What's in Destination Medical Center's 2024 budget for Rochester?

The decade-old Destination Medical Center (DMC) on Thursday unveiled plans to spend $40 million in 2024 on everything from sewers and bridges to theater renovations and bus routes.

A $40 million annual budget is par for the initiative's mission to turn Rochester into an international medical hub. Next year marks a milestone: By the end of 2024, DMC will have spent close to $200 million in local and state funding on economic development in downtown Med City.

The Minnesota Legislature approved $585 million in city, county and state funding for DMC through 2033. Most of its annual budget comes from state infrastructure funds, while its operating budget mainly comes from city revenue.

Here's what's on deck for DMC:

DMC has bankrolled renovations at downtown Rochester's former vaudeville venue and cinema since Threshold Arts took it over in 2022. The theater is set for ventilation, heating and air conditioning upgrades next year.

Rochester's multimillion-dollar plan to create a 5.5-acre waterfront district needs a little work developing connections to the rest of downtown, as well as Zumbro River access. DMC is chipping in the architectural design funding to kickstart the process.

One of two transit hubs for an eventual bus rapid transit line, St. Marys Place (located next to St. Marys Hospital just off Highway 52), has been in the works for seven years. Project design kicks off in 2024 and the hub will cost about $4 million.

Speaking of rapid transit, DMC's kicking in serious cash to make the $140 million bus circulator route happen over the next few years. Federal money covers most of the cost but DMC is set to pay for more than $28 million by the end of 2026, when the rapid transit line (featuring reworked roadways, transit stops and transit hubs) goes online.

When redevelopment opportunities come — think housing or biomedical space —DMC is ready. The group plans $10 million toward those kind of unplanned redevelopment chances next year. The money isn't exactly up for grabs – both DMC and the Rochester City Council have to sign off on using this funding pool.

Rochester has big plans for the southeast side of town, including a new bridge over the Zumbro River. The bridge is set to be built over the next two years, along with some trail connections and nearby flood control work.

The city is replacing heating and cooling systems with geothermal power in several public buildings over the next year or so, with some of the work already started at the Olmsted County Government Center. Rochester officials hope private buildings will connect to the system, to offset energy costs and make for greener power.

DMC is funding some of the groundwork for Mayo Clinic's upcoming expansion by diverting sewer flows from Second Street to Fourth Street, which will help add sewer capacity in the future.

It costs money to bring in billions of dollars in development. Administrative costs for DMC projects alone are about $100,000 annually, while the DMC Economic Development Agency (the staff who apply for funding, travel across the U.S., work on projects and entice businesses to come to Rochester) gets about $2.9 million in 2024. DMC also covers salaries and benefits for employees who work on DMC-related projects – about $1.16 million next year.