HomeMy WebLinkAbout2/9/2023 DMCC Board of Directors Meeting - Agenda and Meeting Packet
Destination Medical Center Corporation
Board of Directors Meeting
Thursday, February 9, 2023
9:30 A.M.
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DESTINATION MEDICAL CENTER CORPORATION (DMCC)
SPECIAL BOARD MEETING
Thursday, February 9, 2023
9:30 A.M.
To View the Meeting Remotely: https://us02web.zoom.us/j/85429189790
AGENDA
PAGE
I. Call to Order
II. Roll Call
III. Approval of Agenda 1
IV. Approval of Minutes: November 10, 2022 3
V. Public Comment1
VI. Chair’s Report
VII. Consent Agenda
A. DMCC 2022 Budget: Year to Date Update 7
VIII. Annual Report to the Legislature
Resolution A: Approving February 15, 2023
Report to the Legislature 11
IX. EDA Board President Comments
X. Metrics: Plan Updates
XI. Requests for Action
A. Resolution B: Providing Final Approval for the
Expenditure of Funds from the 2023 CIP Budget
for the Soldiers Field Project 45
1 For public comments, please indicate that you wish to speak either in-person at the meeting,
through the chat feature on the web link, or by emailing info@dmc.mn by 9:00 A.M. on February
3rd. Written comments may also be submitted to info@dmc.mn.
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B. Resolution C: Providing Final Approval for the
Expenditure of Funds from the 2023 CIP Budget for
the Riverfront Redevelopment Project 53
XII. Discussions (City of Rochester, EDA)
A. LINK Bus Rapid Transit and West Transit Village 59
B. Downtown Vibrancy Task Force 61
XIII. EDA Work Plan Implementation
A. Business Development Market Research 63
XIV. Informational Items
A. Business Development and Lead Generation 67
B. Discovery Square 69
C. Heart of the City 71
D. Development Projects in the Pipeline 73
E. DEED Main Street Economic Revitalization
Program Grant 75
F. District Energy 77
G. McKnight Foundation Grants 79
H. Housing 81
I. Equitable Economic Development 83
XV. Meeting Schedule
A. Executive Committee
B. Next Regular Meeting: May 25, 2023 at 9:30 A.M.
XVI. Adjournment
*PLEASE NOTE: Immediately following the DMCC Board meeting, a joint work session is
planned with the DMCC Board, the Rochester City Council, the Olmsted County Board of
Commissioners, and the Destination Medical Center Economic Development Agency Board
of Directors in Suite 102. A quorum of the DMCC Board Members may be present.
Members of the public are welcome to attend.
DESTINATION MEDICAL CENTER CORPORATION (DMCC)
BOARD MEETING
Thursday, November 10, 2022
9:30 A.M.
MINUTES
I. Call to Order. Vice Chair Kim Norton called the meeting to order at 9:30 a.m.
II. Roll Call. James Campbell, Council President Brooke Carlson, Mayor Kim Norton,
R.T. Rybak, Commissioner Mark Thein, and Paul Williams were present. Two
Board Members participated via interactive technology: Mr. Rybak due to family
health concerns and Mr. Campbell due to health concerns.
III. Approval of Agenda. Commissioner Thein moved approval of the agenda. Council
President Carlson seconded the motion. Ayes: Mr. Campbell, Council President
Carlson, Mayor Norton, Mr. Rybak, Commissioner Thein, Mr. Williams. Nays:
None.
IV. Approval of Minutes: September 22, 2022. Mr. Williams moved approval of the
minutes. Council President Carlson seconded the motion. Ayes: Mr. Campbell,
Council President Carlson, Mayor Norton, Mr. Rybak, Commissioner Thein, Mr.
Williams. Nays: None.
V. Public Comment. No public comments were offered.
VI. Chair’s Report. Vice Chair Norton noted that Chair Wheelock is interested in Board
input on meetings, suggestions for improvements, and potential presentations
separate from Board meetings.
VII. Consent Agenda.
A. DMCC 2022 Budget: Year to Date Update. Council President Carlson
moved to approve the consent agenda. Commissioner Thein seconded the
motion. Ayes: Mr. Campbell, Council President Carlson, Mayor Norton, Mr.
Rybak, Commissioner Thein, Mr. Williams. Nays: None.
VIII. Metrics. Patrick Seeb, EDA Executive Director, Jamie Rothe, EDA Community
Engagement and Experience Director, and Heather Heyer, City Management
Analyst, presented the responses of Rochester residents to the first-time National
Community Survey, including the areas of employment opportunities, affordable
housing, transportation, and public space.
IX. Soldiers Field Master Plan Update. Ms. Rothe and Mike Nigbur, City Park and
Forestry Division Head, presented the short-term Soldiers Field Master Plan that
was recently adopted by the Park Board. The plan includes more amenities, such
as an expanded aquatics center, ADA-accessible playground, basketball and
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pickleball courts, trails, and a fitness circuit. Ms. Rothe noted elements of the plan
that align with DMC goals and objectives, including equity, connectivity to other
public spaces, and community health. Mr. Nigbur estimated the cost of Phase I of
the short-term plan at $18 million. The Board discussed the 2023 DMC Capital
Improvement Plan, which includes up to $10 million for the improvement of public
space in the Education and Recreation Subdistrict. Mr. Rybak reflected that the
DMC funds in this project would help attract and retain employee talent and
distinguish the DMC from its medical destination competitors. Mr. Seeb noted that
a request for DMCC action, including final design and/or bid documents, will likely
be presented in early 2023.
X. Project Discussions
A. Discovery Square. Michael Flynn, EDA Senior Economic Development
Director, Chris Schad, EDA Business Development Director, and Catherine
Malmberg, EDA Public Infrastructure and Development Strategy Director,
and Brent Webb, Mortenson Development Executive, presented an update
on Discovery Square activities, including the variety of available office and
laboratory space and business recruitment efforts across diverse sectors.
Mr. Schad reported that the first phase of Discovery Walk is wrapping up.
Mr. Campbell requested a marketing update at the February meeting to
understand the strategies to promote the DMC initiative to the marketplace.
B. Heart of the City. Ms. Rothe noted that final elements of the Heart of the
City project are nearly done, including the installation of a catenary light
system and the completion of a post-occupancy analysis.
C. Mobility. Ms. Malmberg highlighted Link bus rapid transit federal and state
environmental reviews in mid-2023, Mayo Clinic’s issuance of a request for
qualifications for the development of the West Transit Village, and the hiring
of a DMC-funded City Active Transportation Coordinator.
XI. EDA Work Plan Implementation.
A. Equitable Economic Development. Kevin Bright, EDA Sustainability and
Housing Director, Wafa Elkhalifa, EDA Equitable Economic Development
Coordinator, Chao Mwatela, City Diversity, Equity, and Inclusion Director,
and Dee Sabol, Diversity Council Executive Director, presented community
efforts to support equitable economic development in several areas,
including housing, transit, engagement, and workforce development.
XII. Informational Items. Mr. Schad provided an update on the EDA’s administration
of the State of Minnesota Department of Employment and Economic Development
(DEED) Main Street Economic Revitalization Program grant. He reported that
through October 2022, more than $2,000,000 has been awarded to thirty-six
applicants; fourteen awardees are women, veterans, or Black, Indigenous, and/or
People of Color.
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XIII. Adjournment. Council President Carlson moved to adjourn the meeting. Mr.
Williams seconded the motion. Ayes: Mr. Campbell, Council President Carlson,
Mayor Norton, Mr. Rybak, Commissioner Thein, Mr. Williams. Nays: None.
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A.
DESTINATION MEDICAL CENTER CORPORATION
RESOLUTION NO. ___-2023
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, 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, 2023,
and attached as Exhibit 1. On February 6, 2023, the City Council approved the report.
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 1, 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.
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February , 2023
The Honorable Erin Murphy
Chair, State and Local Government and
Veterans Committee
Minnesota State Senate
3211 Minnesota Senate Building
95 University Ave W
St. Paul, MN 55155
The Honorable Ginny Klevorn
Chair, State and Local Government Finance
and Policy Committee
581 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
St. Paul, MN 55155-1206
The Honorable Bruce Anderson
State and Local Government and Veterans
Committee
Minnesota State Senate
2209 Minnesota Senate Building
95 University Ave W
St. Paul, MN 55155
The Honorable Jim Nash
State and Local Government Finance and
Policy Committee
349 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
St. Paul, MN 55155-1206
The Honorable Bobby Joe Champion
Chair, Jobs and Economic Development
Committee
Minnesota State Senate
3401 Minnesota Senate Building
95 University Ave W
St. Paul, MN 55155
The Honorable Hodan Hassan
Chair, Economic Development Finance and
Policy Committee
Minnesota House of Representatives
597 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
St. Paul, MN 55155-1206
The Honorable Rich Draheim
Jobs and Economic Development Committee
Minnesota State Senate
2225 Minnesota Senate Building
95 University Ave W
St. Paul, MN 55155
The Honorable Jon Koznick
Economic Development Finance and Policy
Committee
Minnesota House of Representatives
281 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
St. Paul, MN 55155-1206
The Honorable John Marty
Chair, Finance Committee
Minnesota State Senate
3235 Minnesota Senate Building
95 University Ave W
St. Paul, MN 55155
The Honorable Liz Olson
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
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The Honorable Eric Pratt
Finance Committee
Minnesota State Senate
2217 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 Ann Rest
Chair, Taxes Committee
Minnesota State Senate
328 Capitol
75 Rev. Dr. Martin Luther King Jr. Blvd.
St. Paul, MN 55155
The Honorable Aisha Gomez
Chair, Taxes Committee
Minnesota House of Representatives
453 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
St. Paul, MN 55155-1206
The Honorable Bill Weber
Taxes Committee
Minnesota State Senate
2211 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
Commissioner Steve Grove
Minnesota Department of Employment and
Economic Development
1st National Bank Building
332 Minnesota Street, Suite E200
St. Paul, MN 55101-1351
The Honorable Gregg Wright
Chair, Olmsted County
Board of Commissioners
151 4th St SE
Rochester, MN 55904
Commissioner Paul Marquart
Minnesota Department of Revenue
600 North Robert Street
St. Paul, MN 55101
Re: Destination Medical Center - February 15, 2023 Report
Dear Senators, Representatives, Commissioners, and Chairs:
Destination Medical Center ) initiative, in accordance with Minnesota Statutes,
Sections 469.40
As we look back on the year 2022, the DMC public-private partnership proved
instrumental in turning from the challenges posed by the COVID-19 pandemic and
towards the future of establishing the City as
and wellness. The certified private investments demonstrate the on-going success of the
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DMC initiative. From 2013 through 2021, the collective efforts of Mayo Clinic and other
private entities exceeded $1.2 billion in qualified private investments.
