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HomeMy WebLinkAbout2/1/2024 DMCC Board of Directors Meeting - PresentationDMC Corporation Board of Directors Meeting Thursday, February 1, 2024 Annual Report to the Minnesota State Legislature © 2024 DMC Annual Report to the Legislature •Joint report by the City of Rochester and DMC Corporation •Required to be submitted by Feb. 15 •Submitted to: •Legislative and State Agency Leadership •Chair of the Olmsted County Board •State law outlines required report elements Required Elements of the Report Development plan Progress of projects Actual project costs and financing Estimated costs and financing sources for projects to be started in the next two years Debt service schedules for all City debt issued for DMC projects Report Highlights •$5 billion investment •2.4 million square feet of new space Mayo Clinic Bold. Forward. Unbound. •Mobility •Public Space •Streets and Sewers •Bio-med-tech •Workforce Housing DMC investments in •Business Recruitment and Marketing •Equitable Economic Development •Grow Downtown Together Programmatic initiatives Annual Report to the Minnesota State Legislature © 2024 DMC February 2024 METRICS DISCUSSION: PRIVATE INVESTMENT DMC GOALS 1.COMPREHENSIVE STRATEGIC PLAN: Create a comprehensive strategic plan with a compelling vision that harnesses the energy and creativity of the entire region. 2.ATTRACT PRIVATE INVESTMENT: Leverage public investments to attract more than $5 billion in private investments to Rochester. 3.CREATE JOBS: Create more than 30,000 new jobs, with workforce development strategies that support that growth. 4.GENERTE ADDITIONAL NET TAX REVENUE: Generate approximately $7.5–$8.0 billion in new net tax revenue over 35 years. 5.BECOME THE DESTINATION FOR HEALTH & WELLNESS: Achieve the highest quality patient, visitor, and community member experience both now and in the future. $7 $46 $152 $297 $428 $689 $961 $1,105 $1,261 $1,460 $0 $500 $1,000 $1,500 $2,000 $2,500 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Actual CUMULATIVE INVESTMENTS VS PROJECTED (+/- 20%) PRIVATE INVESTMENT STATUS THROUGH 2022 •Cumulative investment of nearly $1.5B •Met formula requirements to receive maximum annual state aid •2022 total investment above 8-year average •Investment trending upward following Covid-19 •Monitoring non-Mayo private investment NON-MAYO PRIVATE INVESTMENT BY YEAR $0 $0 $20 $38 $45 $135 $133 $84 $45 $26 $13 -$20 $0 $20 $40 $60 $80 $100 $120 $140 $160 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 RESIDENTIAL DEVELOPMENT •Dramatic rise in borrowing costs starting in early 2022. •Dramatic rise in construction costs post-Covid. •Dramatic rise in operating costs. BORROWING & CONSTRUCTION COSTS $10,000 $10,500 $11,000 $11,500 $12,000 $12,500 $13,000 $13,500 $14,000 0.00 1.00 2.00 3.00 4.00 5.00 6.00 ENR'S CONSTRUCTION COST INDEX FEDFUNDS De c 2 0 1 8 De c 2 0 2 3 Current TIF Policy RESIDENTIAL UNITS BY YEAR IN THE DMC DISTRICT (2015-Present*) 0 90 190 0 180 505 0 0 180 0 219 0 0 100 200 300 400 500 600 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024*2025*2026* AVERAGE NEXT STEPS: TWO PATHS FORWARD 1.Wait for the market to shift •Housing shortages will likely increase •Development input costs may come down •Bold. Forward. Unbound. may create additional market constraints 2.Levers COSTS SYSTEMS MARKETING REGULATIONS Minnesota MedTech3.0 Update & Discussion Request of the Board Affirm that DMC is a partnering organization within the MMT3.0 consortium and is meaningfully contributing to the MMT3.0 grant outcomes. What is Minnesota MedTech 3.0? A bold new strategy to •Grow Minnesota’s global market share of products &firms in the medical technology industry •Build an ecosystem that is even more connected,more strategic,and “smarter” •Accelerate the pace of “Smart MedTech”innovation from Minnesota •Achieve inclusive economic growth of good jobs and investment in our region •Move beyond pairwise partnerships to collaboration against shared outcomes in specific areas •Improve health outcomes for the world