HomeMy WebLinkAbout3/10/2022 DMCC Executive Committee Meeting - Agenda and Meeting PacketDestination Medical Center Corporation
Board of Directors
Executive Committee Meeting
Thursday, March 10, 2022
8930 A.M.
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DESTINATION MEDICAL CENTER CORPORATION (DMCC)
EXECUTIVE COMMITTEE MEETING
Thursday, March 10, 2022
9:30 A.M.
Remote Viewing: https://video.ibm.com/channel/destination-medical-center
AGENDA
PAGE
I. Call to Order
II. Roll Call
III. Approval of Agenda 1
IV. Approval of Minutes: March 26, 2020` 3
V. April 1, 2022 Report to DEED 5
(Presenters: Patrick Seeb, EDA; Doug Holtan, Mayo Clinic; Cindy Steinhauser,
City of Rochester)
Resolution A: Authorizing and Approving the April 1, 2022 Report to DEED
Pursuant to Statute
VI. Adjourn
*PLEASE NOTE: The Mayo Civic Center requires face coverings.
https://www.mayociviccenter.com
1394323-4.DOCX
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DESTINATION MEDICAL CENTER CORPORATION
EXECUTIVE COMMITTEE
March 26, 2020
9:30 A.M.
MINUTES
I. Call to Order. Chair R.T. Rybak called the meeting to order at 9:43 a.m.
II. Roll Call. Chair R.T. Rybak, Mayor Kim Norton, Paul Williams, and Commissioner
Jim Bier were present. Jim Campbell and Michael Dougherty also attended the
meeting.
III. Approval of Minutes: March 21, 2019. Mayor Norton moved approval of the Minutes.
Commissioner Bier seconded.
Ayes: Commissioner Bier, Mayor Norton, Chair Rybak, Mr. Williams.
Nays: None.
IV. Coronavirus Pandemic: Discussion. Chair Rybak invited Mayor Norton and
Commissioner Bier to provide updates on the City of Rochester and Olmsted County
responses to the growing COVID-19 pandemic and resulting economic impact.
Chair Rybak asked if DMC should take on a role in ensuring the resilience of the
local workforce. Mayor Norton replied that, while businesses have expressed
concern about downtown construction further impacting business operations, it will
be important to continue employing members of the construction trades during this
time. Mr. Williams noted that the economic dislocation experienced by employees in
the retail and hospitality industries is likely to be profound and that DMC will need
data and analysis to understand the scope and scale of the pandemic’s economic
impacts.
Lisa Clarke, EDA Executive Director, Patrick Seeb, EDA Director of Economic
Development and Placemaking, and Aaron Parrish, City of Rochester Deputy
Administrator, continued the presentation. They discussed three areas in which
DMC could support local economic activity: accelerating job creation; executing
long-term strategies, including key partnerships with private investors and
developers; and creating an innovative economic recovery and resiliency program.
V. April 1 Report to DEED. Ms. Clarke noted that while 2020 may prove to be a trying
year for investment and development efforts, 2019 was a record year, with more
than $272 million in annual private investment. This total brings cumulative DMC
investment to nearly $963 million. Non-Mayo-Clinic private investment totals $133
3
million and includes the Maven and Berkman housing developments, downtown
retail, renovations, and other projects. Terry Spaeth, City of Rochester Assistant
Administrator, described the process for accounting for private investment, and Ms.
Clarke described various Mayo Clinic investments and DMC’s community benefits.
Resolution No. EC-6-2020: Authorizing April 1 Report to DEED Pursuant to Statute.
Mr. Williams moved approval of Resolution EC-6-2020. Commissioner Bier
seconded.
Ayes: Commissioner Bier, Mayor Norton, Chair Rybak, Mr. Williams.
Nays: None.
VI. EDA: Five Year Development Plan Update. Chair Rybak described the continuous
efforts to refine DMC planning and respond to evolving marketing conditions. Mr.
Seeb noted that the state DMC statute requires an update to the plan every five
years, which will incorporate much of the ongoing planning into a formal document.
Chair Rybak expressed a desire, which was shared by the other committee
members, to move prudently and not rush to produce an update in the midst of the
pandemic and economic crisis.
VII. Other.
VIII. Adjournment. Mayor Norton moved to adjourn. Commissioner Bier seconded.
Ayes: Commissioner Bier, Mayor Norton, Chair Rybak, Mr. Williams.