Specifically, in 2022, we certified a total of $155,147,823.20 for the year ending
December 31, 2021, which includes $110,586,916.31 in Mayo Clinic investments and
$44,560,906.89 in other private investments. The cumulative total of Mayo Clinic and
other private investments through 2021 is $1,262,043,959.32. The City of Rochester has
contributed $56,861,752.23 in certified expenditures from July 1, 2013 through December
31, 2021.
In addition to these certified investments, there are many other projects proposed
or under construction, the majority of which are private investments with no direct DMC
public assistance. A map of the DMC development district and key projects is attached
as Exhibit A.
The success of the DMC initiative may also be measured by employment and tax
revenue. As detailed in the Five-Year Update -Year
, from 2015 2019, the City added approximately 7,700 jobs. More than 80
percent of the new jobs paid more than the City
$75,000. Rochester currently has one of the lowest unemployment rates in the country
at 1.6%. Tax value per acre within the DMC district increased from approximately $0.828
billion in 2015 to $1.813 billion in 2020. A summary of significant projects is attached as
Exhibit B.
This report will provide a brief background of the DMC initiative and then provide
the responses required by the Act.
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
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strategy. It includes 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
Act requires that the Development Plan be updated not less than every five years. The
Five-Year Update was approved by the City and by the DMCC in 2020.
C. Mission Statement.
With Mayo Clinic at its heart, the Destination Medical Center (DMC) Initiative is the
Health and supporting the economic growth of Minnesota, its bioscience sector,
and beyond.
D. Website.
schedule, meeting agendas, minutes, and other information on DMCC activities, as well
as project updates, investor and developer information, subdistrict descriptions, market
also has a link to the DMCC website.
Specific Elements Required to Be Included in the Report.
Minnesota Statutes, Section 469.43, subd. 8 requires that five elements be
included in this annual report.
(1)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 and in 2020 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 Act requires that the Development Plan be updated not less than every five
years. In 2020, the Five-Year Update was posted publicly and a public hearing was held.
The Development Plan and the Five-Year Update can be found at the DMCC website:
https://dmc.mn/plan-priorities/.
(2)Progress of projects identified in the Development Plan
According to the Act, a public infrastructure 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 Development Plan. Since the adoption of the Development Plan on
April 23, 2015, a number of projects have been approved by the DMCC and the City. A
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map of the DMC development district and key projects is included as Exhibit A. A
summary of major approved projects in the DMC development district is attached as
Exhibit B.
We wish to note the progress in 2022 of certain approved projects, in particular:
Heart of the City Phase One: Heart of the City creates a true center of the City,
where Mayo Clinic, commercial, hospitality, retail, and residential meet. Enhancing public
spaces in Peace Plaza and First Avenue in the Heart of the City subdistrict, home to many
hotels, restaurants, medical facilities, and entertainment venues, is a long-standing
priority. The first phase of this project focused on renovating the east side of Peace Plaza
and surrounding areas. New and expanded commercial and retail businesses occurred.
A commemoration was held in May to celebrate the significant progress in completing
phase one. Completion is expected in 2023.
Discovery Square Updates: Discovery Square is a sixteen-square-block area in
the Development District and is the cornerstone of the DMC economic development
strategy. As a live, work, and play environment, it has become a hub of biomedical
research, education, and technology innovation. In 2022, construction was completed on
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Two Discovery Square, a 125,000 square foot bioscience building that expanded the
DMC bio-medical, research, and technology innovation campus. It features tech-forward
tenant spaces designed with flexible lab capacity and leading-edge technology.
Discovery Walk: Construction is well underway for Discovery Walk, a four-block
linear parkway along 2nd Avenue SW. It is planned to connect Annenberg Plaza to
Soldiers Field Park and function as an extension of the Heart of the City public realm
project. Discovery Walk will serve pedestrians and vehicle traffic while also serving as a
catalyst to future private development in Discovery Square. Construction is expected to
be completed in 2023.
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Bryk on Broadway Project: The Bryk on Broadway is a mixed-use, mixed-income
apartment building with 180 workforce housing apartments, providing rents at varying
levels. Construction is anticipated to be completed in the first quarter of 2023.
Riverfront Reimagined: Following a City-initiated small area plan study for a
portion of the 60+ acre area, located southeast of the downtown core on the Zumbro
River, the City continues to lead development of
into downtown. In July 2022, the City adopted a preferred plan to guide the transformation
of the redevelopment area to a future mixed-use neighborhood. Next steps include
review by the Army Corps of Engineers, further design work, and interim site activation.
In August of 2022, the City was awarded a RAISE grant in the amount of $19.9 million for
the Sixth Street Bridge crossing the Zumbro River. Funds from the DMCC- and City-
approved Capital Improvement Plan supported both the small area plan and the Sixth
Street Bridge initial planning and design work.
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Mobility: In 2022, with community input, the DMCC and the City approved
revisions to the approximately three-BRT
They approved a route realignment, including a new station on 6
th Street SE, west of 3rd
Avenue SE, and adding a westbound station at the downtown library. In addition, they
approved enhanced station design, with weather projection for twelve stations and direct
These
revisions were made to the pending Federal Transit Administration (FTA) Small Starts
application. The amount of DMC funds is expected to remain constant. To advance the
long-term success of this project, the City and Mayo Clinic entered a twenty-year
operating agreement in which Mayo Clinic will cover the annual local match for operating
costs and all riders may use the system without paying fares.
In addition to these projects, the DMCC and the City have approved a Capital
Improvement Plan 3. Projects identified in
the CIP are categorized as follows: Public Realm, Strategic Redevelopment, Streets and
Sewers, and Mobility.
Public Realm Projects include:
Chateau Theatre Improvements and Assets Preservation
Discovery Walk Construction
Education-Recreation Subdistrict (Soldiers Memorial Field Park)
Downtown Waterfront: Riverfront Planning and Design
Streets and Sewers Projects include:
Sixth Street Bridge, Sixth Street SE, Waterfront Connectivity
Sanitary Sewer Capacity Bypass on 3rd Ave. SW
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Mobility Projects include:
Arrive Rochester Implementation
Rapid Transit Implementation, including Second Street Reconstruction and
Streetscape
Soldiers Memorial Field Park (Soldiers Field ) contains 150 acres of memorials
and active recreation space. The northern portion lies within the DMC district and is
featured in the Development Plan. Discovery Walk will connect the Heart of the City to
Soldiers Field and the Sixth Street Bridge will link Soldiers Field to the downtown
waterfront area. In 2022, the City Park Board adopted a short-term Soldiers Field Master
Plan. The 2023 CIP includes funding for planning, design, and construction for this
significant project.
DMC public realm projects have benefited from a community co-design process
that encourages the involvement of individuals and communities most impacted by a
project. Community members are retained to assist with reaching previously
underrepresented communities and perspectives. It is an example of the efforts to
advance equitable and inclusive economic development strategies. Building on the
success of community co-design in a variety of DMC-funded projects, in May 2022, a
community co-design toolkit was created to assist others with inclusive engagement. It
is available at: https://dmc.mn/dmc-celebrates-community-co-design-toolkit/.
The DMC-funded projects above reflect 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.
(3)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 $1,262,043,959.
In compliance with Minnesota Statutes Section 469.47, attached is the annual
certification of Mayo Clinic and other private investment that was submitted to DEED on
March 23, 2022, as revised June 16, 2022 (Exhibit C). We also attach the revised annual
certification of City expenditures, which was submitted to DEED on June 15, 2022
(Exhibit D). DEED conducted its own audit process of the certified expenditures,
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requested revisions, and then approved the expenditures. The DEED certifications, dated
June 30, 2022, are attached (Exhibit E).
In addition, we offer the following information:
1. Through December 31, 2022, State Infrastructure Aid in the amount
of $97,591,189.36 has been received. No State Transit Aid has been
received.
2. Actual costs paid by the City from commencement through
December 31, 2022 have totaled $79,018,424.79, 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,
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, 2022, Olmsted County has contributed
$16,500,000.
4. The 2023 combined operating and capital improvements budget for
the DMC totals $52,181,135, a portion of which (approximately $8 million)
is being paid for with funding other than state funds. Of this amount
$3,419,779 will be provided by Olmsted County from its 0.25% sales tax.
The remaining amount is to be provided by the City of Rochester from a
variety of City funding sources, including its 0.25% DMC sales tax. In
addition, Mayo Clinic has pledged financial and in-kind funding to the EDA
in the amount of $1,411,390.
(4)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
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(5)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 F.
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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 2023.
DRAFT DRAFT
Pamela Wheelock, Chair Kim Norton, Mayor
Destination Medical Center Corporation City of Rochester
Enclosures
cc: Legislative Reference Library
1442888-8.DOCX
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TABLE OF EXHIBITS
Exhibit A Map of DMC Development District and ey rojects
Exhibit B Summary of ajor rojects
Exhibit C Annual certification of Mayo Clinic and other private investment dated March
23, 2022, as revised June 16, 2022
Exhibit D Revised annual certification of City expenditures dated June 15, 2022
Exhibit E DEED certifications dated June 30, 2022
Exhibit F City debt service schedule
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EXHIBIT B
Summary of Major Projects in the Destination Medical Center Development District
(Non-Mayo Clinic)
I.APPROVED PROJECTS WITH FUNDING
The Hilton Rochester Mayo Clinic Area (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 involved the construction of an approximately
350,000 square foot, thirteen-level commercial and residential complex. It includes 350
market-rate rental units, created an estimated 235 construction jobs and eight permanent
jobs, and generated a total of $115 million in private investment. The Berkman was
completed in 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.