while lowering cost We do this with shared principles,such as •Intention for scale,taking a market-oriented approach •Industry leadership,with clear cross-sector support •Alignment of action,through integration of existing capabilities and assets •Equity lens,with commitment to outcomes and process to drive inclusive growth •Exponential collaboration,moving above and beyond today’s pairwise partnerships •Deep commitment,demonstrated by organizations and executive leaders 3 What are Tech Hubs? •Endorsement of our region’s plan to supercharge a critical technology ecosystem •Eligible to compete for portion of $500M federal funding •Administered by Commerce Department’s U.S.EDA 4 Federal EDA designated 31 Tech Hubs from nearly 200 applications Why did the MSP region win Tech Hubs? Several strengths on display at once •Existing MedTech capability with potential for continued growth •Industry leadership with depth of commitment from across sectors •Commercialization approach with complementary interventions •Integrated approach to equity,workforce &other critical issues •Regional collaboration with plans for broader engagement This provides an opportunity to prove •Comprehensive plans for equity & diversity, capital access, workforce •Our ability to execute with strong industry leadership •Impact on national and economic security •Alignment of investments and policy 5 6 Consortium members developing application Optional entities4 Labor and workforce training organizations3 Economic development organizations2 Educational institutions State, local, and tribal governments Industry or firms in relevant tech innovation, or manufacturing sectors1 Eligible consortium 150+ leaders at these organizations are collaborating We are working to produce a 100+ page Phase 2 application to the U.S. EDA by February 29 Overarching strategy (10 pgs) Risk mitigation narrative (10 pgs) Component projects (30 pgs) Consortium letters (50 pgs) 7 DMC Contributions Grant Preparation •Co-leading one of the five project streams •Coordinating multiple Mayo Clinic entities re engagement in application Grant Execution •Use existing BD activities to bring Smart MedTech businesses to MMT3.0 ecosystem. •Convene Rochester-based MMT3.0 ecosystem gatherings as needed. •Contribute to developing and executing MMT3.0 workforce development strategies Request of the Board Affirm that DMC is a partnering organization within the MMT3.0 consortium and is meaningfully contributing to the MMT3.0 grant outcomes. 1 2 Strategic Priorities 3 4 Mayo Clinic Bold. Forward. Unbound Transforming Healthcare for the World •$5 billion investment •2.4 million square feet of new space •First buildings open in 2029 •Project complete by 2030 •$500 million in Sustaining projects 4 5 St. Croix Bridge $646 million US Bank Stadium $1 billion Amazon HQ2 $2.5 billion 2024 State of MN Bonding Bill $2.6 billion SW Light Rail $2.7 billion MSP Airport Expansion $3.2 billion Mayo Bold. Forward. Unbound. $5 BILLION 2023 City of Rochester Permit Valuation $600 million 6 Positioning Rochester for Success: Infrastructure Investment & Organizational Mindset 7 Initiatives and Projects 2015 DMC $585 million 2016 Integrated Traffic Study 2018 Comprehensive Plan Update 2020 Park Levy $2 million/yr. 2021 Airport (2021-2027) $79 million 2023 Unified Development Code 2023 Local Option Sales Tax $205 million 2024 WRP $84 million 2024 DBET Phase 2 $22 million 2024 Soldiers Field $22 million 2025 RPU AMI $29 million 2025 6th St Project $29.9 million 2026 Link $143 million 2026 Parks Maintenance Facility $31 million 2030 RPU Plan 100% Renewable 2029/2030 Bold.Forward. Unbound. 8 City of Rochester operations have grown between 110-262% while employee base has grown 17% 9 10 11 Build from current partnership model Project Managers, DEI, and Sustainability work are intertwined and collaborative. Shared vision, shared implementation, shared success. 