of mukiple laboratories on Guggenheim 8 -774,090.58 03/19/14 Four Operating Rooms Off Core 700 -3,082,756.73 04!23/14 Remodeling wdhin the Meta6olomics Core on Alfred 5 -616,212.48 2Q2014 Thermo TSQ Triple Quadrapole MS (assets 147506 8 145344)-596,292.00 04/23/14 Remodeling within Opus 1 to accommodate space for a new CT machine.-480,162.90 04!30114 Employee and Community Health Southeast Clinic -4,326,200.60 04/30/14 Cardiac Catheterization Procedure Room 103 Remodel - SaiM Marys, Mary Brigh 4 -412,584.91 06/04/14 Gonda 5, 5th PET/CT Installation &Uptake -301,874.69 06/18/14 Executive, Development and International Program Expansion -Mayo East 5 -1,389,522.23 071D2114 DOM 3/4 Infrastructure Revisions for Remodeling -2,109,759.78 07!23/14 Clinical Genome Sequencing, Lab Expansion -296,600.82 08/14/14 Varian Medical Systems (asset 145374)-3,334,879.00 08/20/14 CMCT and Prev. Med. Relocation Gonda 18 to Mayo East 17 -358,383.16 03/04/15 Cancer Center Station Eisenberg 43 -892,147.20 03/18/15 CT Simulator I Replacement Charlton S-259, 5-261 -191,170.81 1 1/13/14 CT Scanner -Syr (Asset 162815)-687,812.80 04/29/15 Charlton 2 Incremental 3T Body Scanner -749,773.48 04/29/15 3T Siemens Skyra MRI (assest 166875, 167065-167082)-1,637,261.00 05/13/15 SMC, Mary Brigh Main NH, MR~u1CR 1.ST Replacement Scanner -448,573.83 05/13/15 GE; 1.5T Optima MR450W (assest 165084, 165346-165359)-1,130,292.00 05/13/15 SMC, Mary Brigh Main NH, MR-MCR 1.5T Replacement Scanner -595,824.68 05/13/15 DISCOVERY MRI Mary Brigh (assets 169437,171643, 171651, 171661-171672)-1,513,704.55 07/22/15 Renovation Mary Brigh Main, PACU -Phase 4 -2,059,423.01 05/14/15 SMH Mary Brigh East Corridor Relocation 153,383.33 4,871,106.59 02/25/15 Dr. Lee Diamond Reactor Lab Remodel on Med Sci SL -226,408.57 7/23/2014 MR-RO-CN-1-MR/PET installation -781,558.09 3rd qtr 2014 GE; DISCOVERY MR750 PET (Assets 149876, ,1 501 45-1 5 01 5 7, 1 5066 8-1 50670)-3,698,538.02 8/20/2014 CT Scanner Replacements (3L, 3Z & 4J) - somatom - CH 2 -561,057.62 3rd qtr 2014 Somalom Force CT (Asset 157628)-1,631,372.00 1 2/11/2014 Linear Acc Replace Rm "C"-185,937.00 08/14/14 VARATHON MEDICAL; TRUE BEAM (Asset 162800)-2,695,908.00 08!14/14 SIEMENS; CT EDGE (Asset 163463)-656,459.02 08!14/14 SIEMENS; SOMATOM DEFINITION (Asset 164325)-862,578.20 10/9/2014 Incremental MRI Body Scanner -603,049.87 08/14/14 SIEMENS; SKYRA 3TMRI (Asset 157191, 157322-157339)-1,859,239.D0 1 2/12/2013 G03 Build 2 CT Bays -656,293.35 1 1/13/14 SIEMENS; SOMATOM FORCE CT (Asset 149843)-1,750,000.00 05!08/14 PHILIPS; XPER FD20 (Assets 147302, 147339, 147392)-1,649,213.30 1/9/2015 Neurology Renovation, Mayo 8 3,256.54 4,989,615.93 6/21/2014 Mayo 8 -Lobby Remodel -1,137,290.91 4/2 8120 1 5 Vascular OR Core 801 SMH -1,059,949.88 5/30/2014 Rad Vascular Imaging Ste 90 -144,461.29 5/8/2014 SIEMENS MEDICAL; ARTIS ZEE (Asset 146871,146872)-985,408.00 2/4/2014 CT MBM Incremental Interventional CT -1,268,114.01 8/1/2013 SIEMENS; DEFINITION EDGE CT (Asset 148622, 148623)-1,315,697.00 10/15!2014 CH N Neuro Scanner CN I-119C -561,796.54 6/14/2014 SIEMENS; PRISMA 3T MRI and Accessories (Asset 157677, 15793&157946)-2,241,875.00 U5PS Building Purchase (Asset 156757, 156758)-2,185,017.25 1 2/11/14 Land for Ronald McDonald House (Asset 147588, 147589)-1,000,203.16 6/14/2014 GE; DISCOVERY 710 PET Scanner (Asset 148389)-2,103,046.58 2/17/2016 Fixed Wing Building -533,262.51 5/25/2016 Hematopalhology Consolidation, Hikon Building 7th Floor -2,018,886.34 6/29!2016 Vacate Ei 7-1l7-2 Dermatology Phototherapy Phototherapy Relocation -439,830.58 6/31/2016 Relocation of Respiratory Care Unit -1,184,489.68 3/31/2016 Linen Service Depot-3939 Building -1,882,309.32 6/30/2016 Media On Demand Replacement Project -699,440.19 7/8/2016 Temporal Bone Lab remodel (original $600K)-126,259.12 4/27/2016 Dr. Misra Laboratory, Gugg 6 -314,232.69 6/8/2016 Lab Remodel Gugg 17 and 18 115,877.42 507,816.33 9/14/2016 Space assignment for Dr. Bums and Dr. Scarisbrick surgery —Guggenheim 6 -372,474.03 35 Permitted Expenditures from July 1, 2013 to December 31, 2018 Total Expeditures Total Spent as of Approval Date ProjecUEquipment Name reported for 2018 December 31st 2018 9/28!2016 Guggenheim 13 Space Remodel -286,997.78 6/30/2016 Charlton Desk R Lobby Remodel 19,426.47 397,223.24 11/1/2015 Jacobson Building Operating Rooms 1,417,934.63 23,555,492.80 2/17/2016 Charlton 1 PET/CT (DRX-1 Replacement) E-3006 -132,948.22 2/11/2016 GE -Discovery PET/CT 710 (Asset 178322)-1,500,726.20 May 2016 Gastroenterology & Hepatology Renovation -4,259,346.50 9/29/2016 Stryker Sales Corporation -Alfred 6 Integration (Assets 18059&180603)-1,126,322.95 9/29!2016 Philips Fluoroscopy (Assets 181122-181123)-1,335,625.38 Aug 2016 7T MRI Scanner 179,678.76 1,916,246.30 2/1/2014 SMH Campus Radiology Consolidation 2,974,035.78 24,110,924.65 11!1/2015 Mary Brigh East Tower Additional Floors 840,912.07 17,320,446.83 11/1/2015 Eisenberg 7-1 and 7-2 1,462,790.33 6,312,270.07 1 2 /112 01 5 Pre Post Expansion on Gonda 2 Gonda 267 -266,028.69 1 1 /1 912 01 5 Franklin Heating Station Chiller #4 Replacement 25,131.85 2,286,167.61 11/4/2015 Mary Brigh 4, Room 106 Heart Rhythm Services Remodeling -538,995.91 5/5/2016 Siemens -Fluoroscopy 106 (Asset 172294)-1,508,299.00 1 1/4/2015 Mary Brigh 4, Room 111 Heart Rhythm for Equipment Replacement -217,834.13 8/11/2016 Siemens -Siemens fluoroscopy room 111 (Asset 179164)-801,942.00 1 1/4/2015 Charlton North MR-MCR NU 3T Replacement Scanner -354,930.50 MAGNETOM Prisma 3T (asset 173601)-2,184,842.00 1 1/4/2015 Charlton NoKh MR-MCR NT 1.5 Replacement Scanner 2,976.12 587,509.16 SIEMENS; 1.5TOPEN 70CM (assets 169436,171642,171650,1 7 1 65 2-1 71 660)-1,188,732.00 5/1/2015 Research Biplane Angiography System Replacement -78,970.28 5!1/2015 SIEMENS; ARTIS ZEE BIPLANE (asset 165045-165046)-1,158,442.00 41st Street Professional Complex -9,831,862.38 May-16 Precision Medicine Initiative 488,054.14 8,095,074.96 2Q16 Motoman (Asset 184543)1,515,337.00 4,031,557.00 2Q16 Autogen (Assets 175437-175447)30,216.30 2,023,074.27 2Q16 Hamilton Star (Assets 171685, 172326)-440,763.20 2Q16 Hamilton Bios Freezer (Asset 186447)2,623,525.91 5,127,252.84 2Q16 PerkinElmer Spectrophotometer (Asset 169459)-39,920.00 3Q16 Hamilton Robotic Upgrades -45,951.00 3Q16 Hamilton Star (Asset 17909D)235,653.10 235,653.10 4Q16 Hamilton Tube Handler - REQ# 2027700 -34,358.20 1Q17 Hamilton Capper/Decapper Motoman Line (Asset 183593)77,010.00 77,010.00 2Q17 Hamilton Star EasyBlood Liquid Handler (Assets 181647-181649)776,489.90 776,489.90 3Q16 Verso M2 - (Asset 179334)388,646.46 729,256.34 4Q16 Hamilton EasyBlood Units (Assets 176522-176524)721,818.90 721,818.90 1Q17 Hamilton Bios PMI #3 (PO 20028966)4,030,363.09 4,030,363.09 1Q18 Hamilton Freezer Bios HL20 (P020031301)2,509,226.94 2,509,226.94 11/1/2015 Mary Brigh East Operating Rooms (336.00)727,108.67 8/11/2016 Siemens -Artis Zeeog Card. Thorax (Asset 180570)-1,466,062.00 8/11/2016 GE -Discovery IGS 740 (Asset 179172)-1,363,946.45 12/1/2015 Gonda 14 Radiographic Room DR Conversion E15-3011 RAD~u1CR-G014-R 4,722.12 110,495.22 12/1/2015 Gonda 14-158 Duo DR Replacement, E15-3014 RADau1CR-G014158 -154,034.23 12/1/2015 West