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 bioscience 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 100 percent
leased.
: 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 includes connections to the street and pedestrian
skyway. The renovation has made approximately 23,000 additional square feet of
commercial or office space available. The project created an estimated 30 construction
jobs and provided 115 permanent jobs. This project was completed in 2020.
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Hotel Indigo Renovation: The Hotel Indigo project involved 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 included the
addition of 33,000 square feet to the existing 114,500 square feet and provided
approximately 111 construction jobs and 28 new permanent jobs. Opening of the new
hotel and restaurant occurred in 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 is providing approximately 257
construction jobs and while creating 38 permanent jobs. This project was completed in
2021.
Heart of the City Phase 1 – Peace Plaza: This phase of the project is a renovation of the
east side of Peace Plaza and surrounding areas. The construction of this transformative
project, which includes improved safety, accessibility, universal design elements,
sustainability, integrated art and improved infrastructure, was largely completed in 2022.
Bryk on Broadway Project: This project is located at 401 Broadway Ave N. It is a mixed-
use, mixed-income apartment building consisting of 180 workforce housing apartments,
providing rent at varying levels. Construction is expected to be completed the first
quarter of 2023.
Two Discovery Square: Located at 209 5th St SW, this expansion of the DMC bio-
medical, research, and technology innovation campus is a 125,000 square foot
bioscience building. It features tech-forward tenant spaces designed with flexible lab
capacity and leading-edge technology. Construction was completed in 2022.
II.PROJECTS
Conley Maass Building: This project involved the renovation of a historic building into a
restaurant space and leased space for high tech companies. The renovation was
completed in 2016.
1 Avenue Flats: This is a 68-unit affordable housing building, and all of the units are
income- restricted to persons at or below 60% of the area median income. The building
opened in 2017.
Lofts at Mayo Park: The Lofts at Mayo Park is a five-story, 29-unit market rate rental
apartment project, which opened in 2017.
Flats on 4th: This project is a six-story mixed use development consisting of 92 rental
apartment units, with 19 of the units affordable to persons at 50% of the area median
income, and 2,300 square feet of ground floor retail space. The building opened in 2018.
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3
501 on First: 501 on First is a five-story, mixed use development consisting of 84 rental
apartment units and 21,000 square feet of commercial/retail spaces. It opened in 2018.
Residence at Discovery Square: The Residence at Discovery Square is a six-story,
mixed use development consisting of 143 rental apartment units, with 20% of the units
affordable to persons at 60% of the area median income, and 15,400 square feet of
commercial/retail space. It opened in 2019.
Hue Apartments: The Hue Apartments is a six-story, mixed use development consisting
of 50 rental apartment units and 2,000 square feet of commercial/retail space. The Hue
Apartments opened in 2020.
Even Hotels and Staybridge Suites: This is a 246-unit dual-branded hotel, which opened
in 2021.
TownePlace Suites by Marriot: TownePlace Suites by Marriot consists of a 110-unit hotel
with two levels of underground parking. The hotel opened in 2021.
27
EXHIBIT
Annual Certification of Mayo Clinic and Other Private
Investment
(Correspondence to Steve Grove, Commissioner, Minnesota
Department of Employment and Economic Development and
Attachments 1, 2 and 3)
28
29
30
32
33
34
35
36
37
38
Aaron
Alison
201 MN Phone ..gov
Steve Grove,Commissioner DEED
Page 2
June 15,2022
cc:Kevin McKinnon
Jeremy Lacroix
Pam Wheelock ,Chair DMC Corporation
Kim Norton,Mayor
Patrick Seeb
Noloan Schild
39
REVISED AS OF JUNE 15, 2022
40
June 30, 2022
Pamela Wheelock, Chair
Destination Medical Center Corporation
C/O Kaela Brennan
McGrann Shea Carnival
Straughn & Lamb, Chartered
800 Nicollet Mall, Suite 2600
Minneapolis, MN 55402-7035
Dennis Dahlen, Chief Financial Officer
Mayo Clinic
200 First Street SW
Rochester, MN 55905
Dear Ms. Wheelock and Mr. Dahlen:
Thank you for submitting the 2021 Certification of Expenditures for Destination Medical Center (DMC).
We are excited to assist with this initiative to make the Mayo Clinic, Rochester, and Minnesota a premier
medical destination.
Your revised certification listed $110,586,916.31 in Mayo Clinic expenditures and $44,560,906.89 in
other expenditures. The Mayo Clinic provided DEED with information on all invoices and payments
(more than 12,000 entries) to account for their certification amount. You also provided an independent
third party report from Ernst & Young LLP stating the law and procedures for certifying expenditures are
being followed properly. Additionally, DEED staff reviewed invoices and payments in your certification.
We selected 68 expenditures totaling $9,018,157.38. We selected one expenditure from each of the 68
new projects listed. All invoices for the selected expenditures were on file and payments were made in a
timely fashion. DEED staff also confirmed that projects had building permits after June 30, 2013. DEED
acknowledges the expenses and payments met guidelines and the internal accounting and auditing
system the Mayo Clinic has in place is sufficient.
Additionally, the DMCC and the City of Rochester provided DEED with a list of 26 completed projects for
$23,296,226 in expenditures. DEED randomly selected 10 permits and was provided the permit
application, permit, project closeout, and map of projects. From this information, DEED confirmed 9 of
the 10 projects’ values, dates, eligibility, and completion. One project was located outside of the DMC
area and was ineligible. The city also approved $62,397,519.85 in expenditures on eight projects that are
completed over multiple years. Your revised certification reduced and properly listed the total amount
of other private entities expenditures at $44,560,906.89. DMCC contracted with Clifton Larson Allen
(CLA) to complete a review on its Certification to insure it is correct. CLA issued an opinion that the
DMCC certification process was correct.
As required by law, I have determined that the amount of 2021 Destination Medical Center
41
Expenditures are the $155,147,823.20 as you certified (in a revised certification). DMC cumulative
Expenditures are now $1,262,043,959.32. As directed by statute, $200 million is subtracted from this
amount to provide Qualified Expenditures of $1,062,043,959.32. Based on this figure and adequate
general aid contributions from the city, I have determined the City of Rochester has qualified for
$29,210,609 of General State Infrastructure Aid in 2022. As per state statute, this payment will be made
prior to September 1.
Thank you again for your efforts on this groundbreaking economic development effort.
Regards,
Steve Grove
Commissioner
C: Patrick Seeb, Economic Development Agency Executive Director
Brent Svenby, City of Rochester
42
June 30, 2022
The Honorable Kim Norton
Mayor, City of Rochester
201 4th Street SE – Room 281
Rochester, MN 55904-3708
Dear Mayor Norton:
Thank you for submitting the 2021 Certification of Contributions for Destination Medical Center (DMC).
We are excited to assist with this initiative to make the Mayo Clinic, Rochester, and Minnesota a premier
medical destination.
Your revised 2021 Certification listed $2,729,666.79 in city general aid contributions between July 1,
2013 and December 31, 2021. You provided a detailed listing of more than 600 expenditures. These
expenditures consisted of direct DMC expenses paid by the city as well as DMC Corporation and DMC
Economic Development Authority expenses paid for by the city. From that list, DEED randomly selected
41 expenses for review. We reviewed invoices, payments and city payroll files for accuracy and
eligibility.
Additionally, the city provided DEED with an independent third party report from Clifton Larson Allen
stating the law and procedures for certifying contributions are being followed properly.
Your revised certification listed $0 in transit contributions and no transit aid will be paid by DEED for
2021.
The amount of your general aid contributions qualifies you for the annual maximum of $30 million of
general aid, however Qualified Expenditures from Mayo Clinic and others were $1,062,203,959. This
amount of Expenditures reduces the amount of general aid to the city to $29,210,609. Your excess
Contributions will be credited towards future years. We will be providing payment prior to September 1
as mandated by statute.
Thank you again for your efforts on this groundbreaking economic development effort.
Regards,
Steve Grove
Commissioner
C: Pamela Wheelock, Chair of Destination Medical Center Corporation
Dennis Dahlen, Chief Financial Officer Mayo Clinic
Patrick Seeb, Economic Development Agency Executive Director
44
B.
DESTINATION MEDICAL CENTER CORPORATION
RESOLUTION NO. ___-2023
Providing Final Approval for the Expenditure of Funds from the 2023 CIP Budget
for the Soldiers Field Project
BACKGROUND RECITALS
A. A foundation of the Destination Medical Center Corporation’s (“DMCC”) mission
statement seeks to “position Rochester, Minnesota as the world’s premier destination center for
health and wellness; attracting people, investment, and jobs to America’s City for Health.” The
Development Plan adopted by the DMCC on April 23, 2015, as amended (the “Development
Plan”) also recognizes the importance of public space, green space, and fostering connections
between residents, patients, visitors, and business representatives as an opportunity to advance the
Destination Medical Center initiative.
B. Extensive planning and effort have been devoted to Soldiers Memorial Field Park
(“Soldiers Field”), 150 acres of memorials and active recreation space located immediately south
of the City of Rochester (the “City”) downtown business district and owned, operated, and
maintained by the City. This significant project, led by the staff of the City, the Park Board, and
the Destination Medical Center Economic Development Agency (“EDA”) and their consultants,
conducted extensive community input, including the community co-design process, prepared
design options, and researched planning options. Discovery Walk will connect the Heart of the
City to Soldiers Field and the Sixth Street Bridge will link Soldiers Field to the downtown
waterfront area.
C. The northern portion of Soldiers Field is located in the development district
boundaries as adopted in the Development Plan (the “Development District”) and in the Education
– Recreation subdistrict as described in the Development Plan.
