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HomeMy WebLinkAboutDMCC Resolution No. 195-2026 (Approving Final Approval of Expenditure of Funds for Public Infrastructure Improvements)DESTINATION MEDICAL CENTER CORPORATION RESOLUTION NO. 195-2026 A RESOLUTION APPROVING FINAL APPROVAL OF EXPENDITURE OF FUNDS FOR PUBLIC INFRASTRUCTURE IMPROVEMENTS The following Resolution was offered by Paul Williams, seconded by Mark Thein. BACKGROUND RECITALS A.In the 2026-2027 Five Year Capital Improvement Plan (the “2026-2027 CIP”) approved by the Destination Medical Center Corporation (“DMCC”) on September 25, 2025 per Resolution No. 178-2025, the DMCC approved the Downtown Public-Private Infrastructure Investment Alignment project (the “Project”) in association with Mayo Clinic’s Bold. Forward. Unbound in Rochester initiative (the “Approval”). B.The Approval recognized that planning efforts for the Project were in a preliminary stage and that such planning efforts would shape the project scope and funding needs. Given this, the Approval was conditioned upon the requirement that further detail and information as to public realm and infrastructure plans and proposed findings be presented to the DMCC for specific approval of the project plan and costs prior to proceeding with construction. C.A portion of the Project, specifically construction of the Utility Power Underground Infrastructure Package B3 (the “UPUI”), as further detailed on Exhibit A, is ready to advance to construction pending further authorization by the DMCC to expend up to $3,600,000 from the Approval for construction of the UPUI (the “UPUI Project”). D.Staff of the City of Rochester (“City”) and the Destination Medical Center Economic Development Agency (“EDA”) now request that the DMCC approve authorization of the UPUI Project. RESOLUTION NOW, THEREFORE, BE IT RESOLVED, by the DMCC Board of Directors, that the DMCC approves the UPUI Project and that the DMCC hereby approves the UPUI Project as a public infrastructure project within the meaning of Minnesota Statutes Section 469.40, Subdivision 11, and consistent with the Development Plan, adopted on April 23, 2015, as amended; provided that: 1.The scope of approval for the UPUI Project is set forth in the attached Exhibit A; 2.Any material deviation from the scope of approval for the UPUI Project will be subject to subsequent approval by the DMCC, which approval shall be based upon review and final determination of scope, costs, and availability of funds; and 3.The EDA and City are directed to provide the DMCC Board of Directors with regular updates with respect to the scope and costs of the UPUI Project. 2 BE IT FURTHER RESOLVED, that the Chair and Treasurer are hereby authorized and directed to transmit this Resolution to the City and to take such actions as are necessary or convenient to effectuate this Resolution. 42821960v2 The question was on the adoption of the Resolution and there were 7 YEAS and 0 NAYS, as follows: BOARD OF DIRECTORS Destination Medical Center Corporation YEA NAY OTHER Douglas M. Baker, Jr. X Kristin Beckmann X Kim Norpton X Randy Schubring X Mark Thein X Pamela Wheelock X Paul D. Williams X RESOLUTION ADOPTED on May 21, 2026. ATTEST: Pamela Wheelock, Chair Destination Medical Center Corporation EXHIBIT A DOWNTOWN INFRASTRUCTURE ALIGNMENT MAY 2026 TO: DMC CORPORATION BOARD OF DIRECTORS FROM: DMC ECONOMIC DEVELOPMENT AGENCY Request of the Board Authorize expenditure of up to $3.6 million from the Downtown Infrastructure Alignment program for construction of Utility Power Underground Infrastructure (UPUI) Package B3. The project is being advanced pursuant to the downtown infrastructure plan and includes: upgrades to sanitary sewer, stormwater, and water infrastructure; street and streetscape reconstruction; completion of remaining utility grades and street improvements not impacted by Mayo Clinic’s separate UPUI B3 Package; and coordination with Mayo Clinic to align construction schedules and minimize community impacts. The project will be funded from the approved 2026–2027 DMC CIP, which includes $38,371,000 for Downtown Public-Private Infrastructure Investment Alignment. Why Board Attention Is Needed Now The City of Rochester and DMC EDA are moving from program-level planning into project-by-project implementation within the geography affected by Bold. Forward. Unbound. in Rochester. The approved 2026 CIP anticipated that this work would require active coordination of public and private infrastructure to achieve “maximum public benefit with minimum public impact.” That coordination is now especially important because Mayo Clinic’s utility and campus- expansion work is moving quickly and is already shaping the