Mortenson set to break ground on second Destination Medical Center building in Rochester

Mortenson Co. is breaking ground this month on phase two of the Destination Medical Center's Discovery Square project in Rochester.

The five-story, 125,000-square-foot structure is expected to open in mid-2022, following the opening of One Discovery Square in 2019. The buildings are designed to help foster life-science research and innovation in a city well known for its medical research and patient care.

"Discovery Square 2" is intended to accelerate the translation of medical research "from bench to bedside" and will feature tech-forward and flexible tenant spaces, said Mortenson development executive Brent Webb.

"Developing a health care innovation campus with this facility increases the likelihood of and opportunity for collaboration between researchers, educators, clinicians, entrepreneurs and others," he said.

The new building, designed by RSP Architects, will sit adjacent to and be linked with One Discovery Square. Both buildings will be inside the 16-block Discovery Square subdistrict.

Discovery Square is part of the Destination Medical Center (DMC) redevelopment around Mayo Clinic, the largest public-private initiative being developed in the state.

The DMC attracted nearly $280 million in private development funds last year and features six subdistricts, including the Discovery Square subdistrict.

The redevelopment plan as a whole received a setback at the beginning of the month when Mayo Clinic halted plans to expand its signature Gonda Building.

Destination Medical Center's Economic Development Director Patrick Seeb said the Gonda building was the only part of the massive project that has been paused because of the pandemic.

Beyond that, new housing and a multi-block public walkway has been or is in being built in the area. And now, DMC organizers are ready to begin working with Mortenson on developing a third Discovery Square Building, Seeb said.

City officials believe the Discovery Square project is capable of keeping industry in downtown Rochester ticking along despite the pandemic's economic fallout.

"The addition of Discovery Square 2 reinforces Rochester's position as a global leader in health and a destination city for innovators and entrepreneurs," said Lisa Clarke, executive director of the DMC Economic Development Agency.

The One Discovery Square project that opened last year "has been a stunning success" and is more than 90% occupied with tenants including The Mayo Clinic, Boston Scientific, Epic, Philips and the University of Minnesota Rochester, Seeb said.

Colliers International will serve as the second building's leasing agent and oversee tenant recruitment along with Mortenson and the DMC Economic Development Agency.

The agency is charged with overseeing a multibillion-dollar and 20-year plan to transform Rochester into even more of a global destination for health and wellness.

The project is attracting a host of new developers, investors and entrepreneurs who also focus on health and medical concerns, the agency said.

Once construction is completed, the Discovery Square 2 building will be the 11th structure in the state and the first in Rochester designed for "wired certification," a commercial real estate rating signaling that a building has superior technology and strong internet capabilities.

If the rest of the DMC plan is equally successful, the Discovery Square strategy should serve as catalysts for both economic development and the recruitment of new businesses and talent to Rochester, Seeb said. If correct, it will mark a big conversion.

About five years ago, the Discovery Square subdistrict was best known for its surface parking lots.

Clarke noted that Discovery Square 2's location — near the corner of SW. 4th Street and SW. 2nd Avenue — puts it close to the Mayo Clinic campus, near the Gonda Building and the Mayo Clinic's Guggenheim, Hilton and Stabile Buildings.

The project is also within walking distance of Rochester's historic Southwest neighborhood and downtown shops, restaurants, bars, and coffee shops.

DMC organizers are renovating the public Peace Plaza on Second Street and First Avenue.