D. In the 2023 Five Year Capital Improvement Plan, (the “2023 CIP”) approved by
the DMCC on September 22, 2022, found that this project and other projects described in the 2023
CIP were public infrastructure projects, consistent with the Development Plan. In the 2023 CIP,
the DMCC preliminarily approved up to $10,000,000 for this project, recognizing that community
planning efforts were then at a preliminary stage and would shape the project scope and funding
needs, and the DMCC required further detail and information as to the public realm plans and
proposed funding to be presented to the DMCC for specific approval of project plan and costs.
E. On October 4, 2022, the City Park Board adopted the Short-Term Soldiers Field
Master Plan and thereafter the City Council approved it as well. The public realm components of
this project include an aquatics center, with lap pool, bath house, wading pool, and outdoor seating,
new basketball courts, adding a trail through the northeast corner of the park, nature play area,
community shelter, public restrooms, and new public parking (the “Soldiers Field Project”).
F. The community co-designers and planning/design consultants proposed two public
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realm concepts and the Park Board recommended the preferred alternative concept, which moves
a shelter and restroom structure to the western region of the park, minimizing impacts to the golf
course. On January 23, 2023, the City Council reviewed both concepts and by consensus directed
staff to proceed with the preferred alternative concept. The City wishes to proceed with
construction bids for the Soldiers Field Project in early 2023.
G. Minnesota Statutes, Section 469.40, subdivision 11, defines “public infrastructure
project” as “a project financed in part or in whole with public money in order to support the medical
business entity's development plans, as identified in the DMCC development plan” and expressly
includes, among other items, the ability to:
(2) demolish, repair, or rehabilitate buildings. . . . (4) install, construct, or
reconstruct elements of public infrastructure required to support the overall
development of the destination medical center development district including, but
not limited to, streets, roadways, utilities systems and related facilities, utility
relocations and replacements . . . streetscape improvements, drainage systems,
sewer and water systems, . . . landscaping, . . . wayfinding and signage, and other
components of community infrastructure. . . . (6) install, construct, or reconstruct,
furnish, and equip parks, cultural, and recreational facilities, facilities to promote
tourism and hospitality [and] (7) make related site improvements including, without
limitation, excavation, earth retention, soil stabilization and correction, and site
improvements to support the destination medical center development district . . . .”
Minn. Stat. § 469.400, subd. 11 (2022).
H. The City and EDA staff now request final approval of the 2023 CIP in the amount
not to exceed $10,000,000 for the competitive bidding, construction, and related costs of the
Soldiers Field Project. This request is attached as Exhibit A.
RESOLUTION
NOW THEREFORE, BE IT RESOLVED, by the Destination Medical Center
Corporation Board of Directors that:
(1) the DMCC finds that the portion of the Soldiers Field Project contained within the
Development District is a public infrastructure project within the meaning of Minnesota Statutes,
Section 469.40, subdivision 11, which includes installing, constructing, or reconstructing,
furnishing and equipping parks, cultural, and recreational facilities; demolishing, repairing, or
rehabilitating buildings; installing, constructing, or reconstructing elements of public
infrastructure required to support the overall development of the destination medical center
development district including, but not limited to, streets, roadways, utilities systems and related
facilities, utility relocations and replacements, streetscape improvements, drainage systems, sewer
and water systems, landscaping, wayfinding and signage, and other components of community
infrastructure; and making related site improvements including, without limitation, excavation,
earth retention, soil stabilization and correction, and site improvements to support the destination
medical center development district; and
(2) subject to approval by the City, the DMCC approves the Soldiers Field Project as consistent
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with the Development Plan.
BE IT FURTHER RESOLVED, that the Board approves payment for competitive
bidding, construction, and related costs of acquisition, furnishing, and equipping of the Soldiers
Field Project in an amount not to exceed $10,000,000 from the 2023 CIP.
BE IT FURTHER RESOLVED, that the approvals contained herein are expressly
contingent upon (1) no material changes in project scope or schedule, and (2) expenditure of funds
within the Development District.
BE IT FURTHER RESOLVED, that the Board requests that the City and EDA staff
provide regular updates with respect to the Soldiers Field Project.
1450383-6.DOCX
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February 3, 2023
TO:Destination Medical Center Corporation
From:Patrick Seeb, Executive Director, DMC Economic Development Agency
Alison Zelms, Administrator, City of Rochester
RE:Recommendation to Provide Final Approval of Expenditure of Funds for DMC
Education and Recreation Sub-District Public Realm Enhancements
Background
Soldiers Field Memorial Park, located immediately south of Rochester’s downtown business district, is
150 acres in size and includes 4,000 feet of Zumbro River frontage. It is currently comprised of
memorials, activity space, an 18-hole golf course, aquatic amenities, and a track and field facility (with
winter skating), tennis courts, a baseball field, playgrounds, and trails. The northern portion of the park
lies within the DMC Education-Recreation sub-district as defined in the City- and DMC Corp.-approved
DMC development plan.
Soldiers Field Memorial Park plays a critical role within downtown Rochester and the larger community.
The park serves many stakeholders including the downtown, community, and visitors. It is not only a
destination, but it also serves as a connection to other critical areas of the downtown and close by
neighborhoods.
In 2022, the City of Rochester updated the Soldiers Memorial Field Park master plan, with plans to
improve the aquatics features, add sport courts, and enhance the trails, playgrounds and shelters. The
update split the proposed park improvements into short- and long-term park plans.
Alignment with DMC and City of Rochester Objectives
There are several key features within the 2022 Soldiers Field Master Plan that align with the DMC
Development Plan:
- Continues to define Soldiers Field Memorial Park as an anchor and signature public space of the
Education and Recreation DMC Sub-district.
- Improves equitability designed spaces that are created with specific needs of users.
- Provides a welcoming and inclusive park for a growing and diverse community.
Incorporates sustainable design practices
The connectivity aspects of the plan also provide equitable freedom of movement. Walking and bicycling
in the City of Rochester are primary modes of transportation that are safe, convenient, and enjoyable.
The City’s recently adopted Active Transportation Plan which prioritizes walking, rolling and moving as
key aspects of quality public spaces.
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Recent Action
On September 22, 2022, DMC EDA and City of Rochester staff presented the proposed 2023 DMC
Funding Request to the DMC Corporation at its regular public meeting. A component of the funding
request, the 2023 DMC Capital Improvement Program, included a budget of up to $10,000,000 for public
realm improvements in the Education-Recreation sub-district.
The DMC Corp. board approved the 2023 funding request and specifically noted in its approval
resolution that, “community planning efforts are at a preliminary stage and will shape the project scope
and funding needs, further detail and information as to public realm plans and proposed funding shall
be presented to the DMCC for specific approval of the project plan and costs.”
On October 4, 2022, the City of Rochester Park Board adopted the short-term plan and directed City
Parks and Recreation staff to pursue park improvements that would not significantly impact the existing
18-hole golf course.
At the November 10, 2022 DMC Corp. board meeting, DMC EDA and City staff noted elements of the
Soldiers Memorial Field Park plan that could complement or advance that economic and community
development priorities of the DMC corp. board, including:
1. Sustaining and improving the park as a signature public space within the DMC Education-
Recreation sub-district
2. Providing additional and enhanced public amenities that for inclusive and equitable use by
residents, patients, downtown employees, and visitors
3. Utilizing contemporary, sustainable design and construction practices
Staff also noted that Soldiers Memorial Field Park will remain an integral part of an inter-connected
public realm:
1. The park lies at the southern terminus of Discovery Walk, and improved park amenities will
encourage people to use and experience Discovery Square’s signature public space (at its north
end, Discovery Walk will connect to Mayo Clinic’s Annenberg Plaza and the adjoining Peace
Plaza)
2. To the east of the park, construction of the 6th Street S.E. public space and bridge and the
expected development of the Downtown Waterfront Southeast commercial and residential
district will likely increase park use.
Following the November 2022 DMC Corp. board meeting, City staff employed a Community Co-design
model to ensure the community was integrated into the design process and project continues to be a
community supported project. This resulted in two alternatives to be presented to the Park Board and
City Council
On January 17, 2023, the Rochester Park board voted to recommend that the Rochester City Council
accept the Preferred Alternative plan.
On January 23, 2023, the Rochester City Council reviewed both public realm concepts and by consensus
directed City staff to proceed with the Preferred Alternative plan.
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Recommendation
DMC EDA and City staff recommend that the DMC Corporation and Rochester City Council provide final
approval of the following 2023 DMC CIP expenditure:
1) Education-Recreation Subdistrict (Soldiers Memorial Field Park): Public Realm Planning, Design,
and Construction: Up to $10,000,000 to finance a portion of the construction, bid documents,
and associated soft costs of the Preferred Alternative (concept image below) which qualify as a
DMC “public infrastructure project” within the currently-defined DMC development district.
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Additionally, the DMC EDA recommends that the DMC Corp. make any expenditure of the funds by the
City of Rochester contingent upon the adoption of a final design that does not substantively alter the
new and enhanced park amenities included in the Preferred Alternative Plan:
Aquatics
West Nature Play and Shelter
Parking and Track Improvements
Basketball Courts
East Playground Improvements
Downtown Riverwalk
Southwest Trail Extension
Financial Considerations
Current cost estimates for the Preferred Concept Alternative total $20.1 million as outlined below:
Requested DMCC Action
Approve the attached resolution: “Providing Final Approval for the Expenditure of Funds from the 2023
CIP Budget for the Soldiers Field Project”
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C.
DESTINATION MEDICAL CENTER CORPORATION
RESOLUTION NO. __-2023
Providing Final Approval for the Expenditure of Funds from the 2023 CIP Budget
for the Riverfront Redevelopment Project
BACKGROUND RECITALS
A. The Development Plan adopted by the DMCC on April 23, 2015, as amended (the
“Development Plan”) recognized the waterfront along the Zumbro River as a significant
opportunity for development and public space.
B. Significant planning and preparation has focused on two central waterfront
properties totaling 5.5 acres for redevelopment: the western site, approximately 2.5 acres owned
by the City, is located between Second Street and Fourth Street and between Broadway and the
Zumbro River, and the eastern site is bounded by Fourth Street, Third Avenue, and the Zumbro
River (collectively, the “Riverfront Project”). This redevelopment project, led by the City of
Rochester (the “City”) and its consultants and staff, with significant community engagement and
input, culminated in the Riverfront Small Area Plan for these two sites. The City adopted the
Riverfront Small Area Plan in the City’s Comprehensive Plan on July 18, 2022.