Pre/Post Remodel, Mary Brigh Main -2,022,954.79 8/19/2015 Radiology -Charlton 1, VG6 Replacement E15-3003 -138,704.91 8/19/2015 GE; DISCOVERY 670 PRO -948,408.45 9/21/2016 Cardiovascular Diseases Patient Appointment Coordinator 710.74 200,409.53 12/21/2016 Reproductive Endocrinology and Infertility Relocation 707,244.35 2,493,942.02 1 2 /2 112 01 6 Remodel Mary Brigh 6lo increase Medical ICU capacity 453,973.85 1,917,682.51 12/31/2016 Mayo Building— Substation MA-E-S Replacement 545,747.80 582,866.28 5/25/2016 Pharmacokinetics Core Relocation -469,019,61 6/14/2D17 Remodel Baldwin 1 for ISP / Baldwin t EnUy Vestibule Replacement 3,041,208.27 3,677,863.92 3/15/2017 Mycology/TB Expansion Hilton 8 2,218,729.94 2,628,96720 3/15/2017 CMILINIL Relocation and Expansion, HiRon 7 188,109.64 1,511,215.84 9/6/2017 Human Cellular Therapy N2 Tank Storage Facilely 419,210.80 491,016.90 9/6/2017 Conversion of OR 609 from Hybrid OR to Coventional OR 416,176:81 496,613.67 9/6/2017 Gonda 2 Decontamination Space Remodeling 258,916.14 285,31521 9/30/2017 Eisenberg AHU S-55 Replacement to Support REI Practice Relocation 582,947.47 666,074.58 2/2/2017 41stStreet.679,428.50 4,892,701.70 8/70/2016 Guggenheim 15-02 integration of core facility and laboratory program\57,416.80 368,357.62 3/8/2017 Aging Center Space Remodel, Guggenheim 7 104,454.88 551,139.89 6/22/2016 Stabile 11 Lab construction-Revzin 1,830.64 314,372.07 12/7/2016 Installation of Open MRI System, Opus 1 258,014.65 507,975.26 1/11/2017 Lab renovation ST 11, CRM recruit, Dr. Quinn Peterson 20,931.13 121,165.35 10/5@016 Saint Marys Campus Complex Intervention Unit 36,743.29 2198,828.39 1/4/2017 E16-3005 MR MCR-6031.5 MR Scanner #1 52,76823 1,275,996.14 1 1/10/2016 Siemens-MAGNETOMAera (Asset 182886; 1 82863-1 82 881)-1,688,565.00 3/30/2017 RMC S-8 AHU Replacement 441,711.11 598,664.56 12(//2016 SMOP/Radiology Desk 2,873,309.80 3,197,500.73 5/25/2016 Mary Brigh Main SMC Radiology Hybrid Procedural Suite - MR Suite 379,533.58 1,710,562.47 5/5/2016 Philips - Ingenia 1.5T Omega HP RS Q1 (Asset 183632; 183685-183897)-1,474,847.D9 10/1/2018 SMH Bulk Medical Gas Systems Replacement 145,986.28 145,986.28 10/1/2016 Mary Brigh Main WestEnlrance Upgrades 76,388.82 76,388.82 7/24/2018 Neurology EEG1Epilepsy Remodel - DO 2 & JO 2 168,016.79 168,016.79 36 Permitted Expenditures from July 1, 2013 to December 31, 2018 Total Expeditures Total Spent as of Approval Date Project/Equipment Name reported for 2018 December 31st 2018 Original project budget approval on 12/9/15: Gugg 13 Remodel -consolidates activities 6/13/2018 within BMB and provide additional flex space 6/13/18 -approved additional $25,000 funding 484,303.51 484,303.51 1 112 8/2 01 8 Plummer Library Renovations Phase 3&4 109,777.06 109,777.06 8/27/2018 E17-3007 DE-MCR-CT-MBM-I~u1P Hybrid Suite Phase 2 222,814.83 222,814.83 5/3/2018 Philips Healthcare -- 2/22/2018 Office of Irdormation Securely Consolidation 673,227.06 673,227.06 6/30/2018 Brackenridge Education Room Build out 505,522.17 505,522.17 1 1/6/2018 Budget Increase - USP 600 Haszardous Drug Handling Remodel 499,899.97 499,899.97 7/1/2018 SMC Chilled Water Distribution Looms Budget Increase 111,297.18 111,297.18 10/1/2018 Joseph Bldg Scope A Centralized Infrastructure 834,338.49 834,338.49 3/1/2018 RMC S-5 Air Handling Unit Replacement 205,284.23 205,284.23 3/14/2018 Tissue Typing Lab Pre-DNA Extraction Contamination Control 346,947.17 346,947.17 5/24/2017 Retrofdling Med Sci 5 large animal facility; DCM Phase I 117,687.01 117,887.01 2/22/2018 ConsolidatioNRelocation of Revenue CyGe 1,410,983.35 1,410,983.35 6/13/2018 Gonda 15 Conversation of Family Waiting Room to Pre/Post Space 86,031.55 86,031.55 6/27/2018 GU 5-Chakraborty lab construction, remodel west bay of GU 5 (including Bram lab)31,554.24 31,554.24 3/14/2018 SMC OR 604,608, and 600 Decontamination Room Remodel, MB 1 1,065,165.59 1,065,165.59 3/14/2018 E-1&3009 NM-MCR-CHI-R-PETlCT DRX2 95,726.10 95,726.10 6/13/201 B SC18-3002 RAD-MCR-MAE4-I-Thoracic Reading Rooms 53,60024 53,600.24 7/1/2018 Medical Sciences 3 (Dr. A. Pandey and Proteomics Core)205,876.63 205,876.63 10/1/2018 Pandey Biosafety Hoods—REQiF-R2050798 (PO 20033617)-- 10/1/201 B Pandey BIOGNOSYS License—REQ#-X22050806 (PO 20033762)-- 10/1/2018 Pandey QPCR—REQ#—R2050679 (PO 20033615)-- 10/1/2018 Pandey Fusion Lumos_2018—REG1#—R2050567 (PO 20033606)-- 10/1/2018 PandeyLabFisherCapdall—REQ#—R2049967(P020033266)5,112.60 5,112.60 10/1/2018 PandeyVWRshaker—REQ#—R2050783(P020033611)-- 10/1/2018 Pandey Nikon scope—REQ#—R2050789 (PO 20033602)-- 6l19/2018 CDI Expansion -Budget Increase -- 2/1/2018 Centralized Distribution of Utilities 41st Street 3,319,851.36 3,319,851.36 1 2/31/2016 HiRon Substation Replacement 1,658,195.91 1,658,195.91 1 1/15/2017 E17-3006 CT-MCR-G03-R-3V Scanner 59,816.30 59,616.30 1 1/15/2017 Siemens Somation Force (Asset 185457)1,930,400.00 1,930,400.00 3/15/2017 Psychiatry &Psychology Master Plan Phase II 1,476,395.01 1,478,395.01 3/16/2017 Upgrade of Medium Voltage Switch Center 676,228.05 676,228.05 6/14/2017 Mary Brigh Kitchen Replacement Easl Tower Ground Level 1,64fi3OD9.58 1,646,009.58 3/15/2017 E16-3010MCR-DT-I-IncremeMalDowMownCT Scanner#1 1,372,715.08 1,372,715.08 3/15/2017 Siemens; Somatom Force CT (Asset 186881)2,084,921.00 2,0&4,921.00 6/14/2017 E16-3009 RAD-MCR-G014 Radiographic Room DR Conversion 297,421.83 297,421.83 6/14/2017 Paitenl Lifts for Mary Brigh PCU 5C 8 SF 829,660.46 829,680.46 916/2017 Mary Brigh Shell Space Fit-Up (NICU & PICU 260,515.54 260,515.54 3/1512017 Antibody/Protein Immunology & Cinical Immunoassay Lab Relocation 3,528,670.37 3,528,670.37 1 1/15/2017 Saint Marys~ialysisUnd 208,166.23 208,166.23 1 1/15/2017 E17~005 MR-MCRadBM-R-MR29 Replacement 774,913.64 774,913.64 1 1/15/2017 GE; Signa Artist 1.ST (Assets 188037-188049)990,208.00 990,208.00 1 1/15/2017 Enhanced Critical Care 6cpansion 171,586.57 171,586.57 10/26/2016 Relocation of Dr. Rajiv Kumar's Laboratory to GU 6, Drs. J. Grande and V. Lowe, and C-SiG 259,076.46 259,076.46 1 1/8/2017 Gonda 19 space remodel 266,907.72 266,907.72 1 2/31/2017 SMC Mary Brigh Surgical Services AHU Replacement 1,315,937.43 1,315,937.43 1Q17 Mary Brigh 3rd Floor OR Rooms Fit Out 6,475,711.52 6,475,711.52 2Q17 Discovery Square 576,743.77 576,743.77 1 Q17 SMC Modernization and Growth 52,749,479.02 52,749,479.02 452,015,853.42 37 D D C7 Z m z w 38 Certification of Expenditures Destination Medical Center For Calendar Year 2018 D ue to Commissioner of Employment and Economic Development (DEED) by April 1 REVISED AS OF MAY 6, 2019 The Medical Business Entity and the Destination Medical Center Corporation (DMCC) Board of Directors (assisted by the City of Rochester) hereby submits to the Department of Employment and Economic Development (DEED) the following report for expenditures that relate to the Destination Medical Center (DMC) Development for the calendar year 2018, and the certifications required to support the documentation under the City of Rochester Commissioner of Employment and Economic Development State Infrastructure Aid Agreement. Expenditures Reported this Year Total Expenditures Reported This Year by Medical Business Entityl $ 126,492,416.01 