sequencing of adjacent public infrastructure. The City and Mayo Clinic have entered, or are preparing, a series of coordination, development, and infrastructure agreements addressing utility plant and underground infrastructure, roadway replacement, stormwater management, site development, and future civil infrastructure work in the public right-of-way. In the near term, some public infrastructure packages must be advanced on an accelerated basis to stay aligned with adjacent institutional work. Following these initial, time-sensitive projects, staff intend to provide the board with a more consistent and foreseeable approval cadence, including visibility into upcoming construction packages, major dependencies, and anticipated funding requests. This funding authorization follows the City of Rochester’s expenditure of up to $400,000 for necessary project design under the approved 2026 Capital Improvement Plan (CIP) and would allow the project to advance from design into construction in coordination with adjacent downtown infrastructure work. Approved Project or Program Baseline The approved 2026–2027 DMC CIP includes $38,371,000 for Downtown Public-Private Infrastructure Investment Alignment, approximately $19,185,500 per year. The project supports street, water, storm sewer, public realm, and sanitary sewer improvements in the geography impacted by Bold. Forward. Unbound. in Rochester. When the board approved the 2026–2027 CIP, it specifically recognized that planning efforts for this set of projects were at a preliminary stage and would shape project scope and funding needs over time. The board further provided that more detailed public realm and infrastructure plans, along with proposed funding, would return to the DMCC for specific approval, while allowing the City to expend a portion of project funds on necessary design and planning in the interim. The attached Original Funding Matrix substantially defines that approved program baseline. It identifies the corridor and block segments within the impacted geography and distinguishes between Mayo Clinic and City responsibilities (including DMC-funded projects). The overall program is expected to conclude construction in 2029 Current Status Downtown Infrastructure Alignment is in early implementation. Staff have identified the blocks affected by BFUIR-related work, grouped them into logical project packages for delivery, assigned project managers, and developed preliminary schedules. Kickoff work has occurred, monthly coordination meetings are underway, and individual project meetings are beginning as packages enter active design and delivery. Several related projects are already advancing. The broader downtown infrastructure effort includes projects already approved separately from the $38.371 million program, as well as packages that will return to the board as scope, timing, and cost become sufficiently defined. The overall project is expected to proceed by phased, specific approvals rather than through a single blanket release of the entire project budget. The attached “Current and Planned Project Area” map illustrates these projects. As these projects intersect, the development of the public realm including streets, sidewalks, public and private spaces, and the infrastructure that supports utilities, transportation, wayfinding, and comfort elements such as weather protection and seating must be considered not as isolated segments but as an interconnected system. A Request for Qualifications has been issued to develop a public realm plan. This plan will include a framework and strategy to guide the design and implementation of these projects. Risks to Scope, Budget, Timeline, or Delivery • Sequencing interdependency on related Mayo Clinic work. Shifts in schedule or field conditions may require public infrastructure work to be re-sequenced. • Compressed implementation timing. Some public improvements are being planned and delivered in a context Mayo Clinic work is underway or imminent, creating pressure to move design, approvals, and construction packaging quickly enough to avoid lost windows, rework, or avoidable disruption. • Continued budget refinement. The 2026 DMC CIP establishes the program budget, and the funding matrix identifies a recommended allocation framework, and individual package costs will continue to mature as design progresses, estimates are refined, and bids are received. Early budgets were prepared to reflect a variety of considerations which can impact costs over time, including construction contingencies and cost escalations related to expected changes in the labor market. • Downtown access and coordination complexity. Multiple overlapping projects in a constrained urban