C. The Riverfront Project is located in the development district boundaries as adopted
in the Development Plan (the “Development District”) and in the Waterfront subdistrict as
described in the Development Plan.
D. In the 2023 Five Year Capital Improvements Plan, (the “2023 CIP”) approved by
the DMCC on September 22, 2022, the DMCC preliminarily approved riverfront planning and
design in the amount of $1,000,000, and found that the projects described in the 2023 CIP were
public infrastructure projects, consistent with the Development Plan. The DMCC reserved the
right to grant final approval of funding upon final determination of scope, costs, and availability
of funds.
E. Minnesota Statutes, Section 469.40, subdivision 11, defines “public infrastructure
project” as “a project financed in part or in whole with public money in order to support the medical
business entity's development plans, as identified in the DMCC development plan” and expressly
includes, among other items, the ability to:
(1) acquire real property . . . . (3) remediate land and buildings as required to prepare
the property for acquisition or development; (4) install, construct, or reconstruct
elements of public infrastructure required to support the overall development of the
destination medical center development district including, but not limited to,
utilities systems and related facilities, utility relocations and replacements . . .
streetscape improvements, drainage systems, sewer and water systems, . . .
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2
landscaping, . . . and other components of community infrastructure. . . . (6) install,
construct, or reconstruct, furnish, and equip parks, cultural, and recreational
facilities, facilities to promote tourism and hospitality [and] (7) make related site
improvements including, without limitation . . . site improvements to support the
destination medical center development district . . . .” Minn. Stat. § 469.400, subd.
11 (2022).
F. Staff for the City and Destination Medical Center Economic Development Agency
(“EDA”) now request that the DMCC give final approval of an amount not to exceed $800,000
from the 2023 CIP budget for advanced site design and planning, including modifications to the
river channel wall managed by the Army Corps of Engineers, structural analysis of the Red
Owl/Time Theater building, studying skyway connectivity, floodwall integration, landscape and
architectural design and public realm development, and acquiring the property owned by Olmsted
County and located at 322 and 330 3rd Ave SE in accordance with a fair market value appraisal,
and continued study and analyses with respect to design and development. This request is attached
as Exhibit A.
RESOLUTION
NOW THEREFORE, BE IT RESOLVED, by the Destination Medical Center
Corporation Board of Directors that:
(1) the Riverfront Project is located within the Development District;
(2) the site acquisition, ongoing site design and planning, structural analysis, public realm
analysis, river channel wall evaluation, and other studies related to the next phase of work on the
redevelopment of the Riverfront Project is a public infrastructure project within the meaning of
Minnesota Statutes, Section 469.40, subdivision 11, which includes acquiring real property,
preparing property for acquisition or development, installing, constructing, or reconstructing
elements of public infrastructure to support the overall development of the Development District;
and
(3) funding is hereby approved for these purposes in an amount not to exceed $800,000.
BE IT FURTHER RESOLVED, that the Board requests the City and EDA staff provide
regular updates with respect to this next phase of work on the Riverfront Project.
BE IT FURTHER RESOLVED, that the Board reserves the discretion to grant final
approval for the balance of the funds remaining in the 2023 CIP budget upon completion of this
phase of the work and upon recommendation of the City and EDA staff.
1450679-4.DOCX
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February 3, 2023
TO:Destination Medical Center Corporation
From:Patrick Seeb, Executive Director, DMC Economic Development Agency
Cindy Steinhauser, Deputy Administrator, City of Rochester
RE:Recommendation to Provide Final Approval of Expenditure of Funds for
Redevelopment of the Downtown Riverfront
Background
In July 2021, the City of Rochester, in partnership with the DMC EDA, issued a request for proposals to
create a Small Area Plan for the redevelopment of two sites along a portion of the Zumbro River
downtown riverfront. Gamble Associates, an architecture, urban design, and planning firm, was selected
to create the small area plan.
The preparation of this plan included significant community engagement and input:
1. Co-design committee sessions
2. Five “Riverfront Talks” public meetings
3. Seven listening sessions
4. Four site walk-throughs
5. Twelve focus groups
6. More than twenty presentations to the public and stakeholder groups
7. More than fifty coordination meetings
8. More than 345 comments from virtual meetings and the plan website
On July 18, 2022 the Rochester City Council unanimously approved adoption of the Riverfront Small
Area Plan into the City’s Planning 2 Succeed (P2S) Comprehensive plan. The redevelopment site is
located in the Waterfront Sub-District of the DMC Development District described in the DMC
Development Plan. Currently, the use of these riverfront sites is primarily public parking, including
surface lots and a four-story parking garage. In contrast, the City-approved plan includes approximately
two-and-a-half acres of public space and sites for 500,000-700,000 square feet of potential in-fill
development.
The plan identified a series of next steps:
1. Conduct Interim Activation in partnership with the Rochester Downtown Alliance
2. Advance flood wall work with the Army Corps of Engineers
3. Complete due diligence analysis of Red Owl/Time Theater building
4. Site acquisition from Olmsted County (Mr. Muffler site)
5. Site preparation
6. RFQ/RFP preparation
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On September 22, 2022, DMC EDA and City of Rochester staff presented the proposed 2023 DMC
Funding Request to the DMC Corporation at its regular public meeting. The presentation included two
elements related to the riverfront development:
1) An overview of the Riverfront small area plan, including an outline of next steps
2) 2023 Capital Improvement Program (“DMC CIP”) allocation for riverfront planning and design
(up to $1,000,000)
The funding request, including the budgets noted above, was approved by the DMC Corp. board.
Illustration of Riverfront area:
Recommendation
DMC EDA and City staff now recommend that the DMC Corporation receive and file the City-approved
Riverfront small area plan.
Staff further recommend that the DMC Corporation and Rochester City Council provide final approval of
up to $800,000 in DMC General State Infrastructure Aid (GSIA) sourced from the approved $1,000,000
“riverfront planning and design” DMC CIP budget for the following 2023 DMC CIP expenditures:
1. Riverfront site activation, design and engineering: Up to $350,000 of this amount will be used to
advance the next steps presented at the September 2022 DMC Corp. board meeting, including:
a. Working with appropriate State and Federal agencies to discuss necessary modifications
to the river channel wall managed by the Army Corps of Engineers.
b. Red Owl/Time Theater property analysis:
i. affirming existing building conditions
ii. development of redevelopment design alternatives, including conceptual
building floor plans, material concepts, architectural character, circulation and
floodwall and landscape integration
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iii. assessment of potential skyway connectivity
c. Site design and development preparation:
i. advance public realm programming
ii. Coordinate civil, architectural and landscape design, including the use of
community co-design, in preparation for developer solicitation
iii. Produce materials for developer solicitation of the site
2. Olmsted County property acquisition: Up to $450,000 in DMC GSIA to provide for the City of
Rochester’s purchase the Olmsted-County-owned “Mr. Muffler” site at 322 and 330 Third
Avenue Southeast at an amount determined by an appraisal of the property’s fair market value.
If approved, it is expected that this purchase will close by the end of the March 2023. This
purchase is being completed to advance the goals of the DMC development plan, the recently
approved Riverfront small area plan, and is in conformity with the eligible uses of DMC funding
under State statute (namely, to “acquire real property…” and “prepare land for private
development…”).
Also, the City of Rochester is preparing a Brownfield Program application for submission to the
Minnesota Pollution Control Agency to potentially secure additional site preparation funding.
Next Steps
It is expected that the advanced site design and engineering work will be completed in 2023 and that
developer solicitation will follow.
Financial Considerations
No new or additional funding is being recommended at this time. The City staff and DMC EDA
recommendation described above provides for the expenditure of previously-budgeted 2023 DMC CIP
funds.
Requested DMCC Action
Approve the attached resolution: “Providing Final Approval for the Expenditure of Funds from the 2023
CIP Budget for the Riverfront Redevelopment Project”
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58
Mobility
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
Background:
A multi-modal mobility strategy for the DMC has been developed that includes the implementation of a Rapid
Transit Circulator, which is the current focus of DMC’s mobility infrastructure investments. The operation of the
system will be fare free thanks to Mayo Clinic’s ongoing operating support.
Upcoming BRT Milestones:
- Complete key state and Federal environmental reviews and risk assessments (mid-2023)
- Vehicle design consideration (May 2023)
- Bid process commences (4Q 2023)
- Finalize vehicle design and place order (4Q 2023)
Fulfilling the DMC Vision, Mission, and/or Goals:
DMC EDA Staff are working in collaboration with the City staff and the consultant team, SRF, with a continued
focus on the goal of creating a world-class experience that centers equity of access and foregrounds BRT as a
desirable consumer choice.
Current Status:
BRT design 60% complete, now commencing further design, and finalizing NEPA for Q2 2023 completion.
Next Steps:
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Rapid Transit Corridor Development
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
Background:
The DMC vision for the West Transit Village is to provide an authentic place where people want to be and
leverage the opportunity to make the BRT journey better than a trip in a private single occupant vehicle.
To realize this ambitious vision, Mayo Clinic, the City of Rochester, DMC and a private developer need to
collaborate to transform this Mayo Clinic-owned property adjacent to Cascade Lake. The parties have agreed to
a public-private partnership approach but are also mindful of the FTA transportation funding schedule for the
transit elements of the site as well.
Fulfilling the DMC Vision, Mission, and/or Goals:
The DMC goal of mode shift for transportation requires a significant portion of commuting trips downtown to shift
away from Single Occupant Vehicle (SOV) trips and towards other modes including Bus Rapid Transit. The West
Transit Village is a key element of enabling the BRT to function well and provide an experience befitting the goal
of DMC vision of a world class destination.
Approvals, milestones, and decision points:
Since the last Board meeting, further interviews were conducted with the short-listed finalists, and Mayo Clinic
identified a preferred development partner.