Total Expenditures Reported This Year for other Private Entitiesl'Z $135,509,210.36 TOTAL Expenditures This Year $262,001,626.37 All Expenditures claimed since June 30, 2013 Previous Years Expenditures (cumuiati~e)$ 428,662,787.00 TOTAL Expenditures This Year3 (from soX 3~$262,001,626.37 A ll Claimed Expenditures as of 12/31/18 (Box 4 plus Box 5)$690,664,413.37 Qualified Expenditures claimed in 2018 (Box 6 minus $200,000,000)$490,664,413.37 State Aid Qualified for this Year (local government match also required) General State Infrastructure Aid Qualified for (sox ~ multiplied by.oz~s) $ 13,493,271.36 Stat2 TI'eflSlt Aid Quellfi2Cl fOt' (Box 7 multiplied by .0075 and then multiplied by .6) $ 2,207,989.86 By providing my signature below, I am hereby certifying that, to the best of my knowledge, the information stated herein is accurate, true and complies with the provisions of Statute 467.47 of the State of Minnesota and the approved methodology as outlined in the City of Rochester Commissioner of Employment and Economic Development State I nfrastructure Aid Agreement. For Expenditures By the Medical Business Entity: M ayo Clinic Chief Financial Officer ate r all other Ex enditures: —.. /"~ ~/~D /20/ Destination edical Center orporation Date res need to be after June 30, 2013 Private Entities' certification of expenses may be certified retroactively in 2014 after the Destination Medical Center District and Development Plan are adopted. 3This figure is based solely upon project building permit costs. Minn. Stat. § 469.47, subd 1(d) permits additional expenditures, and discussion is underway as to how to document such additional expenditures, which may result in adjustments. Form Revised 022719 1137354.XLSX 39 40 41 42 43 EXHIBIT B 44 45 46 47 EXHIBIT C $21,265,000 Rochester, Minnesota General Obligation Tax Increment Revenue Bonds, Series 20178 (Parking Ramp Project} DEBT SERVICE SCHEDULE Date Principal Coupon Interest 02/01/2018 . . . 08/01/2018 . . 540,639.84 02/01/2019 550.000.00 5.000% 381.628,13 08/01/2019 . . 367,878.13 02/0112il20 735.000.00 5.000% 367.878.13 08/01/2020 . . 349.503.13 02/01/2021 775,000.00 5.000% 349,503.13 08/01/2021 . . 330.128.13 02/01/2022 815,000.00 5.000% 330,128.13 08/01/2022 . . 309.753.13 02/01/2023 855,000.00 5.000% 309,753.13 08/01/2023 . . 288,378.13 02/01/2024 895,000.00 5.000% 288,378.13 08/01/2024 . . 266.003.13 02/0.1/Z025 940.000.00 5.000% 266,003.13 08/01/2025 . . 242,503.13 02/01/2026 990.000.00 5;000% 242,503.13 08/01/2026 . . 217,753.13 02/0.1/2027 1 ;035,000.00 5.000% 217,753.13 08/01/2027 . . 191,878.13 02/01/2028 1,090,000.00 2.000% 191,878.13 08101/2028 . . 180,978;13 02/01/2029 1,110,000.00 2.250% 180,978.13 08/01/2029 . . 168,490.63 02/01/2030 1,135.000.00 3.000% 168,490.63 08/01/2030 . . 151,465.63 02101/2031 1,170,000.00 2.750% 151,465.63 08/01/2031 . . 135.378.13 02/01/2032 1,200,000.00 2.750% 135,378:13 08/01/2032 . . 118,878,13 02/01/2033 1,235,000.00 2.875% 118,878.13 08101/2033 . . 101.125.00 02/01/2034 1,270,000.00 2.875% 101,125.00 08/01/2034 . . 82.868:75 02/01/2035 1,305,000.00 3.000% 82.868.75 08/01/2035 . . 63,293.75 02/01/2036 1.345,000.00 3.000% 63.293.75 08/01/2036 . . 43,118.75 02/01/2037 1,385,000.00 3.000% 43.118'75 08/01/2037 . . 22,343.75 02/01/2038 1,430,000.00 3.125% 22,343.75 Total $21,265,000.00 -$8,185,705.47 SIGNIFICANT DATES Dated Date. ......................................... ----.................................................................... , ....................... . OeliVely Date ..................... · ................................................................ - ------..................................... .. Finrt Coupon D<>te ......................................................................... · .............................................. · ... · ........... .. Yield Statistics Bond Year Dollars. .............................................................................................................................. ___ _ Average Life ..... ., ............ ,. ................................................................................................... : ....... · ....................................... .. Average Coupon .. -............. · ...................... · .......................................................................................................................... .. Net Interest Cost (NIC) ........................................................................... ,... ______ _, ...... , ........................... .. True Interest Cost (TIC). .................................................................................... ----� .................................... . Bood Yield for Arbitrage Purposes ....................................... ______ ........................... ___ ................. . All lnl:luslve Cost (AIC), ............................................................................................................ ___ ........................ . IRS Form 8038 Net Interest Cost ........................................................ , ......................................................................................................... .. Weighted Average Maturity.............................................................................................. . .. · ...................... . Springsted Footnotes: 1)Scheduled payments through 2019 have been completed. Post-Sale TotalP+l . 54-0,639.84 931.628.13 367,878.13 1.102,878.13 349,503.13 1.124,503.13 330,128.13 1.145,128..13 309,753.13 1. 164,753.13 288.378.13 1.183,378.13 266,003.13 1,206,003.13 242,503.13 1,232,503.13 217,753.13 1.252,753.13 191,878.13 1.281,878.13 180,978.13 1.290,978.13 168,490.63 1.303;490.63 151,465.63 1,321,465.63 135,378.13 1,335,378, 13 118,878.13 1.353.878.13 101,125.00 1,371,125.00 82,868.75 1,387,868.75 63,293.75 1,408,293.75 43,118.75 1.428.118.75 22,343.75 1,452,343.75 $29,450,705.47 11/16/2017 11/16/2017 8/0112018 $254,390.21 11.963 Years 3.2177754% 2.7176241% Z.6417803% 2.6130470% 2.6889724% 2.6154299% 11.612Years 2)Of the $21,265,000 issued for the parking ramp construction through this Series 2017B, $10 million has been approved by the DMCC board as "local match" dollars. 1), 2) below 48 2019 Business Development Metrics To: DMC Corporation Board From: DMC EDA Staff Date: January 31, 2020 Overview: The 2019 DMC EDA business development strategy resulted in a 5% increase toward the Non-Mayo private investment goal of $2.1 Billion. Overview: DMC EDA has begun documenting out of state capital flow into Rochester. The map below represents the 7 DMC funded projects and the origin of investment. 