environment require careful phasing, closure management, business access planning, and communication. The shared City/Mayo/DMC principles expressly commit the partners to optimizing schedules, managing road closures, applying the Business Forward model, improving connectivity, and maintaining timely, actionable communications. Upcoming Requests or Decision Points Staff expect additional project-specific design and construction authorizations to come forward as scopes mature and construction schedules are confirmed. Going forward, staff will provide the board with a rolling outlook showing: • the next packages expected for funding authorization (see “Schedule of Projects”) • major City or Mayo Clinic dependencies • and any foreseeable scope, budget, or schedule revisions DMC Alignment Downtown Infrastructure Alignment reflects a core DMC responsibility: ensuring that major private investment in Rochester is matched by public infrastructure that converts that investment into broader and longer-lasting community value. The approved 2026– 2027 CIP expressly frames this program as a coordinated response to Mayo Clinic’s transformative Bold. Forward. Unbound. in Rochester investment, intended to deliver “maximum public benefit with minimum public impact” across the downtown. In that sense, this approximately $38 million investment is not merely reactive infrastructure work. It is part of the public-sector work required to shape Rochester’s next phase of growth. As Mayo Clinic’s expansion strengthens Rochester’s role as America’s City for Health, the surrounding infrastructure must also function at that level. This investment helps ensure that growth is not simply accommodated, but intentionally organized: in ways that improve connectivity, reduce repeated disruption, support future development, and best protect the experience of patients, visitors, workers, residents, and businesses during a period of major change. That is consistent with the shared City/Mayo/DMC principles calling for aligned schedules, “dig once” infrastructure investment, improved connectivity, Business Forward construction management, and coordinated communications. It also aligns with DMC’s broader emphasis on purposeful growth and designing for well-being. Public infrastructure in this setting is not just a technical necessity. It shapes whether downtown remains navigable, safe, legible, accessible, and economically resilient while major institutional growth is occurring around it. By coordinating public and private investment at this scale, DMC helps ensure that Rochester’s physical environment supports not only Mayo’s expansion, but also the broader civic, economic, and human experience that should accompany a leading health-focused city. Attachments / Exhibits • Schedule of Projects • Original Funding Matrix • Current and Planned Project Areas Original Funding Matrix Color code: Blue = Mayo Responsibility, Orange = Approved improvement already funded, Yellow = Option 1, Green = Option 2, Purple = Option 3 Map Number Location Condition description Traffic Study or Site Replacement standard Estimate 1 Intersection at 6th Ave NW & Civic Center Dr Needs intersection improvements for additional traffic demand No typology than standard road $ 750,000 2 6th Ave NW between 4th St. NW & Civic Center Dr above grade infrastructure only and bike enhancements No typology than standard road $ 1,500,000 3 6th Ave NW between 3rd & 4th St. NW infrastructure upgrades needed (Sanitary 1945, Water 1936) No typology than standard $ 1,500,000 4 6th Ave NW between 2nd & 3rd St. NW infrastructure upgrades needed (Sanitary 1945, Water 1936) No typology than standard road $ 1,500,000 6th Ave NW between 1st & 2nd St. NW infrastructure upgrades needed (Sanitary 1945, Water 1936) UPUI B3 & Site Plan (50% of block) typology than standard 6th Ave NW between Center St W & 1st St NW infrastructure upgrades needed (Sanitary 1945, Water 1936) UPUI B3 & Site Plan typology than standard Intersection of 6th Ave NW & Center Street W infrastructure upgrades needed (Sanitary 1952, Stormwater 1984 & UPUI B3 & Site Plan Major roadway, greater typology than standard 6th Ave NW between 1st St SW & Center Street W infrastructure upgrades needed (Sanitary 1945 & 1952, Stormwater Site Plan Major roadway, greater typology than standard 9 6th Ave NW between 2nd St. SW & 1st SW infrastructure upgrades needed (Sanitary 1945 & 1952, Stormwater 1946 & 1980, Water 1936 & 2014) Site Plan Major roadway, greater typology than standard road $ 1,000,000 10 5th Ave NW between 3rd & 4th St NW Infrastructure to support future demand (Sanitary 1945, water 1887) No increased capacity for development $ 750,000 11 5th Ave NW between 2nd & 3rd St NW