Nays: None.
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Destination Medical Center
Economic Development Agency
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DESTINATION MEDICAL CENTER
APRIL 1 REPORT TO DEED
TABLE OF CONTENTS
Page 6: Summary Memo from DMC EDA
Page 7: Resolution authorizing the DMCC Chair or Vice Chair to submit the report
Page 9: Certification of Expenditures form
Page 11: Summary sheet of 2021 Non-Mayo-Clinic private investment
Page 12: Construction permits closed in 2021
Page 13: Letter from Mayo Clinic to DEED
Destination Medical Center
Economic Development Agency
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MEMO
TO: Destination Medical Center Corporation
FROM: Destination Medical Center Economic Development Agency
RE: 2021 DMC PRIVATE INVESTMENT
By April 1 of each year, the DMC Corporation and Mayo Clinic must report DMC private
investment to the State of Minnesota Department of Employment and Economic Development
(DEED). DEED uses this information to affirm the success of the DMC initiative and determine
the required amount of annual State DMC funding. This productive reporting relationship is one
aspect of the unique DMC economic development model. The formal report follows this
summary memo.
New private investment in 2021, comprised of investment by Mayo Clinic and other private
investors, totals $155.3 million:
a. Mayo Clinic private investment: $110.6 million
b. Non-Mayo-Clinic private investment: $44.7 million
2021 private investment exceeded 2020 private investment by approximately $11 million. It is
an encouraging sign that Rochester’s economy, secured by the financial and operational health
of Mayo Clinic, is on a recovery trajectory. Many significant projects, from Mayo Clinic’s Kellen
Building to the Bryk on Broadway affordable housing development to Two Discovery Square,
made significant progress over the course of 2021.
A.
DESTINATION MEDICAL CENTER CORPORATION
EXECUTIVE COMMITTEE
RESOLUTION NO. EC-__-2022
Authorizing April 1, 2022 Report to DEED Pursuant to Statute
BACKGROUND RECITALS
A. Minnesota Statutes, Section 469.47, provides that by April 1 of each year, the
medical business entity (Mayo Clinic) must certify to the Commissioner of the Department of
Employment and Economic Development (“DEED”) the amount of expenditures made by Mayo
Clinic in the preceding year. For expenditures made by an individual or entity other than Mayo
Clinic, the Destination Medical Center Corporation (“DMCC”) must compile the information on
the expenditures and may certify the amount to DEED. The certification to DEED must be in the
form prescribed by DEED and include any documentation and supporting information regarding
the expenditures that DEED requires. By August 1 of each year, DEED must determine the
amount of expenditures for the previous year.
B. Staff from the City of Rochester and the Destination Medical Center Economic
Development Agency (“EDA”) have prepared the draft report, due on April 1, 2022, attached
hereto as Exhibit A.
RESOLUTION
NOW, THEREFORE, BE IT RESOLVED, by the Executive Committee of 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 Department of
Employment and Economic Development as required by Minnesota Statutes, Section 469.47, in
form similar to the form attached hereto as Exhibit A, as may be modified through further
discussions with Mayo Clinic or the City of Rochester, and to take such other actions as are
necessary and appropriate to effectuate the timely submission of the report to DEED.
1199055.DOCX
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EXHIBIT A
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DR
A
F
T
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2
3
4
5
6
7
8
9
For all other Expenditures:
1394132-1.xls
Certification of Expenditure
Destination Medical Center
For Calendar Year 2021
Due to Commissioner of Employment and Economic Development (DEED) by April 1, 2022
The Medical Business Entity and the Destination Medical Center Corporation (DMCC) Board of Directors (assisted by
the City of Rochester) hereby submit 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 2021, and the certifications required to support the documentation under the City of Rochester Commissioner of
Employment and Economic Development State Infrastructure Aid Agreement.