12 Source pps.org/article/grplacefeat Four Keys to Transformation Success 1.Strategy 2.Patience 3.Resilience 4.Growth Copyright: Roger L. Martin, 2021 Current Focus for City 13 Gaining and Sustaining Momentum Teammates & Resources needed to secure resources for projects -Existing teammates pursuing external funding -Elected Officials and Partner advocacy Teammates & resources needed to deliver projects -Prioritize new and existing revenue to support service delivery -Optimize internal processes & collaboration -Adapting to state of change Teammates & resources needed to meet future service needs -Sustaining transformation through required new services -Adapting to a new future Rochester -Nurturing partnerships NOW DURING POST 14 The Printing Press The Light Bulb The Car The Airplane Penicillin The Telephone The Internet iPhone Artificial Intelligence This is Rochester’s Transformative moment in History 15 Thank You! 2025 DMC Plan Update •Immediate Next Steps: •Build out data set necessary to to establish baseline assumptions and inform future decision making •Identify existing plans or planning processes by others to avoid duplication of efforts •Update Outcomes: •Reflect DMC progress, opportunities, challenges •Complement partner plans, strengths, strategies •Incorporate community priorities •Reaffirm DMC’s primary mission, vision, purpose •Meet legislative requirements Immediate Next Steps + Update Outcomes Update preparation, regular meeting updates Timeline Affirm plan update scope, requirements Nov. ‘23 Determine data needs to ensure informed decision- making; identify existing planning by others to avoid duplication Feb. ‘24 Joint meeting: DMCC, DMC-EDA, City Council, County Board May ‘24 City Council considers plan; DMCC public hearing and plan consideration May ‘25 EDA recommends DMCC receives plan; sets date for public hearing; public comment period Jan. - Feb. ‘25 Discovery Labs Update & Discussion Discovery Square Strategy Build awareness Build InfrastructureBuild ecosystem Fostering Innovation Through Infrastructure Shared Lab – low cost shared wet lab space for startups Maker Lab - Where inventors solve problems with tech Simulation Lab - healthcare space for workforce training Simulation Lab - Update •GRAUC plus 11 organizations •Pilot launch in 2024 •Need ~$11M for permanent operation Maker Lab - Update •Exploring partnership opportunities Shared Lab - Update The necessary investments: •Real Estate - Two Discovery Square •Mortenson •Real Estate – Turnkey lab space •TBD funding source •Operations •TBD joint venture © 2023 DMC Downtown Property Support Request of the Board •Discuss strategies to supportrehabilitation, renovation, andreanimation of downtown properties •Direct staff to prepare p rogram goals and parameters for future consideration Background Historic District Designation Nov. 2020 2020 DMC Development Plan May-Sept. 2021 DMCC discussed potential funding, economic recovery strategies Oct. 2021 Jan. 2022-Feb. 2024 Jan. 2023-Sept. 2023 Sept. 2023 Jan. 2024 DMC EDA (City of Rochester) received Main Street grant award Main Street Grant Downtown Task Force 2024 DMC CIP Why is this important? •Experience for visitors and residents •Downtowns are a city’s brand •Downtown contributes disproportionately to Rochester tax base •Outcome from Downtown Task Force •Contemplated in DMC enabling legislation What will this impact? •Support job growth •Fill vacant downtown spaces •Repurpose spaces for new uses •Historic preservation and rehabilitation Photo Here Who will be our partners? •Private property owners •City of Rochester •Rochester Downtown Alliance •Rochester Area Economic Development, Inc •Experience Rochester •Rochester Area Chamber •Mayo Clinic Photo Here Experiences DMC Joint Funding Application •Current program Main Street Grant (DEED) •Recent program Photo Here Request of the Board •Discuss strategies to supportrehabilitation, renovation, orreanimation of downtown properties •Direct staff to prepare program goals and parameters for future consideration Photo Here Riverfront Redevelopment 1 Current Updates: •Predevelopment infrastructure progress •Phasing of capital improvements •Developer solicitation: East and/or West site