Infrastructure to support future demand (Sanitary 1945, water 1887) UPUI B3 increased capacity for development $ 750,000 12 5th Ave NW between 1st & 2nd St NW Infrastructure to support future demand (Sanitary 1945, water 1887) UPUI B3 & Site Plan increased capacity for development $ 750,000 Funding request Opt 1 Funding request Opt 2 - Recommended Funding request Opt 3 $ 750,000 $ 750,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 Original Funding Matrix 13 5th Ave NW between Center St W & 1st St NW demand (Sanitary 1945, Storm water 1946, water 1887) UPUI B2 increased capacity for development $ 500,000 14 4th Ave NW between 3rd St NW & Civic Center Dr infrastructure upgrades needed (Sanitary 1945, Stormwater 1980, Water 1928) No Major roadway, greater typology than standard road $ 1,000,000 15 4th Ave NW between 2nd & 3rd St NW infrastructure upgrades needed (Sanitary 1945, Water 1928) No typology than standard road $ 1,000,000 16 4th Ave NW between 1st & 2nd St NW infrastructure upgrades needed (Sanitary 1945, Stormwater 1986) No typology than standard $ 1,000,000 17 4th Ave NW between Center St W & 1st St NW infrastructure upgrades needed (Sanitary 1945, Stormwater 1986) UPUI B3 & Site Plan typology than standard road $ 1,000,000 4th Ave NW between Center St W & 1st St SW infrastructure upgrades needed (Sanitary 1945 & 2024, Stormwater Civil Pkg & Site Plan 4th Ave NW between 1st St SW & 2nd St SW infrastructure upgrades needed (Sanitary 1985, Stormwater 1985 & Civil Pkg & Site Plan 4th Ave SW between 2nd & 3rd St SW demand (1/2 block small Stormwater No increased capacity for 3rd Ave NW between 3rd St NW & Civic Center Dr small Sanitary line improvement No typology than standard 3rd Ave NW between 2nd & 3rd St NW small Sanitary line improvement No typology than standard 23 3rd Ave NW between 1st & 2nd St NW infrastructure upgrades needed (Sanitary 1984,Stormwater 1962, Water 1984) Civil Pkg D Major roadway, greater typology than standard road $ 1,000,000 24 3rd Ave NW between Center St W & 1st St NW infrastructure upgrades needed (Sanitary 1986,Stormwater 1963 &1971, Water 1986) Civil Pkg D Major roadway, greater typology than standard road $ 1,000,000 25 Intersection of 3rd Ave SW & Center St. W infrastructure upgrades needed (Sanitary 1945, Stormwater 1971, Site plan Major roadway, greater typology than standard road $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 Original Funding Matrix 26 3rd Ave SW from 1st SW to Center St. W infrastructure upgrades needed (Sanitary 1945 & 1971, Stormwater 1971, Water 1986) Civil Pkg & Site Plan Major roadway, greater typology than standard road 27 3rd Ave SW from 2nd St SW to 1st SW infrastructure upgrades needed (Sanitary 1954, Stormwater 1954, Water 2004) Civil Pkg & Site Plan Major roadway, greater typology than standard road 28 2nd Ave NW between 2nd St NW & Civic Center Dr demand (Sanitary 1945, Stormwater 1943, water 1916) Civil Pkg increased capacity for development $ 750,000 2nd Ave SW between 1st St SW & Center St W Infrastructure to support future demand (Sanitary 1952, Stormwater 1946, water 1999) No increased capacity for development, no need to 2nd Ave SW between 1st SW and 2nd St SW demand (Sanitary 1952, Stormwater Site Plan 1st Ave NW between 3rd St NW & Civic Center Dr improvement and infrastructure for future demand (small Stormwater Traffic study Major roadway, greater typology than standard 1st Ave NW between between 2nd & 3rd St NW improvement and infrastructure for future demand (small Stormwater Traffic study Major roadway, greater typology than standard 1st Ave NW between 1st & 2nd St NW ground improvements (Sanitary 2022, Minor storm replacement, Water replacement & upsizing has Traffic study Major roadway, greater typology than standard road, undersized water 34 1st Ave NW between Center St W & 1st St NW improvements only (Water 2022), minor storm and roadway only Traffic study typology than standard road $ 750,000 35 Intersection at 1st Ave NW & Center St W for future demand (Sanitary sewer 1946) Traffic study typology than standard road $ 500,000 36 1st Ave SW between 2nd & 3rd St. SW Enhanced corridor and infrastructure for future demand (Sanitary sewer 1948, water 1989 upsize to 12") No Major roadway, greater typology than standard road $ 1,500,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 500,000 $ 1,500,000 Original Funding Matrix 37 1st Ave SW between 3rd & 4th St. SW Enhanced corridor and infrastructure for future demand (Sanitary sewer 1948, stormwater 1948, water 1919 3 sections and upsizing) No Major roadway, greater typology than standard road $ 1,500,000 38 3rd St NW between 5th & 6th Ave NW Infrastructure to support future demand (Sanitary 