$110,586,916.31
$44,720,906.89
$155,307,823.20
Total Expenditures Reported This Year by Medical Business Entity1
Total Expenditures Reported This Year for other Private Entities1,2
TOTAL Expenditures This Year
Expenditures Reported this Year
All Expenditures claimed since June 30, 2013
State Aid Qualified for This Year (local government match also required)
General State Infrastructure Aid Qualified for (Box 7 multiplied by .0275)$29,210,608.88
$1,106,896,136.12
$155,307,823.20
$1,262,203,959.32
$1,062,203,959.32
Previous Years Expenditures (cumulative)
TOTAL Expenditures This Year3 (from Box 3)
All Claimed Expenditures as of 12/31/21 (Box 4 plus Box 5)
Qualified Expenditures claimed in 2021 (Box 6 minus $200,000,000)
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 Minnesota Statutes Section 467.47 and the approved
methodology as outlined in the City of Rochester Commissioner of Employment and Economic Development State
Infrastructure Aid Agreement.
State Transit Aid Qualified for (Box 7 multiplied by .0075 and then multiplied by .6)
DateMayo Clinic Chief Financial Officer
For Expenditures By the Medical Business Entity:
$4,779,917.82
1Expenditures need to be after June 30, 2013
2Other Private Entities' certification of expenses may be certified retroactively in 2014 after the Destination Medical
Center District and Development Plan are adopted.
Form Revised 02/24/2022
3This figure is based solely upon project building permit costs. Minn. Stat. § 469.47, subd 1(d) permits additional
expenditures, and discussion is underway as to how to document such additional expenditures, which may result in
adjustments.
DateDestination Medical Center Corporation
EXHIBIT A
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Building Permits within the DMC Boundary
(Does not include Mayo Projects)
Completed
Year Projects
2014 38,400$
2018 584,079$
2019 7,585,007$
2020 14,490,740$
2021 598,000$
TOTAL 23,296,226$
2019/2020 Destination Medical Center ‐ Partially Completed Projects Tracking
2019 2020 2021
Project Address Total Building Permit Value Partial Completed Work Completed Work Completed Work
Hyatt House 315 1st Ave. NW 32,253,475.00$ 6,940,448.00$ 24,151,076.04$ 1,161,950.96$
Eleven02 101 11th Ave. SW 29,690,975.00$ 4,159,810.90$ 24,377,346.96$ 1,153,817.14$
61,944,450.00$ 11,100,258.90$ 48,528,423.00$ 2,315,768.10$
2020 Destination Medical Center ‐ Partially Completed Projects Tracking
2020 2021
Project Address
Total Building Permit Value
To Date Partial Completed Work Completed Work
Two Discovery Square 415 2Ave SW 20,161,480.00$ 5,553,179.85$ 14,608,300.15$
2021 Destination Medical Center ‐ Partially Completed Projects Tracking
2021
Project Address
Total Building Permit Value
To Date Partial Completed Work
Brky Apartments 401 N Broadway 25,000,000.00$ 4,500,612.64$
TOTAL 44,720,906.89$
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Commercial Bldg Alteration R14-0094CB 3/14/2014 017965 101 E CENTER ST, ROCHESTER, MN 55904 $38,400 Replaced all old windows, replace some brick
that is bad and fill some holes
A & K Properties Finaled 11/17/2021
Commercial Bldg Alteration R18-0144CB 8/1/2018 017926 21 SW 1 ST, ROCHESTER, MN 55902 $584,079 Interior renovation of existing retail bank
including electrical, plumbing and HVAC.
(Wells Fargo)
Wells Fargo CO 10/13/2021
Commercial Bldg Alteration R19-0364CB 10/17/2019 018102 211 NW 2 ST 1311, ROCHESTER, MN 55901 $75,000 Alteration to an existing dwelling unit.