49 50 Marketing & Communications 2019 Recap DMC Marketing Plan Objectives: 51 Website Analytics DMC marketing efforts have been successful in driving traffic to key pages, primarily the Discovery Square, Investors & Developers, Maps, What Is DMC and Blog pages, as well as increasing average sessions per day. 2019 Sessions: 120.9k (+34.7%) 2019 Pages Views: 202.6K (+18.3%) GEOGRAPHIC REACH (Google Analytics) Description Target Metric Current Metric Geographic reach beyond Rochester 75%+ beyond Rochester Q1 = 81% Q2 = 87% Q3 = 81% Q4 = 79% Geographic reach beyond Minnesota 66%+ beyond Minnesota Q1 = 73% Q2 = 76% Q3 = 67% Q4 = 66% Top cities beyond Rochester in order of visits include Minneapolis, MN, Washington, DC, Chicago, IL, New York, NY, Richmond, VA, Reston, VA, Roanoke, VA, and Saint Paul, MN. Top states beyond Minnesota in order of sessions include Virginia, Illinois, DC, New York, California, Maryland, Texas, Missouri and Florida. Blogs and e-Newsletters (as of 12/31/19) Blogs Published Newsletter Sent Total Subscribers Reached 79 24 77,292 (+3.5%) (avg. 3,221 per newsletter) Open rate is 31.4% over the past twelve months/24 newsletters. (Industry avg. = 21.9%) Click rate is 6.7% over the past twelve months/24 newsletters. (Industry avg. = 2.2%) Social Media In 2019, DMC increased social media posting and presence to communicate progress on projects, events, educational resources and information available on the website with strong increases in followers and engagement over 2018. Facebook Likes Twitter Followers LinkedIn Followers 7,147 4,005 931 52 Popular Posts: Twin Cities Business 100 People to Know Event A Facebook post recognizing DMC EDA executive director Lisa Clarke and Limb Lab co-founder Brandon Sampson of Rochester at an awards ceremony reached 3,225 people and received 261 reactions, comments and shares. Popular Posts: INCubatoredu A LinkedIn post welcoming Rochester Public Schools’ INCubatoredu program to Discovery Square received strong engagement, receiving 2,822 impressions, 90 reactions, and 5 shares. 53 Earned Media From January 1 – December 31, 2019, 2,199 DMC-related stories in the media were tracked. Year-to-date story highlights include: DMCC Board meetings, DMC Annual Meeting, One Discovery Square opening, Hilton Hotel opening, Chateau Theatre opening, DMC Investment numbers, Google, Vyriad, BioSig, Heart of the City, Discovery Walk DMC in the Community 54 WMBE Metrics To: DMC Corporation Board From: DMC EDA Staff Date: January 31, 2020 Overview: The following outlines progress to date as it relates to the Destination Medical Center’s Targeted Business and Workforce participation efforts and prevailing wage compliance. The tables below show that DMC is exceeding our current targets. Based on these performance levels, the DMC EDA Board has requested that DMC EDA staff and City staff bring forward a recommendation for updated goals with a supportive workplan. Targeted Business (WMBE) and Workforce Participation Goals and Results Targeted Business Current City of Rochester DMC Goal Results (2017- November 2019) MnDOT DBE Goal for SE Minnesota Construction 4% 7% 12.23 % Federal Highway Administration (FHWA) Goal 9.12 % Federal Transit Aid (FTA) Goal Professional Services & Construction Administration 4% 5.15% N/A Workforce Participation Current City of Rochester DMC Goal Results (2017- November 2019) MN Dept of Human Rights Workforce Participation Goals for SE Minnesota Construction Minorities 4% 14.6% 15% Construction Women 6% 3.7% 9% Professional Services & Construction Administration Minority 4% 6.4% 15% Professional Services & Construction Administration Women 6% 32.8% 9% 55 56 as of November 30, 2019 DMC SUMMARY TB REPORTING CONSTRUCTION TYPE OF PROJECT PROJECT NAME PROJECT COST ON CONTRACT TB*ON CONTRACT TB %TB Paid To Date* Construction Broadway at Center Hotel 90,000,000$ 3,649,726$ 4.1% Construction Parking Ramp #6 - J2582 32,195,102$ 2,221,593$ 6.9%1,919,048$ Construction Alatus Housing - 2nd Street 98,272,413$ 8,617,577$ 8.8%3,808,082$ Construction Urban on 1st 32,496,456$ 2,302,935$ 7.1%2,155,506$ Construction Discovery Square - Mortenson 20,000,000$ 3,400,000$ 17%3,425,307$ Construction 4th St SW Recon - J7326 5,036,669$ 219,021$ 4.3%193,533$ Renovation 21 1st Street SW - Wells Fargo Building 6,066,035$ 621,801$ 10.25%349,904$ Construction Hotel Indigo 13,084,745$ 938,450$ 7.2%838,957$ Contstruction Civic on First/Hyatt House 32,190,475$ 780,921$ 2.4%74,434$ TOTALS PROJECTS TOTALS 329,341,895$ 22,752,024$ 6.9%12,690,337$ *60% Credit for Qualified Suppliers **Estimated/Currently negotiating and soliciting subs City of Rochester Projects Not in UPNet Renovation Chateau Theatre 1,092,100$ 66,322$ 6%66,677.14$ Infrastructure M16-21 Siphon 6,490,775$ 230,720$ 3.6%79,086.20$ Infrastructure J7319 6th & 7th Avenue 6,666,666$ 441,334$ 6.6%124,693.20$ TOTALS PROJECT TOTALS 14,249,541$ 738,376.54$ 5.1%145,763.34$ TOTALS PROJECT TOTALS 343,591,436$ 23,490,400.45$ 7.0%12,836,099.91$ Contract Goal as Good Faith Effort - 4.00% Public/Private Projects in UPNet 57 DMC SUMMARY WORK FORCE REPORTING CONSTRUCTION Contract Goal as Good Faith Effort Women 6.00% Minorities 4.00% TYPE OF PROJECT PROJECT NAME TOTAL HOURS TO DATE % ACHIEVED TO DATE 160,798 4,062 2.5% 12,139 7.5% 420,133 15,440 3.7% 70,461 16.8% 118,399 2,545 2.1% 16,924 14.3% 94,806 7,461 7.9% 17,472 18.4% 18,049 537 3.0% 478 2.6% 20,599 907 4.4% 2,372 11.5% 58,909 2,478 4.2% 9,466 16.1% 15,982 882 5.5% 816 5.1% 891,694 33,429 3.7% 129,312 14.5% City of Rochester Projects Not in UPNet 5,481 282.5 5.2% 1217.5 22.2% 15,988 371 2.3% 3,146 19.7% 4,953 0 0.0% 142 2.9% 26,423 654 2.5% 4,505 17.1% MINORITY Construction Alatus Housing - 2nd Street WOMEN MINORITY Renovation 21 1st Street SW Wells Fargo Building WOMEN Construction Urban on 1st WOMEN MINORITY Construction 4th St SW Recon - J7326 WOMEN MINORITY Construction Hotel Indigo WOMEN MINORITY Construction Broadway at Center Hotel WOMEN MINORITY Construction Parking Ramp #6 - J2582 WOMEN Public/Private Projects in UPNet MINORITY Construction Discovery Square - Mortenson WOMEN MINORITY MINORITY Infrastructure MINORITY TOTALS PROJECT TOTALS WOMEN TOTALS MINORITY TOTALS Construction Civic on First/Hyatt House WOMEN MINORITY M16-21 Siphon WOMEN Renovation Chateau Theatre WOMEN MINORITY J7319 6th & 7th Avenue WOMEN MINORITY Infrastructure PROJECT TOTALS WOMEN TOTALS 58 918,116 34,082 3.7% 133,817 14.6% WOMEN TOTALS MINORITY TOTALS ALL PROJECT TOTALS 59 DMC SUMMARY WAGE COMPLIANCE CONSTRUCTION TYPE OF PROJECT PROJECT NAME Weekly Payroll Reports Received Wage Interviews Completed Construction 14 Construction 1125 73 Construction 1005 162 Construction 768 92 Construction 901 47 Construction 170 19 Construction 281 66 Construction 472 67 Construction 68 39 TOTALS 4,722 540 City of Rochester Projects Not in UPNet Renovation 64 4 Infrastructure 121 35 Infrastructure 54 24 TOTALS 239 63 TOTALS 4,961 603 DMC SUMMARY BUY AMERICA CONSTRUCTION TYPE OF PROJECT PROJECT NAME Buy America Certs Received Construction 0 Construction 120 Construction 80 Construction 8 Construction 31 Construction 0 Construction 1 Construction 0 Construction 20 TOTALS 240 City of Rochester Projects Not in UPNet Construction None Construction 6 JLJ 12/26/2019 11/25/2019 No additional receipts, per Lynn Carlson. Construction Begins July 22, 2019 4th St SW Recon - J7326 M16-21 Siphon Chateau Theatre Urban on 1st Hotel Indigo PROJECT TOTALS Civic on First/Hyatt House Civic on First/Hyatt House J7319 6th & 7th Avenue PROJECT TOTALS PROJECT TOTALS M16-21 Siphon Parking Ramp #6 - J2582 Urban on 1st Discovery Square - Mortenson Public/Private Projects in UPNet ALATUS Housing - 2nd Street Broadway at Center Hotel J7319 6th & 7th Street 21 1st Street SW Wells Fargo