Next steps:
1. Bring on a development partner prior to finalizing site details with the FTA. Projected schedule:
a. Mayo Clinic identified a preferred partner at year-end 2022
b. 1Q 2023 – develop conceptual development site plan and BRT infrastructure plan for the site, in
conjunction with Mayo Clinic, DMC and the City of Rochester
c. Spring 2023 – preliminary plan ready for Risk Workshop with the FTA
2. Partnership selection process:
a. Experience with complicated developments, including experience with TOD, multiple decision
makers and the FTA
b. Commitment to Mayo Clinic, DMC and City of Rochester goals
c. Willingness to work quickly to shape the final site plan (see schedule above)
d. Approach to pricing site acquisition
e. Quality of proposed team (e.g., design partner)
f. Financial wherewithal to complete the project
g. Community engagement experience and success
h. History of developing for sale vs. maintaining ownership
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The Downtown Taskforce
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
Feedback and advice
Background:
The COVID-19 pandemic has impacted Rochester, MN and downtowns across the world in ways most could not predict.
Destination Medical Center played a vital role during the height of the pandemic. DMC helped to convene Rochester
Ready, a group of organizations (Rochester Downtown Alliance, the City of Rochester, Experience Rochester, Rochester
Area Economc Development Inc., the Rochester Area Chamber of Commerce, Mayo Clinic, and the Diversity Council),
that serve the downtown community, to support businesses during the immediate crisis, developing and offering many
new tools, resources, programs, etc. These included new loan/grant programs, parking strategies, marketing,
communications, special promotions, and the like.
As we enter a more endemic phase of COVID-19, downtowns will need to continue to adjust. Day-time workforce
patterns, travel schedules, shopping expectations, and many other pre-pandemic experiences have dramatically
changed, impacting downtowns in various ways. DMC staff have studied other cities across Minnesota and the country
throughout the pandemic to learn how other cities are adjusting their plans.
Recently, in Mayor Norton’s State of the City address, she indicated that the Rochester Ready group, with DMC playing a
lead role, will reconvene, along with downtown businesses, property owners, residents, and other stakeholders, to
develop a recovery action plan. Specifically, she has requested that the group use an accelerated model that would
result in the development of a plan in 90 days that includes clearly defined short- and long-term actions.
The group has come together multiple times over the past 30 days to identify potential approaches and resources
needed to build a recovery action plan.
Alignment with DMC Objectives:
DMC has agreed to help convene and lead the task force because of its alignment with DMC’s goal to achieve the
highest quality patient, companion, visitor, employee, and resident experience, now and in the future.
Jamie Rothe, DMC EDA Director of Community Engagement and Experience, is leading as a project manager. A draft
timeline is included below:
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Fulfilling the DMC Vision, Mission, and/or Goals:
DMC is a 20-year economic development initiative established to invest in long-term infrastructure and community
needs. To reach the vision and goals established by the legislation and boards, DMC must address the short and long-
term impacts the pandemic has had on downtown Rochester. By leading the Downtown Recovery Taskforce, DMC
continues to maintain critical relationships in the community.
Work plan or capital improvement budget implications:
None currently.
62
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
Feedback and advice
Research Objectives
To better understand how two key audiences feel about the Rochester region as a
business destination.
Measure baseline awareness of the market, and positive and negative perceptions of
the market, to understand the likelihood of a firm to relocate/expand.
To better inform our recruitment and expansion marketing plan, to reach the target
audiences where they are located, and to ensure our key messages will resonate.
Research Methodology
Ten in-depth interviews with key audience members to better inform our quantitative
instrument.
A ~30 question online survey delivered between the dates of December 15-31, incented
with a $50 gift card.
Audiences
Group A: Executive decision makers from high growth life science companies located
primarily in the US, Canada, and Western Europe.
Group B: Corporate real estate executives, site location consultants, tax & incentive
consultants, and various other economic development connected professionals from
around the world.
Baseline Awareness Metrics (Executives)
79% have worked with Mayo Clinic, or feel they know a decent amount about the Clinic.
28% have visited Rochester, or feel they know a decent amount about the area.
2% feel like they know at least a decent amount about Destination Medical Center.
Baseline Awareness Metrics (Real Estate & Consulting)
79% have worked with Mayo Clinic, or feel they know a decent amount about the Clinic.
35% have visited Rochester, or feel they know a decent amount about the area.
8% feel like they know at least a decent amount about Destination Medical Center.
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General Perceptions (Executives)
Pros
o Presence of Mayo and the possibilities that represents is the #1 positive
perception.
o Belief Rochester/Minnesota represents a more affordable place to live and work
is a positive, especially compared to major metros on the coasts.
Cons
o Negative perceptions around Rochester being rural/remote/cold and how that
would impact a company’s ability to recruit and retain talent.
o Lack of understanding related to Mayo’s footprint, capabilities, and research
program.
Neutral
o Generally unfamiliar with the region, concern there isn’t a thriving life science
ecosystem.
General Perceptions (Real Estate & Consulting)
Pros
o Presence of Mayo, and what that could represent in relation to talent attraction
and the local ecosystem is the most positive perception.
Cons
o Negative perception that the life science cluster/ecosystem is limited, talent is
limited, supply chain is limited.
o Market is small/disconnected/isolated.
Neutral
o Perceptions don’t exist, most common answer was “I don’t know anything about
it.”
Decision Drivers of Labor, Location, Costs and Community:
Labor
o Overall talent pipeline is the top factor for both groups surveyed, followed by
availability of scientists, of technicians, and regulatory expertise.
Location and Costs
o Easy transportation access top factor for business executives, while turn-key lab
space top factor for real estate and consulting.
Community
o Being part of a thriving ecosystem the top factor for both groups, followed by
proximity to innovation and quality of life.
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Decision driver key takeaways
o Companies will pay a premium for a consistent talent pipeline that is predictable
over time.
o Access to high end talent holds a premium over access to entry/mid-level talent.
o Business executives and real estate/consulting audiences have different
motivators and messages need to be tailored for both.
o Prepared sites such as turn-key lab space removes uncertainty and is a priority
for site consultants.
o Building an active, engaged and thriving life science ecosystem needs to be a
priority.
Other Takeaways
Feelings toward Mayo Clinic are overwhelmingly positive.
Connecting Rochester/DMC to Mayo Clinic makes all audiences more likely to
recommend the area.
With minimal education, respondents feel Rochester is a feasible project location.
Creating a thriving ecosystem made up of experienced industry partners is the most
viable type of support DMC can provide.
Being unfamiliar with opportunities in Rochester is our single biggest barrier to success.
Our ability to make ourselves “bigger” by connecting the Rochester market with MSP
will improve perceptions about our size.
Recommendations
Build Awareness
o Aggressively work to build awareness of Rochester as a high-quality business
destination, DMC as a significant source of investment support, and Mayo
Clinic’s close connection to both. Awareness will lead to consideration, and
consideration to conversion.
Build Infrastructure
o Continue to build the life sciences infrastructure that makes our community less
risky, more investment ready, more interconnected, and more dynamic. Bigger,
better infrastructure is how we can level the playing field.
Build Ecosystem
o Make defining, developing, and engaging our local life science ecosystem a
priority. Our short-term success will come from within, and our long-term value
proposition will be largely based on that success.
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66
2023 Q1 Business Development & Business Marketing Program
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
January
Phacilitate 2023: Advanced gene therapy focused conference
Arab Health 2023: Large medical device and healthcare technology industry event, DEED
partnership.
February
San Francisco lead generation campaign: cell and gene therapy, healthcare technology,
radiopharma focus
San Francisco consultant outreach
March
Site Selectors Guild Annual Meeting, DEED partnership
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68
Discovery Square
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
Discovery Square Strategy Updates
The Discovery Square strategy includes six key elements that guides our workplan:
Space
o Demand study being done to understand the need for Discovery Labs life science infrastructure.
See detail below.
o Conference/event space in Two Discovery Square under construction.
Businesses
o Nucleus RadioPharma applying for MN DEED incentives.
o Curating a list of about 40 healthcare technology companies now in the Rochester community.
o Awareness and perception research underway, see separate report.
Access to Mayo Clinic
o Made referrals to Innovation Exchange, Development, Mayo Clinic Platform, Advanced
Diagnostics, and multiple researchers in the past three months.
o Updating processes to track metrics like this.
Ecosystem
o Market awareness surveys identifying this is significant influencer on decision-making.
o Identifying community partners for a regular networking/gathering event for tech companies.
o Developing a communications program that provides regular updates on companies,
technologies, and people in the Discovery Square Innovation District.
Capital
o Rochester Economic Development Fund, administered by RAEDI to help retain, grow, and
diversify the local economy, has approximately $1.3M available.
o Southeast MN Capital Fund closed fundraising for second fund at $7M in 2022.
Workforce
o Funding request for development of a Simulation Lab for advanced workforce training has been
submitted to the MN legislature by the Greater Rochester Area Universities and Colleges.
Other Discovery Square Updates
Discovery Walk construction on hold for the season.
Kellen Research Building construction continues.
Mayo parking structure construction continues.
Life Science Infrastructure
What it is: Community infrastructure for technology, workforce, and economic development
o The Wet Lab: Low-cost laboratory space for life sciences startups
o The Maker Lab: Where tinkerers solve problems with tech
o The Sim Lab: Simulated healthcare space for advanced workforce training
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Objectives of this infrastructure:
o Attract early-stage companies and the follow-on economic impacts
o Advanced training for workforce development
o Be a resource for businesses and the community
Market demand study for multi-tenant Lab Facilities (MTLF) currently underway, including:
o Interviews of representatives from relevant companies and key researchers from Mayo and
other organizations in relevant fields to probe required resources.
o An asset inventory of existing facilities, programs and resources utilized by the regional life
science community and evaluate use levels and barriers to use of services.
o A user survey of the existing programs and facilities to assess needs.
o Best practices from programs located in similar markets
Approvals, milestones, and decision points:
Sep 2020
Two
Discovery
Square
construction
begins
Nov 2021
Discovery
Walk
approved
2022
Discovery
Walk
construction
begins 500
and 400
blocks
2023
Discovery
Walk Phse 2
construction
begins
2023
Discovery
Labs
infrastructure
proposal
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Heart of the City
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2022
Request of the board of directors:
No Action Requested
Background:
Heart of the City Phase 1
The first phase of Destination Medical Center’s Heart of the City public realm project is a renovation of the east side of
Peace Plaza and surrounding areas. The new design will create active, engaging experiences for residents, visitors and
patients in the heart of downtown Rochester. The project broke ground in April 2020.