(Charter House)
CHARTERHOUSE INC - Deborah
Kenitz
Finaled 12/2/2021
Commercial Bldg Alteration R19-0308CB 12/9/2019 048779 624 SW 3 AVE, ROCHESTER, MN 55902 $600,000 Adding an elevator to an existing 60,791 sf
church. (Zumbro Lutheran Church)
ZUMBRO EVANGELICAL
LUTHERAN
CO 1/26/2021
Commercial Bldg Alteration R19-0361CB 12/27/2019 025320 709 SW 1 AVE, ROCHESTER, MN 55902 $47,924 Whirlpool equipment remodel and adding
mechanical room. (Rochester Area Family
YMCA)
YOUNG MEN'S CHRISTIAN
ASSOCIATION
Finaled 12/6/2021
Demolition Commercial R19-0015D 7/3/2019 017784 324 SW 1 AVE, ROCHESTER, MN 55902 $50,000 Demolition of single story art building and
existing parking lot
Ackerberg Group Finaled 12/6/2021
Demolition Commercial R19-0017D 7/25/2019 075680 1101 SW 2 ST, ROCHESTER, MN 55902 $35,000 Demo of Virgil's Building ROCHESTER HOTEL PARTNERS
LLC
Finaled 12//6/2021
Demolition Commercial R19-0021D 9/6/2019 017760 405 SW 1 AVE, ROCHESTER, MN 55902 $40,000 Tear down and remove entire Damsey
restaurant structure
Premier Bank Finaled 12/6/2021
Commercial Bldg Commercial R19‐0211CB 2/27/2020 83133 601 SW 2 ST, ROCHESTER, MN 55902 $5,437,083 Footing, foundation to level to for 6 story
110 unit hotel with 2 levels of underground
parking. (TownePlace Suites by Marriott)
Portland Hotel LLC Finaled 8/13/2021
Commercial Bldg Commercial R19‐0432CB 2/19/2020 81707 19 SW 1 AVE ROCHESTER, MN 55902 $1,300,000 Tenant improvement new restaurant space
within Kahler Hotel. (Olde Brick House)
Ringneck Restaurants Inc CO 11/23/2020
Multi‐Family Bldg Alteration R20‐0020MFB 08/28/20 11576 1111 2 ST SW, ROCHESTER, MN 55902 $30,913 Reinforcement of existing roof structure to
accommodate the increase snow loading due
to the 1102 Hotel built next to it. (Eleven02
Hotel Snow Drift)
Tyler Miles Finaled 12/13/21
Sign Business R20‐0086S 08/25/20 83133 123 6 AVE SW, ROCHESTER, MN 55902 $612,000 Wall signs for Towneplace Suites [lit]
"TOWNEPLACE SUITES BY MARRIOTT"; "Will
& Charlie's Pub
Persona Sign Company Finaled 12/13/21
Commercial Bldg Alteration R20‐0050CB 04/08/20 83795 202 4 ST SW 240, ROCHESTER, MN
55902
$612,468 Build out of second level space for new office
use tenant. (Discovery Square)
Silver Lake Investors CO 06/28/21
Multi‐Family Bldg Alteration R20‐0013MFB 04/20/20 17786 325 1 AVE SW, ROCHESTER, MN 55902 $727,504 Reroofing, tuckpointing, window
replacement, new entry doors, carpet, water
piping, HVAC, lighting and misc. alteration
throughout building. (Newbridge
Apartments)
Tapestry Companies CC 03/01/21
Sign Business R20‐0073S 07/14/20 17784 33 4 ST SW, ROCHESTER, MN 55902 $23,336 Wall signs for The Hue [lit]ACKY‐324 LLC Finaled 12/13/21
Commercial Bldg New R20‐0053CB 08/05/20 83133 601 2 ST SW, ROCHESTER, MN 55902 $11,660,444 New 6 story 110 guest room hotel with 2
levels of underground parking. (TownePlace
Suites by Marriott)
TPS ROCHESTER I LLC CO 08/13/21
Demolition Demolition R20‐0009D 5/20/20 75694 18 1 Ave SE, Rochester 55904 $824,075 Demolition and removal of existing building
(former Post Bulletin building) on site
PB Rochester Investments LLC Finaled 12/13/21
Commercial Bldg Alteration R21‐0027CB 2/4/2021 14505 44 SE 4 ST, ROCHESTER, MN 55904 20,000.00$
Partial remodel of main level. Adding
conference room, moving office, updating
bathroom. (Schatz Law Firm)Michael Schatz Finaled 8/27/2021
Commercial Bldg Alteration R21‐0031CB 2/10/2021 17894 155 SW 1 AVE, #140, ROCHESTER, MN 55902 80,000.00$
Interior alteration to existing by expanding
kitchen line, adding a new hood and oven.
(Bruegger's Bagel)Fred Leon C of C Issued 4/30/2021
Commercial Bldg Alteration R21‐0156CB 5/24/2021 48779 624 SW 3 AVE, ROCHESTER, MN 55902 75,000.00$
Remodel of approximately 1620 sq.ft. of
existing space into a space for youth.