PROJECT TOTALS 4th St SW Recon - J7326 21 1st Street SW Wells Fargo Hotel Indigo Discovery Square - Mortenson Broadway at Center Hotel Parking Ramp #6 - J2582 ALATUS Housing - 2nd Street Public/Private Projects in UPNet Chateau Theatre 60 Heart of the City: Peace Plaza and Chateau Theatre To: DMC Corporation Board From: DMC EDA Staff Date: January 31, 2020 I. Peace Plaza: Update & Next Steps 2020 Construction Bid packages were prepared and put out to market in December 2019. Bid openings were Tuesday, January 21 and Friday, January 24, 2020. Staff are now reviewing all construction bids. Business Forward Construction DMC EDA is leading the development of a “Business Forward” construction approach, designed to minimize negative impact on nearby businesses through improved construction communications, scheduling, and pace. This plan is being developed in collaboration with Heart of the City businesses and community partners. The DMC EDA team is working to quantify the Business Forward strategy expenses, knowing that a deliberate strategy, such as this, could likely result in increased expenses. Key elements of the plan: Accessibility and Safety: Construction activities are being designed to maximize public access to all businesses during the construction period while ensuring public safety. This includes high quality signage, above-standard temporary walkways, enhanced lighting, and well thought out construction scheduling. Communications: A set of communication practices are being established that ensure close contact between the construction team and neighboring properties. This includes an email platform, website, and regular face to face meetings. Activation and Programming: Beyond minimizing the negative impact of construction, we are developing programming ideas that may in fact attract people to the area. Such ideas include construction zone tours and education, kids activities, and special events during project milestones. II. Chateau Theatre Chateau Theatre is managed by Twin Cities-based Exhibits Development Group (EDG). EDG launched its first exhibit in November 2019, THE MAGICAL HISTORY TOUR | A BEATLES MEMORABILIA EXHIBITION. In January, DMC sponsored “Chateau on Us” community days. These events offered DMC an opportunity to engage with and market to approximately 3,000 Chateau Theatre visitors and encourage downtown visitation and experiences to achieve DMC work- and development-plan goals. EDG will be providing quarterly economic impact updates and is developing relationships with many community, cultural, health, and education partners to sustain this early momentum and establish programming and events. 61 Transportation To: DMC Corporation Board From: DMC EDA Staff Date: January 31, 2020 Update & Next Steps: I. Mobility Hubs and Transit Circulator The DMC Corp. board and Rochester City Council approved the Locally Preferred Alternative (LPA) for the transit circulator. This includes a route connecting a future transit village at Cascade Lake to a future transit village at Olmsted County-owned property on U.S. Highway 14 via Second Street SW and South Broadway. Staff has begun the engineering and environmental analyses and formalizing agreements between respective property owners and the City with the intent to submit a Federal Transit Administration grant application by September 4, 2020. In addition to the proposed mobility hubs DMC EDA and the City of Rochester have been identifying additional sites for park and ride concepts. Options will be presented at upcoming DMC meetings. Critical next steps requiring substantial DMC staff and financial resources: · Master site plan for West Mobility Hub, with agreement by Mayo, City, and DMC · Master site plan for East Mobility Hub, with agreement by County, City, and DMC · Engineering and environmental analysis of Circulator Route · Operating and Use agreement between Mayo and City for Circulator · FTA grant submittal, September 4, 2020 II. Micro-Mobility Update The DMC Integrated Transit Studies recommended creating a transportation system that encourages reducing the reliance on single-occupied vehicles from 70% of downtown traffic to less than 50% of downtown traffic by 2035. Over the course of 2019, the City, County, DMC EDA and others collaborated to offer alternative commuting programs in order to provide commuters with other options. Below is a summary of these programs, initial success and next steps. · Carshare Program – Hourcar o December 2019: City of Rochester contracts with Minneapolis-based non-profit Hourcar to provide rented vehicles o Hourcar has located several vehicles throughout downtown Rochester o Low-income rate offered by Hourcar 62 · Bike-Share Program o 2018: City of Rochester secures 200 bicycles o 2019: Mayo Clinic, Olmsted County Public Health, Rochester Public Library, We Bike Rochester, Rochester Parks and Recreation, Experience Rochester and DMC EDA use the bikes to establish a bike share program o From May-November 2019, 1,200+ trips were taken on 40 bikes · Lime Scooter Pilot o August-November 2019: City of Rochester and Lime operated a pilot program to gauge interest and viability of a scooter program. o Results: 50,000+ trips by 13,000 riders totaling 63,000+ miles. o Low-income rate offered by Lime · Autonomous Vehicle Pilot In partnership with Minnesota Department of Transportation and First Transit, the City of Rochester, Mayo Clinic and DMC EDA are working to pilot an autonomous vehicle in downtown Rochester in 2020. The Rochester Automated Shuttle Pilot proposes the operation of a low speed, highly automated shuttle in the urban environment of downtown Rochester. The goal of this project is to: o Safely operate the automated shuttle for 12-months to gather lessons learned for Automated Vehicle (AV) operations in all weather conditions o Promote and educate the public on the benefits of AV technologies o Provide an innovative and enhanced transit service to the citizens of Rochester The proposed vehicle is the EZ10 provided by EasyMile and operated by First Transit; a highly automated (level 4), 12 passenger, low-speed shuttle (12-15mph). This vehicle has no steering wheel or pedals but is monitored by an attendant ready to take over control if necessary. The pilot is slated to start in spring 2020 and run a downtown loop between Center Street and 6th Street SW. III. Parking and Transportation Management Association (TMA) A Transit Management Association (TMA) was established in 2018 to develop and support programing to assist in the mode shift goals identified in the ITS report. In April 2019, this initiative, now branded Arrive Rochester, ran a campaign focused on encouraging people to carpool and recruit new members. Usership almost doubled over the course of the campaign. In May 2019, a biking-focused campaign was held. Other campaigns promoting a variety of mobility types were held throughout the rest of 2019. Currently, the DMC and City are contracting with UrbanTrans, a Portland-based company, to provide management and program development services. This contract will continue through the end of the 1st quarter 2020, after which a long term program management structure will be established. IV. City Loop: Bids for expected 2019 City Loop projects came in 64% over budget/ A request for bids will be re-issued. 