What’s in Rochester’s Destination Medical Center budget for 2025?

ROCHESTER — Destination Medical Center (DMC) is set to spend about $38.5 million downtown next year, with a majority going toward major work with an ongoing bus rapid transit line and Sixth Street bridge projects. Yet DMC officials are looking toward future work with downtown businesses.

The DMC Board on Thursday solidified the next year’s worth of spending on downtown infrastructure. The 2025 budget is par for the course for the center, which typically spends about $40 million or so annually.

The Minnesota Legislature approved $585 million in 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 DMC is working toward next year:

DMC officials spent $1 million in ventilation and infrastructure upgrades in 2024, but that money came with a caveat — operator Threshold Arts needed to survey the building for future issues if it wanted to receive additional funding. This latest money will cover the cost of that survey.

Mayo Clinic’s upcoming $5 billion downtown expansion is set to start in earnest next year as buildings are demolished over the next few months. DMC is setting aside money to help deal with traffic snafus from all the construction, including signs and other strategies.

Mayo Clinic isn’t the only entity in town with a big project. Rochester’s bus rapid transit line along 2nd Street SW also is underway, with construction expected to start next spring to create a 2.8-mile track for buses to travel every 5 to 10 minutes. The project also will include bus stations and a planned mixed-use area for businesses and apartments on the west end, dubbed the West Transit Village.

DMC routinely considers requests from real estate developers and downtown businesses. Its corporate board on Thursday rejected a developer’s funding request for a proposed apartment complex but approved $85,000 for a downtown historic property preservation. This pool of money will go toward other redevelopment opportunities that crop up next year, but only with the DMC Board’s and the Rochester City Council’s approval.

The upcoming Sixth Street SW. bridge work and flood control system is the first part of Rochester’s goal to transform land near the Zumbro River into a waterfront district. The bridge itself will connect downtown to southeast Rochester, opening up more opportunities for commercial and multifamily residential development in downtown, as well as housing nearby. DMC is covering the cost of reconfiguring the area’s flood control and sewer infrastructure near the bridge to make way for future projects.

It takes a lot to make a $5 billion medical center expansion work. DMC funded a sewer bypass along Third Avenue SW. this year, but more will be needed to figure out sewer and water impacts over the next few years. DMC has budgeted $1 million for planning and design work in 2025, but officials say the figure is more of a placeholder as work on infrastructure progresses. The money won’t go toward specific projects, though — they’ll first have to come before the DMC board for approval.

Similar to the Mayo Clinic expansion, it’s going to take money to plan, design and schedule sewer work at the West Transit Village. DMC budgeted another $1 million for that, but it’s another placeholder as the project gets underway.

All that planning, application reviews and further work bringing in more development to downtown Rochester comes with a cost. DMC’s operating budget for 2025 is comparable to previous budgets; the group budgeted about $5 million for this year. About $100,000 of that comes from city administrative costs to help DMC and act as its fiscal agent, while the DMC Economic Development Agency — the staff who work with locals on projects as well as enticing biomedical and tech businesses to come to Rochester — gets about $3 million. DMC also covers city-related costs, salaries and programs, such as the downtown historical preservation program, to the tune of about $1.4 million.