DMC has spent or earmarked nearly $220M on downtown Rochester

ROCHESTER - Destination Medical Center, the state-funded initiative to turn Rochester into an international medical hub, has spent or designated close to $220 million to improve the downtown area over the past eight years.

Most of that money — about $135 million — has come from state general infrastructure funding or transit aid, according to an annual legislative report DMC officials reviewed Thursday with the agency’s corporate board of directors.

The remaining money comes mostly from Rochester, while Olmsted County has kicked in close to $20 million.

DMC is on track to receive even more money from the state this year, thanks to significant private investments in the area. The agency is set to receive another $30 million in general funding from the state this year, the maximum annual amount designated by the Legislature when it created DMC in 2013.

DMC is also on track to meet its goal of $5.6 billion in private development by 2033, mainly due to Mayo Clinic’s downtown Rochester expansion over the next few years. DMC has already garnered $1.5 billion as of 2023.

DMC Executive Director Patrick Seeb pointed to Mayo’s expansion — the biggest hospital development in state history — as the result of years of work DMC has done to attract biomedical businesses to Rochester.

“That’s what we were established for, is to create the environment where Mayo Clinic could see this would be a place to grow,” Seeb said.

Mayo was the driving factor behind DMC’s creation, encouraging lawmakers in 2013 to fund its $585 million request to transform Rochester and threatening to look elsewhere to grow if Minnesota didn’t step in.

DMC is set to spend about $40 million in 2024, a quarter of which is set aside from projects that crop up during the year — such as a request from the city of Rochester to provide financial support for building owners in a new downtown historic commercial district.

The Rochester City Council approved the district earlier this month, largely on the promise that DMC officials would offer financial aid to property owners affected by the extra costs and projected tax increases as part of the new district.

“This district is providing a community benefit and they are disproportionately burdened,” Council President Brooke Carlson said.

Seeb said DMC officials will present a funding plan before the corporate board at its May meeting.

At the same time, DMC could present plans for expanding housing help as board members and city officials worry over Rochester’s lack of housing.

Former Minneapolis Mayor R.T. Rybak, a DMC corporate board member, said he was in favor of using DMC and larger city tools such as tax-increment financing to incentivize more development as Mayo looks to attract thousands of employees over the next five years.

“I have not advocated using public money to support market-rate housing. This may actually be a moment to do that,” Rybak said.

DMC officials also outlined the agency’s role in the campaign for federal grant dollars to make Minnesota a medical technology hub. DMC will oversee sharing Mayo Clinic research data with members of the Minnesota MedTech 3.0 consortium as it competes for tens of millions of dollars this year with other states looking to create tech centers of their own.