63 V. Street Typology: The final portion of the Second Street SW reconstruction (11th-16th Ave.) is being designed, with construction slated for 2021-22. The design concepts may be tested during a demonstration project in the summer of 2020. 64 Destination Medical Center Economic Development Agency DISCOVERY SQUARE TWO Discovery Square Two will be a LEED-certified medical office/lab building with outdoor space, connectivity to One Discovery Square, tenant/public programming, and potential 5G connectivity. Size • 5 Stories: 123,654 g.s.f. (117,000 rentable s.f.) o Floor 1: Office Space, Lobby and link to One Discovery Square o Floors 2-5: Office and Lab Space NNN Rental rates • Rochester Class A office space averages $22 s.f. • Lab space averages $28/s.f. • DS2 Pro forma assumed a tenant mix that generates $24/s.f. Return on cost • Average medical office building capitalization rate in greater Twin Cities area: 7.0% • Expected capitalization rate for DS2: 7.5% • Developer expects equity investors will require 7.5% return due to lack of a signed, credit-worthy tenant Costs • Total development cost: $44,786,278 • Land: $158,550 • Hard costs: $31,482,479 o Design-Build: $27,850,479 (Includes Site Preparation, Design Fees, Core & Shell) o Amenity Space + Link to One Discovery Square: $2,352,000 o Additional Design & Escalation: $1,100,00 o LEED Certification: $180,000 • Development costs: $9,587,478 • Financing costs: $1,426,464 • Development fee: $1,682,611 • Contingency: $448,696 Developer-proposed financing structure • Debt: 55%, $24,632,453 • Cash Equity: 26.5%, $11,863,710 • Financing Gap: 18.5%, $8,290,115 Taxes and jobs • DS2 could support up to 531 permanent jobs • Local property tax revenue increase from $23,758 (2016 assessment year) to $953,907 Tenants • Great potential tenant interest, but absent a building approval it is difficult to “sign on the line” • Mortenson does not yet have an anchor tenant 65 Destination Medical Center Economic Development Agency Joint Funding Application Review • DMC application has been submitted and evaluation team and experts now in review phase • Adding a sensitivity analysis and a construction cost review Project Expectations: • No parking on site • Integrated design with One Discovery Square • Street level relationship with Discovery Walk • Meets sustainable building policy • Mix of traditional office space and wet lab capabilities Support to be Provided: • TBD parking solution that meets Mortenson’s needs and the City’s parking strategy • Assist with tenant recruitment • Gap Financing TBD 66 DMC Development Plan Five-Year Update To: DMC Corporation Board From: DMC EDA Staff Date: January 31, 2020 Update and Next Steps The DMC EDA has conducted a review of the DMC Development Plan and subsequent and complementary plans and interviewed key economic development stakeholders to develop a proposed scope, budget and timeline for the update. TIMELINE · July-August 2019: Review of planning documents · July 25-26 2019: Group interviews with economic development stakeholders (City, County, RAEDI, Mayo Clinic, Downtown Rochester, Rochester Area Builder, Rochester Area Chamber of Commerce) · September 2019: 2020 CIP approval (includes funding for development plan update) · October 2019: DMC Development Plan scope refinement · February 2020: Joint meeting of Rochester City Council and DMCC, DMC EDA, and Olmsted County boards; data gathering and refinement of master project budget · February – May 2020: Plan for revision and Stakeholder input · May 2020: Review of draft development plan · September – November 2020: Approval of development plan ORGANIZATION AND OVERSIGHT The DMC EDA has proposed stakeholder groups for the DMC development plan update: DMC Corp. Executive Committee: Provide oversight and support during plan development. Participants: DMCC Chair R.T. Rybak, Rochester Mayor Kim Norton, Olmsted County Commissioner Jim Bier, DMCC Secretary Paul Williams Administrative Advisory Group: Provide administrative stakeholder counsel. Participants: Mayo Clinic CAO Jeff Bolton, City Administrator Steve Rymer, County Administrator Heidi Welsch, DMC EDA Executive Director Lisa Clarke Technical Group: Provide as-needed subject matter expertise during plan development. Participants: Appropriate City, County, DMC EDA, and City staff 67 68 Discovery Square To: DMCC Board of Directors From: DMC EDA Staff Date: January 31, 2020 Background The DMC Discovery Square (DS) sub-district is a live-work-play environment positioned immediately south of the Heart of the City sub-district. This update focuses on each of these three elements. Living in Discovery Square · Recent activity: o The Residence @ Discovery Square opens soon with residential and retail space. o The Maven has occupied residential units and includes residential and retail space. · Next steps o Assist with creating market awareness of residential and retail opportunities for all Discovery Square properties as appropriate. Playing in Discovery Square · Recent activity: o Prototyping activities took place on future Discovery Walk location prior to the DMC Annual Meeting on Sept 19th. Community input was collected during the prototyping activities and a briefing document summarizing the survey results followed this memo. · Next steps o Launch Design Development for Discovery Walk in 2020, aiming for 2021 construction. Working in Discovery Square · Recent activity: o Supporting and developing various talent and entrepreneurship programming o Hosting several Design Thinking Workshops on regional university campuses this fall as part of the run-up to for the Assistive Tech Challenge 2.0 to be held in 2020. Feedback from participants (the workshops have secured 120+ registrants) has been overwhelmingly positive. o New businesses announced for placement in the sub-district: § RION – Mayo Clinic startup, in One Discovery Square (announced) § BioSig – Partner to Mayo Clinic, in Conley-Maass-Downs building (announced) · Next steps o Launch planning for 2019 Assistive Tech Challenge 2.0 with regional strategic collaborators. o Develop new Discovery Square business community integration programming. o Develop a plan for bridge space into which businesses can move between the openings of One Discovery Square and potential Discovery Square Two. o Consider low cost space for startup companies; the 2020 DMC EDA operating budget includes space funding 69 70 Sustainability Initiatives To: DMCC Corporation Board From: DMC EDA Staff Date: January 31, 2020 Update & Next Steps: Outlined in the DMC Development Plan are several sustainability and resource reduction goals for the DMC project. These high-level goals inform the annual workplan and initiatives that the City of Rochester and DMC EDA collaborate around sustainability. Below are some key updates for several of these initiatives. District Energy System Evaluation – Discovery Walk In collaboration with Mayo Clinic, the DMC EDA is evaluating the possibility of a district energy system (DES) in Discovery Square. This DES is meant to serve new