Project Update
Items to be completed:
- Catenary lighting system installed 2023
Post-occupancy Analysis
- Gehl, an urban design and research consultancy, led onsite post-occupancy analysis, September 2022
- Final report completed, November 2022
- Additional data gather during winter and summer seasons
- Update provided at upcoming DMCC board meeting, 2023
Chateau Theatre Update
In May 2022, Rochester City Council approved Threshold Arts as the interim operator of the Chateau Theatre. Since that
time, Threshold Arts has partnered with many community organizations to activate the space. It is estimated that
approximately 14K people have attended programing at the theatre since May 2022.
There are multiple improvement projects planned for the Chateau this year including adding ADA restrooms, improved
sound and lighting, and improvements to the HVAC system.
Fulfilling the DMC Vision, Mission, and/or Goals:
Heart of the City subdistrict is a long-standing priority for the DMC Corp. board. It is home to many hotels, restaurants,
entertainment venues, and medical facilities, many of which have been undergoing reinvestment. Transformation of the
public realm, Peace Plaza, will be an asset to the downtown core, improve the patient, visitor and resident experience,
and help spur future investment.
Work plan or capital improvement budget implications:
This project is funded via state GSIA funds generated through the DMC initiative, approved by both DMCC and Rochester
City Council.
Approvals, milestones, and decision points:
2016
Heart of City
redesign
commenced
2018
Schematic
design
approved, CIP
authorized
2019
Construction
documents
completed
and bidding
initiated
2020
Contracts
awarded.
Request for
additional
spending.
2023
Anticipated
completion
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Private Development Projects in the Pipeline
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
Background:
While all private development projects submitted to DMC must meet the “but for” test, DMC EDA staff evaluates each
submitted project against the priorities set by the Board before developing a recommendation for the Board. Below is a
summary of Board priorities as staff understand them:
Geographic priorities: Heart of the City, Discovery Square, TOD corridor
Product Type: Preferencing med-tech and workforce housing development
Prioritize projects most likely to achieve DMC goals: private investment, job creation, tax base growth
Validate market demand; support first-in-market opportunities
Meet or exceed Sustainability targets
Contribution to City of Health experience goals
Areas of focus adopted as part of the Phase 2 development update (Nov. 2020 adoption):
•Economic diversification
•Housing affordability
•Mainstreet innovation
•Local entrepreneurs
•Local minority and women-owned business capacity
Below is a selection of the active conversations underway with private developers within the DMC District. Inclusion on
this list does not mean that these projects will ultimately apply for DMC funding, but rather is included to give you an
overview of what kinds of projects are currently being contemplated within the district that may come forward in the
future for a funding request.
HOUSING
Civic Center North Lot
In fall 2021,The City of Rochester issued a RFP to developers for the
parking lot across from the Civic Center. The City elected to enter
exclusive negotiations with Sherman Associates as the preferred
development partner, and are in the midst of those negotiations.
Potential alignment with the District Energy system under development
in downtown is also being explored with this project.
Staff participated in the review process and may potentially support use
of funds for this project.
West Transit Village (WTV)The western terminus of the LINK Rapid Transit line is envisioned as a
transit village that will accommodate several hundred units of housing
and amenity retail in addition to the transit and parking infrastructure
needed on the site. Mayo Clinic is in active negotiations with their
selected developer partner.
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CityWalk Apartments
This is an approximately 140-unit market rate apartment building planned
for the south side of 2nd Avenue and 6th Street. They have received Main
Street grant funding.
YMCA Development
Redevelopment of the downtown YMCAsiteinto approximately 215 units
of multifamily housing including some ground floor live-work spaces.
Thoughtful integration of the project into the adjacent Soldier’s Field and
the approach to affordability levels are main topics of discussion.
HOSPITALITY
Olmsted Bank Building
This project is planning to build 4 stories of boutique hotel on top of an
adaptive reuse of the existing bank building for a restaurant/cafe use on
the ground floor.
The project was awarded $200,000 in Main Street Grant funds and is in
conversations regarding a second application.
Post Office
The Post Office building on Broadway is owned by a Utah-based
hospitality developer with local ties.
Owners of the building are proposing a 140-key boutique hotel for longer-
term travelers. The developer is interested in sustainability and
considering a flag that aligns with this environmental approach.
This project has submitted a TIF application to the City of Rochester and
has an application into the Main Street grant program.
OFFICE/LAB
Three Discovery Square An application has been submitted for Mortenson’s DS3 project that
proposes a 7-story speculative building that is half lab space half CGMP
space (clean manufacturing). DMC EDA staff is in early review of the
submitted materials along with City staff.
Mortenson has commissioned HR&A to do a complete economic impact
analysis of DS1, DS2 and DS3 that is being refined, as well as signed its first
lease in Discovery Square 2 with NRI and Mayo. Mortenson is seeking to
hit 50% leased in 2DS before moving forward with 3 DS.
Fulfilling the DMC Vision, Mission, and/or Goals:
DMC aims to support private investment that is in line with the overall mission of the DMC Initiative. The 20-year goal is
to attract more than $2.1B of non-Mayo private investment.
Approvals, milestones, and decision points:
As projects further develop their plans, we will continue to update the Board and if an application for funding is submitted
the formal review process will begin.
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Main Street Economic Revitalization Program Grant
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
Context
DMC EDA applied for and was awarded $3.12M funding ($3M for grant award for capital projects in
the DMC district, $120K for administrative costs) by MN DEED.
Funds can support up to 30% of cost of new projects (not already completed or in-flight projects),
remaining funds to come from other sources.
Grant awards can range from a minimum of $3K (meaning a $10K project) and a maximum of $750K
(meaning a $2.25M project).
Target opportunities for businesses led or owned by BIPOC, women, and/or veteran community
members.
Program Update – through January 2023:
Awarded funding to 45 projects, total awards of $2.48M
Total Project Costs = $51.2M (est)
Uses:
Retail & restaurant: 27
Office/Mixed-use: 9
Non-profit: 5
Housing/lodging: 4
13 awardees (29%) are BIPOC owned/led
14 awardees (31%) are non-BIPOC woman-owned/led businesses.
Announced Round 2 funding available in December 2022, outside of DMC district.
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76
District Energy
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
Project Updates:
1. The City and DMC are partnering on a utility rate analysis and an analysis of
organizational options for the City. This work is needed given the potential
new scope of the project that may include federal funds and the possibility of use of remaining DMC funds if private
development is served. Work is continuing with Sherman Associates on the North Civic Center lot to connect this
development to the district energy system. The Sherman project is working to finalize their project and financials
this summer to pursue state bonding support for their affordable housing project. This project is likely to come
forward with an official request for funding at the Q2 meeting.
2. With the release of the Inflation Reduction Act (IRA), the City is internally reviewing the possibility of re-scoping its
project to maximize this opportunity to electrify its heating and cooling systems. Through the IRA, the project could
have anywhere from 30-50% project funding support from the federal government. The City Project lead is preparing
a presentation and summary for Council action in February or March 2023.
3. As part of this change, there is an opportunity to connect these City buildings, the Sherman site, and additional
future parcels. To connect these parcels, an ambient loop will need to be installed. To pay for this loop, estimated
at ~$4M, the project is identifying potential additional funding sources such as DMC, State, City and third party
operator/financer funds. At this point, the DMCC has approved $1.5M for the DES project to help private
development connect to the system. An investment in the ambient loop would likely qualify for IRA funding.
Depending on Council action in January and state bonding conversations between the City and State, there may be
a future request for DMC funding to cover the cost difference and seek IRA reimbursement (30-50% of the overall
cost) which would return to the DMC.
Background:
In 2015, DMCC adopted the DMC Development Plan, where the principles of sustainability planning are interwoven
throughout, through an integrated mix of medium-to-high density uses, integrated live-work environments and green/park
space features throughout the downtown. Subsequent action by the DMCC board further reinforces its commitment energy,
environmental sustainability and the evaluation and strategic pursuit of district energy systems (DES):
2015: DMC Sustainability Goals Adoption within DMC Development Plan
2015: Sustainable Energy Options Report Accepted by DMCC
2016: District Energy System Resolution Passed by DMCC
2019: EIC Strategic Energy Project Plan Approval by DMCC
Recognizing the role that a downtown district energy system could have on realizing its energy consumption and carbon
footprint reduction goals, DMCC authorized $2 million in the 2021 and 2022 Capital Improvement Program, building off prior
investment in preliminary engineering studies in 2019 and 2020.
Current Findings:
Olmsted County’s Waste to Energy Facility Steam Line will be decommissioned in October 2023
Olmsted County decided to move forward with a building-based heating and cooling system and not participate in a
district energy opportunity
The Project Team identified a pathway to connect the City buildings and create the initial district energy plant within
the Mayo Civic Center using additional space. City Staff may operate the system in its initial stages. Further analysis is
needed on operating models for the initial DES and long-term DES.
Additional planning will be conducted to connect the system to the South of Downtown Waterfront Site Development.
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The City of Rochester and DMC EDA partnered on an economic analysis of the district energy system that will deliver
three key findings:
o Relevant to the City, the analysis will compare the economic and environmental benefits of two outcomes:
the City pursuing a building-level solution or a district energy solution
o Relevant to the DMC, the economic case to a private developer to connect including the utility and
environmental costs, and opportunity costs of saving space within a development
o Finally, the economic evaluation will also place monetary value to the environmental outcomes of the
district energy system to account for its environmental benefits and externalities
Geothermal Feasibility Studies – In collaboration with the City of Rochester, Mayo Clinic, and Olmsted County, we are
conducting two geothermal feasibility studies to understand the energy potential of the aquifer below Rochester. Two
different technologies are being vetted for their suitability to the district energy system design. The test bores showed
the aquifers have favorable underground conditions to support their use for aquifer-based heat pump development.
