ROCHESTER – The Mayo Clinic and private investors lured by the state’s largest-ever economic development project spent another $131 million last year remaking downtown Rochester as work continued or began on Mayo buildings, a towering hotel, a key research building, retail space, parking and public amenities.
The sum invested was slightly less than the year before, when $145 million poured into the city, a drop that officials attributed to the timing of major construction projects rather than a slowdown in the growth of the 20-year Destination Medical Center plan that was launched in 2013.
The $5.6 billion DMC plan blends private investment with public dollars to dramatically grow the city as the Mayo Clinic adds staff and expands its campus to retain its global brand.
The private investments will trigger the release of about $7.3 million in taxpayer funds this year, just some of the $585 million in public money that the Legislature has pledged to provide to the city to help pay for infrastructure related to the development.
Lisa Clarke, executive director of the Destination Medical Center Economic Development Agency, said the rising level of private investment in Rochester has gone according to plan.
“I’m nothing but encouraged by the pace of private investment,” she said.
The latest investment figures were announced at a meeting in the city’s newly renovated civic center. On city blocks nearby, construction cranes and hard-hatted crews, now a common sight downtown, worked on DMC projects, including an $84 million Hilton Hotel and a $16 million research facility in Discovery Square, a 16-block area of Rochester where Mayo doctors and entrepreneurs will brainstorm on the next generation of health care technology.
The two projects accounted for the bulk of private investment in the DMC last year, but some of the others included two four-story apartment buildings, a new ice cream shop, new office space, and renovations to offices and condominiums.
The non-Mayo private investment totaled $44.7 million last year, a 16 percent increase from the previous year’s investment of $38.1 million.
The Mayo Clinic, meanwhile, made $86.4 million in DMC investments last year, a drop from $107 million a year earlier.
Doug Holtan, chairman of Mayo’s Department of Facilities and Support Services, said the long-term investment trend remains positive, with a $200 million, four-year project approved last year by Mayo’s board of trustees for the Mayo Clinic Hospital, St. Marys Campus.
Mayo has said it plans to invest $3.5 billion in its Rochester campus over the 20-year life of the DMC.
The hospital has defended use of public money to help pay for infrastructure related to the development by saying it will more than pay for itself with the anticipated increased tax revenue from the city’s growth. City tax revenue has grown sharply in recent years, from $61.8 million in 2012 to $82.7 million in 2016, according to the DMC EDA office. Some of that growth is from increases in the local sales tax and lodging tax.
City Council Member Michael Wojcik said Thursday that he’s pleased with the pace of Mayo’s and Rochester’s expansion.
“If anything, the pace is faster than I expected,” he said.