(Zumbro Lutheran Church)
ZUMBRO EVANGELICAL LUTHERAN ‐
Sara Lichty C of C Issued 12/2/2021
Commercial Bldg Alteration R21‐0167CB 6/4/2021 81808
210 N BROADWAY AVE, #103, ROCHESTER, MN
55906 75,000.00$
Fit‐up of the Suite #103 at the Queen Center
(210 N. Boadway) for "The Fit Loon". SKIATHOS LLC C of C Issued 10/19/2021
Commercial Bldg Alteration R21‐0352CB 10/7/2021 17926 21 SW 1 ST, #102, ROCHESTER, MN 55902 25,000.00$
interior demolition and remodel for Wells
Fargo ROCHESTER PROPERTY OWNER LLC C of C Issued 10/28/2021
Multi‐Family Bldg Alteration R21‐0005MFB 3/2/2021 18102 211 NW 2 ST, #816, ROCHESTER, MN 55901 125,000.00$ Remodel of apartment #816. (Charter House)
CHARTERHOUSE INC ‐ Deborah
Kenitz Finaled 9/8/2021
Multi‐Family Bldg Alteration R21‐0021MFB 5/13/2021 82547 600 SW 4 ST, UNIT 501, ROCHESTER, MN 55902 125,000.00$ Kitchen and bathrooms remodel
HIGH POINT COMPANY
ASSOCIATION Finaled 10/19/2021
Multi‐Family Bldg Alteration R21‐0037MFB 7/27/2021 81810 207 SW 5 AVE, APT 608, ROCHESTER, MN 55902 38,000.00$ Kitchen Remodel Cindy Boese Finaled 12/15/2021
Multi‐Family Bldg Alteration R21‐0048MFB 9/3/2021 82547 600 SW 4 ST, UNIT 507, ROCHESTER, MN 55902 35,000.00$
Kitchen remodel, master and guest bathroom
remodel, Laundry Room
HIGH POINT COMPANY
ASSOCIATION Finaled 12/17/2021
$23,296,226
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200 First Street SW Rochester, Minnesota 55905
507-284-2511
March 3, 2022
Steve Grove
Commissioner
Minnesota Department of Employment and Economic Development
1st National Bank Building
332 Minnesota Street, Suite E-200
Saint Paul, MN, 55101-1351
Dear Commissioner Grove:
Attached with this letter is Mayo Clinic’s certification of qualified expenditures of the medical business entity for
the Destination Medical Center (DMC) initiative from January 1, 2021, to December 31, 2021. The amount of
qualified investment is approximately $110.6 million. Major projects included the continued modernization of
Mayo Clinic Hospital, Saint Marys Campus; many improvements to Mayo Clinic’s downtown Rochester,
Minnesota, campus; and investment in DMC’s Discovery Square life science sub-district.
As in prior years, Mayo Clinic is taking a conservative approach when counting DMC-eligible capital
expenditures. Overall, we spent more than $340 million on capital projects and equipment in Rochester in 2021
including improving our medical tissues archive and purchasing world-class medical equipment. In total, we plan
to invest more than $1 billion in Rochester facilities and equipment between now and 2025. Through 2021, our
DMC investment totals more than $762 million.
Looking back on 2021, I am grateful for our hard-working staff—in Minnesota and across the globe—who have
put the needs of the patient first and sustained Mayo Clinic as a beacon of hope and healing. Last year, our
dedicated Mayo Clinic team served more than 1.4 million patients, administered more than 1.1 million COVID-
19 tests, and expended more than $1 billion on research activities. Mayo Clinic also committed to investing in
our people and our communities, including a guaranteed 4% minimum salary increase for eligible allied health
staff in 2022 and community investments in Rochester totaling more than $8.5 million including significant
contributions to the Coalition for Rochester Area Housing, the Southeast Regional Crisis Center, and COVID-19
outreach and education.
Together, these commitments to our patients, our people, and the places where we live and work demonstrate
Mayo Clinic’s continued efforts to sustain and grow Rochester as a global destination medical center. We remain
committed to achieving the long-term DMC development and investment goals and, despite COVID-19, we
remain on a strong path. We look forward to continuing our DMC partnership with the city of Rochester,
Olmsted County, and state of Minnesota.
Thank you.
Sincerely,
Christina Zorn, J.D.
Chief Administrative Officer
Mayo Clinic
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