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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. 1 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 2 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. 1393333-2.DOCX 4 Destination Medical Center Economic Development Agency 5 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 6 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 7 EXHIBIT A 8 DR A F T 1 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: $4,779,917.82 1Expenditures need to be after June 30, 2013 2Other Private Entities' certification of expenses may be certified retroactively in 2014 after the Destination Medical Center District and Development Plan are adopted. Form Revised 02/24/2022 3This figure is based solely upon project building permit costs. Minn. Stat. § 469.47, subd 1(d) permits additional expenditures, and discussion is underway as to how to document such additional expenditures, which may result in adjustments. DateDestination Medical Center Corporation EXHIBIT A 9 10 Building Permits within the DMC Boundary (Does not include Mayo Projects) Completed  Year Projects  2014 38,400$                              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$           11 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 12 200 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 13 14