development along or adjacent to Second Ave southwest, the proposed future location of Discovery Walk. The study is being conducted in partnership with Mayo Clinic as the DES could provide benefits to both private development and heating and cooling needs of Mayo’s healthcare facilities. The feasibility study is wrapping up in mid-February 2020. Based on the results, a funding request could follow for DMCC consideration. District Energy System Evaluation – Downtown Government Buildings In collaboration with Olmsted County and the City of Rochester, the DMC EDA is evaluating a second district energy system in the Downtown Waterfront sub-district. Currently, several City and County government facilities are served by the Olmsted County Waste to Energy Facility, a steam-based district energy system. The steam and condensate lines of the system need replacement. As a result, the County, City and the DMC EDA are evaluating a building-based and a district energy option. The feasibility study evaluating these two alternatives through life-cycle cost analysis will run through mid- 2020. Based on the results, a funding request could follow for DMCC consideration. Air Quality Sensor Project In collaboration with Mayo Clinic and the City of Rochester, the DMC EDA is working on installing air quality sensors in the DMC District and throughout the City of Rochester to monitor air quality, specifically the presence and concentration of criteria air pollutants. Sensors were purchased in late 2018, and locations are being selected in collaboration with community partners. Two locations will be in the DMC District in close proximity to two public realm projects, specifically Heart of the City and Discovery Walk. As these public realm projects will greatly increase the number of downtown trees and vegetation, these monitors will help measure the air quality impact of these projects, as well as the impact of other initiatives like the Transportation plan and its focus to increase the use of transit. Pedestrian Metrics Project In partnership with the Rochester Downtown Alliance (RDA), the DMC EDA purchased several people counters in late 2018. These devices are planned to be installed in early 2019 and meant to measure the pedestrian, bike and bus traffic in the downtown core of the City. Two locations of these measurement devices are adjacent to the Heart of the City Public Realm and Discovery Walk Public Realm projects. 71 These devices will help measure the activity in and around these spaces in order to better understand their use and activity level pre and post construction. The DMC EDA partnered with the RDA in order to maximize the use and potential of these devices located in the downtown core of Rochester. Discovery Walk Pilot The DMC EDA has been convening a group of community health stakeholders including the City of Rochester, Olmsted County, Diversity Council, Mayo Clinic, and community members. The purpose of this effort is to bring a focus on health, equality and collaboration, early and throughout the design of public projects, policies and programs. Since 2018, the group has researched other community health initiatives, conducted a community-wide analysis evaluating the existing non-profits and groups focusing on health-related initiatives and used this background to inform a group of guiding principles and a pilot project. This spring, the DMC EDA in collaboration with the stakeholder group above and a wide range of community partners, will pilot a new community engagement strategy for the design of Discovery Walk that is focused on realizing the vision of creating America’s City for Health, by focusing on collaboration and engaging historically underrepresented groups. The Health stakeholder group focus will bring together a team of community co-designers empowered to work with their community networks to inform design goals for the Discovery Walk project focused on the pressing health initiatives identified through the recently published Olmsted County Health Needs Assessment. Results from this engagement process and its impact on the Discovery Walk design will be shared at a future DMCC meeting, likely in the late fall 2020. 72 I am pleased to provide you with the Destination Medical Center Economic Development Agency December 2019 Monthly Report. This monthly report highlights projects and activities within the DMC District, economic development, finances, sustainability, experience, marketing & communications, and community engagement. -Lisa Clarke, Executive Director December 2019 DMC Community Day at Chateau Theatre December 30, 2019 73 '0&'HYHORSPHQW3URMHFWVLQWKH'LVWULFW 174 '0&'HYHORSPHQW3URMHFW0DS 275 Finance Economic Development •Continuing to explore opportunities for various tax credit programs and funding models for use in the DMC district. Sustainability December 2019 Updates 3 •Titan Hilton Hotel- Was completed spring 2019. Two restaurants and hotel opened in April 2019. •Berkman Apartments- Anticipated completion early summer 2020. •The Maven on Broadway - Completed summer 2019. •One Discovery Square- Completed summer 2019. •Wells Fargo Renovation- Anticipated completion 2020. •Hotel Indigo- Anticipated completion 2020. •Hyatt House- Construction began April, 2019. •Chateau Theatre construction and installation of exhibits have been completed. City Council selected EDG to manage the building use for the next 3-5 years. A successful Grand Opening was held on November 23, 2019. DMC has partnered with EDG to host four community days in December and January. •The Transportation Locally Preferred Alternative (LPA) for the circulator was approved by the DMC Corp and City Council. This includes: Route, connecting a future transit village at Mayo Clinic-owed property near Cascade Lake to a future transit village at Olmsted County-owned property. Mode, consisting of high amenity rapid transit (electric bus vehicles). Staff will now begin the engineering and environmental analyses and formalize agreements with property owners with the intent to submit a Federal Transit Administration grant application by September 4, 2020. •Heart of the City public realm approval of 2020 CIP by DMC EDA, City Council, and DMC Corp supports construction implementation in 2020-2021. Next steps include submitting for construction bids and completing a "Business Forward" strategy to help support businesses adjacent to the future construction. •Discovery Walk public realm design will continue using the Heart of the City concepts south to Soldiers Field. The schematic design was completed and next steps include, which are part of the 2020 CIP: integrating the project with design of 4th Street reconstruction; developing interim activation strategies to test design concepts; projecting catalytic impact on future development. Design elements were explored and public feedback was collected on September 19th at the Discovery Walk Experience. DMC funded project updates: •Energy Integration Committee (EIC) –The EIC continues to work on the projects identified in the Strategic Project Plan including the Voluntary benchmarking program, an electric vehicle fleet analysis with partners, a large-scale solar installation