Rochester’s DMC at 10: Billions invested, jobs created, but progress is uneven 43652s

If the residents of Rochester tried singing happy birthday to its downtown glow-up, they might get drowned out by the sounds of jackhammers and cement trucks.  And instead of birthday candles, the city is decorated with orange construction cones —hundreds upon hundreds of them. Rochester is celebrating a milestone this month. The city’s Destination Medical Center is ten years old. It’s a massive economic development effort to transform the area around the home of Mayo Clinic. Destination Medical Center, or DMC, is the largest public-private partnership in the state’s history. At the halfway point it's attracted $1.8 billion in private investment in dozens of projects, including those under construction right now. Its aim is to reshape and invigorate Rochester's downtown landscape and reputation. “I really didn’t pay much attention to Rochester (before). It wasn’t a go-to place. It wasn’t a place I came to visit,” said Patrick Seeb, who became DMC’s executive director in 2021, and is now Rochester’s biggest cheerleader. “We are attracting developers and investors from around the region,” Seeb added.  “So Twin Cities investors who hadn’t paid much attention to Rochester are doing projects in Rochester.” Patrick Seeb, executive director of the Destination Medical Center Economic Development Agency, introduces discussion at a downtown Rochester task force work session on Feb. 27.Ken Klotzbach for MPR NewsMore than Mayo ClinicSeeb said the construction that’s torn up Rochester’s downtown will continue for a while.  But he says it’s a sign that the project is succeeding — that Rochester is becoming more lively for patients and residents, developing new housing for health care and related industry workers, and diversifying the region’s economy. “I think most importantly is the energy we’re seeing around the innovation development and the interest of innovators who really didn’t understand the opportunity to be associated with Mayo Clinic and how powerful that is,” Seeb said. State lawmakers ed legislation creating DMC in 2013 and it officially launched two years later, after Mayo Clinic leveraged its reputation as Minnesota’s largest employer and a globally known medical center to get a massive public-private investment in the community.  Mayo and DMC’s board committed to attracting more than $5 billion in private investment to develop Rochester’s downtown over 20 years. In return, city, county and state taxpayers are kicking in nearly $600 million in public funding to improve the city's downtown infrastructure.  At its half-way point, DMC is on its way to meeting those investment goals, and while much of that money has come from Mayo Clinic, other private developers have invested millions into building new hotels for visiting patients and their families, and new housing for health care industry employees. There are also new shops, restaurants, and several new buildings dedicated to med-tech start-ups.  In addition, Mayo Clinic is constructing a $5 billion expansion of its downtown campus, which wasn’t part of the original plan and is now giving the whole DMC endeavor a big boost.  DMC officials said the construction projects, new business ventures, restaurants, and hotels have created about 17,500 jobs - that’s about half of the project’s 20-year hiring goal. The city said it is on track to generate $7.5 billion in net new tax revenue by 2050. A pandemic setbackBut DMC has had setbacks too. The COVID-19 pandemic was unkind to cities everywhere and Rochester has been no exception. Investment dipped during COVID. And with many people still working remotely, some new store fronts and commercial spaces remain empty years after being built. Former Minneapolis Mayor R.T. Rybak said without DMC, it could be worse. He served on DMC’s board for its first decade.  “If the state hadn’t done Destination Medical Center, would Rochester have been the place where Mayo expanded?” Rybak asked. “Maybe a little, (but) certainly not to the tune of $5 billion.” “You would have seen the downtown businesses, a few more of those would close. You would have not seen some of the housing. You wouldn't have seen the hotels,” Rybak said. “And I think more than anything else, there would not have been this sense that individual investors can put something into Rochester and know that the city will continue to grow.” The site of potential workforce housing in downtown Rochester. The developer says that local officials have pushed back on her project even though it meets the goals of Destination Medical Center, a 20 year project to transform the city.Catharine Richert | MPR NewsBut developer Brenda Quaye said there’s still not enough housing to meet demand. She's been trying to get the city council to green light one such project on blighted downtown property. She said the city wants her to build affordable housing, while her plan would court workers who’d pay somewhat higher rents.  “We agree that there’s a need for affordable housing,” Quaye said. “But there’s also a need to house the people who are MRI technicians and RNs and residents and younger people who are working at the Mayo Clinic, who want to live in downtown Rochester and make it a vibrant, 24-hour experience.” And executive director Seeb acknowledged that the DMC needs to do more to attract and keep employers that aren't Mayo Clinic — such as new medical and biotech companies, and technology and professional services firms — and their workers.  He pointed to a project the DMC board approved just this week: a new lab space for businesses serving the healthcare industry. Hopefully, he said, those spin-offs will be able to incubate, develop and thrive in Rochester so they’ll want to stay for the long term. 382e3h