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HomeMy WebLinkAbout2/1/2024 DMCC Special Public Meeting - Exhibit A to Resolution A February , 2024 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 February , 2024 Page 2 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 Matt Varilek Minnesota Department of Employment and Economic Development Great Northern Building 180 E. 5th Street, Suite 1200 St. Paul, MN 55101 The Honorable Sheila Kiscaden 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, 2024 Report Dear Senators, Representatives, Commissioners, and Chairs: On behalf of the Destination Medical Center Corporation (the “DMCC”) and the City of Rochester (the “City”), we are pleased to submit the enclosed annual report on the progress of the Destination Medical Center (“DMC”) initiative, in accordance with Minnesota Statutes, Sections 469.40 – 469.47 (the “Act”). The Act requires that this report include five elements: (1) the DMC development plan and any proposed changes; (2) progress of projects; (3) costs and financing sources, including State funding and required local contributions, for recent projects; (4) estimated costs and financing sources for future projects; and (5) debt service schedules for all outstanding obligations of the City for debt issued for DMC projects. We discuss each of these elements in the report. Below, we provide a summary of DMC’s 2023 milestones, as well as a brief background of Minnesota’s largest economic development initiative. February , 2024 Page 3 Destination Medical Center: 2023 Milestones The DMC public-private partnership continued to flourish in 2023, ten years after the Legislature enacted this historic economic development initiative. Two highlights of the year deserve particular attention in the mission to position Rochester, Minnesota as the world’s premier destination for health and wellness. First, Mayo Clinic announced a momentous investment in the Bold. Forward. Unbound. in Rochester initiative. Second, qualified private investments from 2013 through 2022 neared $1.5 billion. Mayo Clinic announced a $5 billion expansion in its Rochester campus, the largest investment in Mayo’s 160-year history and the largest investment in Minnesota history. Mayo plans to add five new buildings with 2.4 million square feet of space, with a focus on integrating in-person and virtual visits and shading the traditional lines between inpatient and outpatient care and between in-person and digital health care. The project features two new clinical buildings at the center of campus, located in the heart of the DMC development district. Skyways and tunnels will connect the new facilities with existing buildings, as well as downtown retail, housing, higher education facilities, and other multi-purpose community assets. The success of the DMC initiative through 2023 helped to build the foundation to support Mayo Clinic’s new multi-billion-dollar investment. Mayo Clinic’s Bold. Forward. Unbound. in Rochester initiative will expand its clinical, research, and education facilities in Rochester and critically advance the DMC initiative. As to private investment certifications, in 2023, we certified to the Minnesota Department of Employment and Economic Development (“DEED”) a total of $199,088,689.42 for the year ending December 31, 2022, which includes $172,632,461.06 in Mayo Clinic investments and $26,456,228.36 in other private investments. The cumulative total of Mayo Clinic and other private investments through 2022 is $1,461,132,648.74. In addition, as to transportation, the City certified City and County transit contributions of $9,081,280.13 for 2022, qualifying for the maximum disbursement of State transit aid of $7,500,000. 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 public and private projects is attached as Exhibit A to the report. A summary of significant projects is attached as Exhibit B to the report. Destination Medical Center: Background The Act established a unique public-private partnership to lead this historic economic development initiative. The law also required private investment to lead the public investment: it required $200 million in private expenditures before any State funding occurred. This threshold was surpassed in 2017, and more than $1.46 billion of private funding has been certified through 2022. February , 2024 Page 4 The Act further established the partnership between the DMCC, the City, Mayo Clinic, and Olmsted County. The DMCC Board of Directors is appointed by the Governor, the City, the County, and Mayo Clinic. Key funding and strategy decisions require approval by both the DMCC and the City Council. Specifically, the Act required the preparation and joint approval of a development plan (the “Development Plan”), which serves as the strategic framework for DMC’s business and economic development strategy. It includes land use, transportation and infrastructure planning, market research, funding priorities, business and economic development, and market strategies. After City approval, the DMCC adopted the Development Plan on April 23, 2015. The Development Plan must be updated not less than every five years. The Five-Year Update was approved by the City and by the DMCC in 2020. The Ten-Year Update is underway and is scheduled for approval in May of 2025. The benefits of the DMC initiative may be measured in other ways. From the end of 2015 through the first quarter of 2023, Mayo Clinic alone added approximately 6,500 employees in Rochester. Hundreds of housing units and tens of thousands of square feet of bio-med-tech space have been developed, and hundreds of community members have been engaged in the visioning and design of DMC public investments. Mayo Clinic’s Bold. Forward. Unbound. in Rochester. will lead transformational progress on all fronts. For more information, including viewing the DMC Development Plan, public meeting materials, project updates, investor and developer information, and market research, visit www.dmc.mn. The City’s website, www.rochestermn.gov, also provides information on the DMC initiative. 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 2024. DRAFT DRAFT Pamela Wheelock, Chair Kim Norton, Mayor Destination Medical Center Corporation City of Rochester Enclosures cc: Legislative Reference Library 1760137-7.DOCX