and two district energy studies. The progress towards these efforts will be shared at a future 2020 board meeting. •Voluntary Energy Benchmarking – The DMC and City of Rochester launched the Voluntary Energy Benchmarking Program in February 2019. There are currently 20 businesses participated and close to 100 buildings are in the program comprising over 14 million square feet of space in Rochester. The DMC and City are in the process of reviewing the data and will publish a report early 2020 on the inaugural program. •Sustainability Series – DMC continues its monthly Sustainability Series. DMC hosted a presentation by the Citizens Utility Board who spoke to the trends for residential electrification and electric utility changes that would benefit homeowners. Approximately 20 people attended the presentation in December.76 Traffic to DMC.MN: •December traffic showed 8.3K visits and 13.2K pageviews. •Discovery Square, Home page, Investors & Developers, maps and what is DMC? were the top pages visited. •Top 5 states: Minnesota, Missouri, District of Columbia, Virginia, Illinois. •Top 5 cities outside of Rochester: Washington, Minneapolis, St. Joseph, Kansas City, Chicago. Social Media: Marketing & Communications •Attended the following events: Healthcare 2020: Emerging Business Models; Engineering CEO's of MN; Journey to Growth; Walleye Tank; Chamber Economic Summit: 2020 Forecast. •Provided DMC updates to the following groups: Leadership Greater Rochester (LGR); Glenda Mueller Grad Students; International Day of Persons with Disabilities. •Hosted a Discovery Square Design Thinking Workshop at the Rochester INCubatoredu. •Partnered with EDG to host four DMC Community Days in the newly opened Chateau Theatre. (estimated 1,800 attendees). •Supported International Day of Persons with Disabilities and FEAST- A Local Food Network. • • The “When in Rochester MN” app went live in early October 2019. Approximately 8,000 app downloads have occurred since the launch. Three focus groups have been completed so far (2 with Mayo Clinic patients and 1 at the FEAST food convention). One additional focus group and several community listening sessions are planned for January and February 2020. •A new search function is being finalized and will roll-out in Q1 of 2020 after user feedback was collected. Community Engagement Experience 4 Newsletter: December 2019 Updates •Two newsletters were delivered to 3,300 subscribers. The average open rate was 30.2% (industry average: 21.8%) and the average click rate was 4.95% (industry average: 2.2%). DMC Marketing Campaign: •December Paid Search (Google and Bing): o 29,286 impressions; 72 clicks and average click through rate of 2.53% (benchmark is 1.31%) •Highest engaged regions: California, Maryland, Ohio, Massachusetts, New York. •Top lead generating regions: Greater New York City area, Greater Chicago area, Phoenix area, Greater Minneapolis – St. Paul area, San Francisco Bay area. •Social media growth continued in December with gains on Facebook (+9), Twitter (+10) and LinkedIn (+49). Blog: •Five blogs were published in December. Media News Stories: •In December 78 DMC-related stories were published in the media and 323 social media mentions. Highlights: •Destination Medical Center initiative dominates a decade •Minnesota Briefs: Pam Wheelock to join Destination Medical Center •Free Mondays at Chateau •HourCar launches in Rochester 77 78 TO: Jim Bier, Treasurer Kathleen Lamb, Attorney FR: Dale Martinson, Assistant Treasurer Date: January 29, 2019 RE: December 2019 DMCC Budget Summary The attached unaudited financial summary of activity through December of 2019 reflects total year‐to‐date DMCC operating expenditures of $2,632,337 of the approved 2019 budget plus carryover encumbrances totaling $3,028,852. The remaining amount unspent represents 13% of the available budget, however there are additional payment requests occurring in January and February that will be attributable to 2019 work and accounted for as such in the final audit. The second page of this summary provides a listing of DMCC authorized projects managed by the City of Rochester. Nearly $7.5 has been spent on these projects so far in 2019. Total life‐to‐ date expenditures on these projects is approaching $39.7 million. Please feel free to contact me with any questions or concerns. 79 Destination Medical Center Corporation Financial Budget Summary December 2019 (unaudited) 2019 Approved Curent Month December 2019 Amount Percent Approved Budget December 2019 Year To Date Remaining Remaining General Administrative Expenses 41,200 169 34,383 6,817 17% Professional Services 265,000 15,382 157,150 107,850 41% Insurance and Bonds 20,000 324 24,481 (4,481) ‐22% City Support Expenses ‐ ‐ ‐ Subtotal DMCC 326,200 15,875 216,014 110,186 34% Third Party Costs ‐ DMC EDA ** Payroll, Staff, Administration & Benefits‐EDA 902,613 68,232 721,360 181,253 20% Operating Expenses 28,760 15,959 243,126 (214,366) ‐745% Operational Costs ‐ Contracted 46,580 21,706 55,507 (8,927) ‐19% Economic Development Outreach & Support 860,789 195,959 568,575 292,214 34% Professional Services 680,164 45,472 656,263 23,901 4% Miscellaneous Expenses 52,500 ‐ 45,862 6,638 13% Subtotal EDA 2,571,406 347,327 2,290,693 280,713 11% Total DMCC 2018 2,897,606 363,203 2,506,707 390,899 13% 2018 Budget Carryover ‐ Encumbered Funds for EDA Contracts 131,246 ‐ 125,630 5,616 4% Totals for 2019 Including Encumbrance 3,028,852 363,203 2,632,337 396,515 13% NOTE: A payment request for $129,788.57 was submitted in January 2020 for December 2019 activ DMCC Working Capital Note 1,000 EDA Working Capital Note 50,000 80 DMCC Projects Managed by the City of Rochester As of December 31, 2019 Project YTD Expenditures Project Budget Life To Date Expenditures 8611C- - Sn/S12AvSW/NW<2StSW>2StNW 111,570 2,850,000 526,847 8612C- - WZmbrRvrSn/SRlfLin<CookPk>CCDr 950,000 46,592 8613C- - ChateauTheatrePre-OccupancyM&O 93,117 4,726,802 364,797 8614C- - DMCTransit&InfrastrctrPgrmMgmt 142,667 2,600,000 1,812,179 8617C- - Broadway @ Center Parking Ramp 10,500,000 10,500,000 8618C- - SharedParkngStudy&PrgmDevlpmnt 170,972 2,061,854 1,825,237 8620C- - City Loop Plan 1,209,938 968,732 8621C- - Transit Circulator Study 7,605 2,241,532 1,780,877 8623C- - DMCC Street Use Study 3,117,708 2,885,882 8624C- - ChateauTheatreBldgImprov/Purch 1,376,436 8,228,985 8625C- - Heart of the City 1,387,659 2,648,940 2,205,789 8626C- - Sn/SUpsize1Av&3AvSE<4StS>1StN 3,669,841 5,000,000 5,530,907 8326 C - Reconst4thStSW<1stAve>6thAveSW 2,250,000 8627C- - Property & ROW Acquisition 8628C- - Downtown Circulator Project 269,712 269,712 8702C- - RPTSolarPwrdBusFleetGrntApp 51,333 8703C- - FTA TOD Pilot PrgmGrntApplctn 26,058 8704C- - FTA Low-NoEmissions PrgGrntApl 1,140 8705C- - TransitCrcltr-FTAGrntBus&Faclt 19,258 8804C- - TH 52 LID Bld GrantApplication 22,145 8901C- - TH 14/52 InterchangeBldGrntApp 36,331 8902C- - FestivalAreaStdy&ConceptDesign 59,099 84,133 8903C- - DedctdBikeLns-3rd/4thAve&CtrSt 206,873 232,946 Grand Total 7,495,549 37,906,774 39,669,880 * Notes: Broadway @ Center Parking Ramp Maximum DMCC Local Share Credit = $10,500,000 4th Street Reconstruction DMCC Support set at $2,250,000 81