Mayo complex is early test of Rochester's big plans

ROCHESTER – The ribbon-cutting and official opening is still months away, but a new research building rising here within blocks of the Mayo Clinic has already filled most of its available space.

Normally a routine matter for any new commercial development, finding tenants for the building known as One Discovery Square stands as an early test of Mayo's multibillion-dollar effort to create a new economy in Rochester.

It's here, in a 16-block district dubbed Discovery Square, that Mayo wants to mix cutting-edge research, deep-pocketed investors and visionary entrepreneurs to help Mayo doctors dream up the next medical miracle.

That starts with One Discovery Square and whoever ends up working there.

"We're at a very important point in the evolution of Discovery Square," said Jim Rogers, chairman of Mayo's department of business development.

The $35 million project won't officially open until April 1 of next year, with a ribbon-­cutting planned for next summer. But so far, about 60 percent of the 90,000-square-foot building is under lease, and another 30 to 35 percent is spoken for, said Jeremy Jacobs, director of real estate development for Golden Valley-based M.A. Mortenson Co.

"We've got just a few percentage points of the building that is truly available," Jacobs said.

The Mayo Clinic itself will be an anchor tenant, along with the University of Minnesota, Rochester. A third tenant, Wisconsin-based software company Epic, was previously hired by Mayo to revamp its electronic health care records.

At least three more companies have signed up for space at One Discovery Square, but their names can't be shared yet, Jacobs said. He expects to make announcements in coming weeks.

"We are looking for synergistic companies," he said. "We've not yet turned anyone away, but we have spent a lot of time refining their use and research to the point where it makes sense for us and everyone else to have them there."

It's hard to overstate just how important Discovery Square is to the future success of the Mayo Clinic and its massive expansion known as Destination Medical Center, a project that blends $5.6 billion in private investment with $585 million in public money to fuel growth over 20 years.

Billed as a needed step to keep Mayo competitive, the DMC plan was approved by the state Legislature in 2013. The plan promises to add some 30,000 jobs in Rochester, dramatically increasing the city's population and adding billions in tax revenue.

Rochester, with a population of nearly 112,000, has already seen sharp growth, adding 26,101 residents between 2000 and 2015.

The DMC vision to remake Rochester into a destination in its own right contains plans for sprucing up public spaces and making the city function better, but Discovery Square's role as a biotech hub and economic engine should, according to the DMC plan, drive innovation and investment at the Mayo Clinic for generations to come.

With Mayo Clinic as an anchor, One Discovery Square will have programs in imaging, augmented human intelligence, regenerative medicine and advanced diagnostics, according to early plans.

Businesses operating there will also have access to the Mayo Clinic Ventures staff for reviews of Mayo's intellectual property portfolio and core lab services that Mayo has available for its own clinicians.

"We want the best and brightest to be part of the ecosystem, to work shoulder-to-shoulder with our clinicians and researchers," Rogers said. "Up until now we really didn't have a space for that."

Designed by RSP Architects and HOK, One Discovery Square has unusual features to accommodate researchers, including vibration mitigation systems so highly sensitive equipment can be used without disruption.

Ceiling heights between 14½ feet and 16 feet make it easier to bring in specialty equipment, and an abundance of shaft spaces running up and down the building will allow for robust HVAC units, air filtration systems and other specialty equipment needed for labs, Jacobs said.

The building also contains a ground-level cafe and collaborative spaces.

It's an uncommon type of building for Minnesota, said Frank Jaskulke, a vice president of Medical Alley Association.

"You don't just go into any building and set up a lab. There's a lot of dedicated infrastructure that needs to be in place," he said. Features from deionized water to air filtration systems could be required. "If you're doing research in there you need the air to be super clean."

The launch of One Discovery Square will come amid an ever-more-competitive health care field, Jaskulke said.

Five years ago, when the DMC plan was approved, the state may have viewed the East and West coasts as the big competition, but the industry has grown rapidly, and places such as Houston, Austin and Nashville are emerging as new competitors.

Not only have those cities developed as nascent hubs for health care innovation, but the world's leading tech companies have plowed massive investments into the field.

Since 2013, Apple has introduced a watch with an electrocardiogram feature; Google has invested $375 million into the health care startup Oscar Health; and virtually all of the major tech companies have entered health care with investments in telemedicine, biotechnology, health insurance and other areas.

"If DMC was important when it was initiated, I think it's more important now because the competition around the U.S. and the world to capture the future of health care is bigger," Jaskulke said.

Jamie Sundsbak, the community manager at Collider Coworking, a rentable workspace in Rochester, said he sees One Discovery Square as a needed piece to push the DMC plan forward.

"When One Discovery Square opens, I really think that will really be the shining beacon that people will point to," he said. "That will be the building that will start this machine in motion."

Matt McKinney • 612-217-1747