1945, Stormwater 1945, water 1887 upsizing) No Regular standard with increased capacity for development $ 750,000 39 3rd St NW between 4th & 5th Ave NW demand (Sanitary 1945, water 1887 upsizing) UPUI B3 increased capacity for development $ 750,000 3rd St NW between 3rd & 4th Ave NW Infrastructure to support future demand (Sanitary 1945, Stormwater 1996 & 2001, water 1887 upsizing) UPUI B3 Regular standard with increased capacity for development 3rd St NW between 3rd Ave NW & Civic Center Drive Infrastructure to support future demand (Sanitary 1945, water upsizing 1999) No 3rd St NW between 2nd & 3rd Ave NW demand (Sanitary 1945, Stormwater 1945, water 1887 ) Mayo doing some UPUI B3 Regular standard with increased capacity for 2nd St NW between 5th & 6th Ave NW Infrastructure to support future demand (Sanitary 1947, Stormwater 1945, water 1887 need upsizing) UPUI B3 Regular standard with increased capacity for 2nd St NW between 2nd & 3rd Ave NW Infrastructure to support future demand (Sanitary 1984, Stormwater 1945 & 1983, Water 1999 & 2011) Civil pkg Regular standard with increased capacity for 44 1st St NW between 5th Ave NW & 6th Ave NW demand, street is bituminous pavement (water 1990 no replacement 12") UPUI & Site Plan Regular standard with increased capacity for development $ 750,000 1st St NW between 4th Ave NE & 5th Ave NW demand, street is bituminous UPUI & Site Plan increased capacity for 45b 1st St NW between 3rd Ave NW &4th Ave NE demand, street is bituminous pavement (water 1986, storm) Civil & Site Plan increased capacity for development $ 750,000 $ 1,500,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ 750,000 Original Funding Matrix 46 Center St W between 5th & 6th Ave NW Cycle track & Infrastructure to support future demand (Sanitary 2003, Stormwater 1984, Water 2003) Traffic study Regular standard with increased capacity for Center St W between 4th & 5th Ave NW Cycle track & Infrastructure to support future demand (Sanitary 2003, Stormwater 1984, Water 2003) Traffic study Regular standard with increased capacity for 48 Center St W between 3rd & 4th Ave NW support future demand (Sanitary 2003, Stormwater 1971 & 1986, Water 2003) Civil Pkg &Traffic study Regular standard with increased capacity for development 49 Center St W between 2nd & 3rd Ave NW Cycle track & Infrastructure to support future demand (Stormwater 1971 & 1986, Water 1986 & 2000) Civil Pkg &Traffic study Regular standard with increased capacity for development Center St W between 1st & 2nd Ave NW ground improvements some infrastructure for future demand (Sanitary sewer 1963, Stormwater 1954, water 1963 cast iron Traffic study Regular standard with increased capacity for 1st St SW between 5th& 6th Ave NW - North side only Enhanced corridor primarily above ground improvements some infrastructure for future demand (Sanitary sewer 1985 - Mayo, Site plan & Civil package B Major roadway, greater typology than standard 52 1st St SW between 4th & 5th Ave NW - North side only Enhanced corridor primarily above ground improvements some infrastructure for future demand Site plan & Civil package B Major roadway, greater typology than standard road $ 750,000 2nd St SW between 1st Ave SW & 6th Ave SW Mayo improvements St. NW and 5th St. NW from 2nd Ave NW to 4th Ave NW demand (Sanitary 1945 & 1954 water Civil pkg Kutzky park allocation $ 3,000,000 $ 8,000,000 $ 8,000,000 Revised total $ 2,871,000 $ 2,871,000 $ 2,871,000 4 AV E NW Current and Planned Project Areas 5 ST NW 1 A 2 2 ST NW 3 3 ST NW 4 10 38 39 11 42 14 21 40A 15 PUP Expansion 40 Oct. '27 28 22 43 Central Park 2 ST NW 5 12 16 23 1 ST NW W CENTER ST 44 West Logistics 6 (Feb. '29) 7 West 45A North Arrival (P1 - Oct. '26 P2 - Apr. '27) 47 45B 17 24 1 ST NW W CENTER ST 1 ST SW Facilities (Aug. '26) 8 9 51 52 Ozmun (2029-2030) 29 Waterman (2029-2030) 0 175 350 Feet 2025 Start J7858 - 2nd Ave SW 2026 Start J7857 - North Arrival ROW 2 ST SW South Parking 20 (Nov. '26) 2027 Start Date Exported: 2/24/2026 J8910 - 4th Ave between 2nd St & 3rd St H - 3rd & 4th Aves from W Center St to Civic Center Dr I - Mayo Package D & DMC Sanitary Sewer Upsizing J8908 - 6th Ave & Connected UPUI J8915 - Utility Power Underground Infrastructure (UPUI) Package B3 2028 Start D - 1st St SW to 4th Ave Tie-In 7 AV E NW 6 AV E SW 5 AV E SW 4 AV E SW 3 AV E SW 2 AV E SW 1 AV E NW 1 Schedule of Projects DMC Board Meeting Design (Funds are released and no further approval is needed.) 05/21/26 09/24/26 12/10/26 Q3 2027 Q4 2027 Q3 2028 Q4 2028 Total Total Estimated Design Cost DMC Board Meeting Construction (DMC approval is required before release of funds.) 05/21/26 09/24/26 12/10/26 Q3 2027 Q4 2027 Q3 2028 Q4 2028 Total Estimated Construction Cost Total