In May 2022, the state legislature did not support a bonding bill this year, so some of the funding to support the full
vision of the project did not materialize.
The City adjusted its scope and inherent budget to include a geothermal system that would heat and cool City Hall and
can be expanded over time to connect to redevelopment sites either publicly or privately owned. The other City
buildings will receive natural gas boilers to heat their facilities.
In August, the City also received notice of $2M of federal funding to help support the installation of geothermal and
other renewable energy sources tied to the district energy concept. One potential use of these funds would support the
district energy concept, and likely establish a northern geothermal plant site that would serve Mayo Civic Center and
the North Civic Center parking lot redevelopment site.
Approvals, milestones, and decision points:
November 2020
CIP Approval of
$2M for DES
May 2021
City Council
accepted District
Energy design
funding
Late May 2021
Design began for
district energy
system and
financing
opportunities
evaluated
Q1 2022
50% Design
development
complete. Final
project budget
brought to
Council for
approval
Q2 2022
100% Design
Development
complete in April
2022. State
bonding decision
tentative in May
2022.
Q3 2022
No state bonding
bill. City revised
budget and scope
to include a City
Hall geothermal
plant with
expansion
possibilites
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McKnight Grant Update
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
Project Update:
The DMC EDA has been communicating with McKnight grant officers for their Climate and Energy
Program and Vibrant and Equitable Communities Program. The DMC provided an update to the
McKnight team in November on our progress toward our grant objectives and is working to
continue our collaborative relationship for the next two years. The current grant support period
will end in March 2023. The DMC EDA was invited to apply for another round of Climate and
Energy funding. The team is following up on an opportunity to consider an application to their
Vibrant and Equitable Communities Program as well.
Background:
The McKnight Foundation has supported the DMC EDA’s sustainability activities since 2017 in
the sum of $150,000 over two-year periods.
In 2019, the Foundation, increased their commitment to the EDA’s sustainability programs by
supporting its efforts for another two years, through 2021 in the sum of $185,000 over two
years.
Toward the end of 2020 and early 2021, the City of Rochester and DMC EDA finalized another
application for McKnight funding through their Climate & Energy Program, and through their
Vibrant and Equitable Communities Program.
o The Climate & Energy Program invited the DMC EDA to apply again for a $185,000 grant
over a two-year period. The DMC EDA prepared an application in collaboration with the
City of Rochester. This funding will help support the following initiatives:
Electric Vehicle Infrastructure Community Plan
Active Commuter Resource Center: Community Co-Design
Sustainability and Resiliency Downtown Demonstration Development
Sustainability and Resiliency Action Plan Implementation
Staff Support
o In collaboration with the City of Rochester, Diversity Council, the DMC EDA prepared an
application for the Vibrant and Equitable Communities Program in the sum of $154,000
over a 12-18 month period. This funding will help support the hire of an Equitable
Development Coordinator within the DMC EDA to work on the following initiatives:
Accelerate Economic Mobility: Within this objective, the Coordinator will support
local initiatives that foster economic equity and inclusion and advance ownership
opportunities. This work is critically important to promote the myriad of projects and
initiatives within the City, foster connections, and as possible develop strategies to
form a coordinated approach and strategy to entrepreneurship.
Cultivate a Fair and Just Housing System: Over the past year, an extensive housing
analysis has shown there is a considerable need for affordable housing within the
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DMC District and throughout the region at varied rental and price points. The DMCC
and the City of Rochester have identified affordable housing as a strategic objective.
With the results of the recent market demand studies in hand, the Coordinator will
research housing development models that foster ownership opportunities for BIPOC
communities and identify partners to deliver on the vision.
Strengthen Democratic Participation: Based on the success of piloted equitable
community engagement approaches coined community co-design, the Coordinator
will work to operationalize this process into DMC infrastructure projects in 2021 and
beyond.
Fulfilling the DMC Mission, Vision, and/or Goals:
Energy and sustainability is a key piece of the DMC principles, development plan and goals for the
project. The DMC EDA team is working to implement a range of projects, programs, and initiatives to
realize the ambitious goals included in the DMC Development Plan across a range of impacts including
community health, workplace health, energy, greenhouse gases, water consumption, waste, and
transportation.
Work plan or capital improvement budget implications:
The current DMC work plan describes a variety of initiatives supported by the McKnight Foundation,
DMC 2022 operating and CIP funds. The McKnight funds would help to support the work plan objectives
outlined above.
Approvals, milestones, and decision points:
The DMC EDA team is currently working to apply for additional funds from 2023-25 to support our
sustainability and equitable development programs. This new funding cycle would start in March 2023.
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Housing
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No Action Requested
Workplan Update:
To meet the downtown housing demands outlined in the background section of this update, the DMC EDA has developed a housing
strategy within the 2022 workplan. Below is a summary of the strategies and progress on them since the last update.
1. Share market needs and recruit developers to deliver the various housing products needed within the downtown
Real Estate Summit Focused on Housing –
The summit occurred on May 12, 2022 and welcomed over 150 participants. A summary of the event and its
outcomes was shared with the board and community groups.
Prioritized recruitment and developer host visits –
Visits have been scheduled as part of the Housing Summit and following the event. Since January, the Team has met
with seven new housing developers to learn about the Rochester housing market and economic development.
Establish a nation-wide housing developer analysis to broaden interest in the Rochester housing market
Work is continuing to develop local, regional and national housing relationships to share about the Rochester
market opportunity.
2. Collaborate with public and private partners to realize the downtown and community-wide outcomes
Rochester Housing Coalition Leadership Council Member
Complete. Further, the DMC EDA, County and City housing leaders have set up regular meetings to move our
collective housing initiatives forward coming from the Housing Coalition Leadership meetings.
Understand past housing development progress in the downtown and its relationship to the projected market needs
Data is compiled.
3. Establish a policy and financial framework to realize the downtown housing market demand leveraging existing and new tools,
and novel approaches
Update: This analysis is close to completion and will be shared with the Coalition for Rochester Area Housing in late
January 2023. We will include the report and its findings with the DMC EDA board at the Q2 meeting.
4. Learn best practices from across the US and determine applicability to downtown Rochester
We are developing our approach for housing related conferences for 2023. Opportunities include Urban Land Institute
(ULI) conferences, other national conferences and local and regional gatherings.
1. In January, Wafa and Kevin are attending a development proforma workshop offered through ULI Minnesota.
This will help our development team review private development proformas and ensure the judicious use of
DMC infrastructure funds.
In terms of next steps, the Team will work to continue to advance the work described above to reach our targets. Three priorities are
to continue conversations to grow developer awareness of Rochester, particularly developers of color; the second is to finalize the
housing analysis scope of work and identify a firm to complete this body of work; and the third is to continue to identify and
evaluate predevelopment support programs throughout the state to inform a Rochester program.
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Background:
The downtown housing market demand for market rate units, affordable and subsidized units, and senior housing units by 2030 are
summarized below. In previous board packets, a full summary and explanation of the data and its sources were included.
1,213 affordable and subsidized units at varying levels of affordability
674 units at 30% AMI or below
224 units at 30% to 50% AMI
o Progress: Bryk Contribution = 54 units at 50% AMI
315 units at 50% to 80% AMI
o Progress: Bryk Contribution = 126 total units
18 units at 60% AMI
108 units at 80% AMI
1,840 market rate units of varying type and affordability
1,472 market rate rental
236 multifamily for sale
132 single family for sale
919 senior housing units of varying type and affordability
Active adult ownership: 147 units
Active adult market rate rental: 248 units
Active adult affordable: 180 units
Active adult subsidized: 9 units
Independent Living: 128 units
Assisted Living: 125 units
Memory Care: 82 units
Total: 3,972 housing units needed by 2030 (22% of county-wide housing market demand)
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Equitable Economic Development
To: DMCC Board of Directors
From: DMC EDA
Date: February 3, 2023
Request of the board of directors:
No action requested.
Workplan Update:
Based on the direction of the DMCC Board, the DMC EDA has endeavored to pursue DMC economic development
goals in an equitable and inclusive manner. Below, the EDA has described recent efforts advance equitable
economic development strategies.
1. Community Co-Design Updates:
a. Community and Individual Capacity Building:We launched our first community co-design
facilitator training. We invited eight members of our community to participate in an eight
modules course designed to train the participants on how to facilitate co-design projects. The
course began in January and will end in April. We will provide two additional cohorts in 2023
through early 2024. We invited community and organization leaders to attend the second
community co-design leadership training we are offering in February and March of 2023.
2. Equity Alliance Updates:
a. Rochester Cultural Center: DMC, City of Rochester, and Diversity Council are continuing to
convene through the Equity Alliance monthly meetings. Through the discussions, we identified
the need to support the Cultural Center project Diversity Council and CMRC has been leading in
the community. We presented the concept of the project to Mayo Clinic to gain support of the
project. The Equity Alliance is considering leading a community co-design to better understand
the needs of the BIPOC communities and to bring a holistic perspective to influence the
development and the design of the Cultural Center.
b. Relationship Building: We continue to cultivate relationships with community organizations in
Rochester and introducing minority led communities to the resources we have in our community.
We recently worked with Pamoja Women and leaders from the Autism community to invite
them to participate in the Rochester Downtown Alliance Start up grant in the hopes of
diversifying our downtown programs and events.
3. Affordable Housing Updates:
a. Emerging & BIPOC Developer Assistance Program: we continue to meet with organizations in
the region to learn and understand their progress in developing assistance programs for their
emerging and BIPOC developers. Since the last DMCC Board meeting, we met with NEOO
Partners, City of Brooklyn Park, LISC, and Greater Minnesota Housing Fund.
b. BIPOC Home Ownership Co-design Project: The Coalition for Rochester Area Housing, City of
Rochester, and DMC concluded the BIPOC Home Ownership Co-design project. The co-design
process was created to identify the barriers, evaluate opportunities, and identify funding
recommendations to eliminate the barriers for new home ownership. A full report of the BIPOC
Home Ownership co-design is available on the Rochester Area Foundation website.
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