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House offers scaled-back Mayo 'Plan B'

Omnibus tax bill shifts more of the cost on to Rochester and Olmsted County, scales back state share from $585 to $338.

April 16, 2013 at 2:53AM

Before the state puts up millions to support the Mayo Clinic's makeover of downtown Rochester, the Rochester area is going to have to put up millions of dollars of its own.

The House Taxes Committee rewrote and pared down Mayo's $585 million request to the state in its new omnibus tax bill. The new version scales the state's share of the project down to $338 and shifts the rest of the price tag onto the local community.

It scraps the convoluted tax capture plan Mayo proposed and cuts the money state Rochester in half, from $75 million to $30 million a year for the next three decades.

Despite the changes, Mayo will still be getting most of the money it wanted, albeit from different sources. In a statement, clinic officials called the new version "strong and consistent with the goals and principles we set forth at the beginning of this process."

Rochester and Olmsted County may be less pleased. The new version scales the state's share of the project down and asked the local community to put up $128 million of its own. Those funds will build new roads and other infrastructure around Mayo's planned multi-billion dollar expansion and renovation in downtown Rochester.

"It's a big ask of the city," said state Rep. Kim Norton, DFL-Rochester, who sponsored the original version of the Mayo bill that ran into staunch opposition in the tax committee, where lawmakers balked at its size and proposed financing.

The bill offers the local community a buffet of tax options they could adopt, or not, as they choose – without taking it to the voters first – including liquor, lodging, entertainment, local option sales tax or property taxes. The new version also gives the city, not the state, oversight of the board that will monitor the Destination Medical Center development.

"At first it will be a little bit of sticker shock, but I think they'll recognize they can get there pretty quickly," said House Taxes Chairwoman Ann Lenczewski, DFL-Bloomington. "We asked them to raise $128, we gave them tools to raise significantly more than that."

But since the people of Rochester will be the biggest beneficiaries of the Mayo bill, Lenczewski said, it's only fair that they share the load.

"We heard a lot of people saying 'This is great deal and everyone should vote yes' when they had no idea what the bill did and I think they had no idea (Mayo was) asking for a $75 million a year commitment from the state for 30 years," Lenczewski said. "We're less than half that now."

As the House rolled out its revised Mayo bill, the Senate tax committee is still working on its own overhaul of the Mayo request.

Mayo spokesman Karl Oestreich issued a statement in response to the new House version: "We are grateful to the Chairwoman, members of the Committee and chief author Norton for all of their hard work on this bill. We are very pleased that the DMC financing plan is strong and consistent with the goals and principles we set forth at the beginning of this process. While there is still work to be done on finalizing details and aligning the House and Senate versions of the revised plan, momentum for DMC continues to build toward finding the right solution this session. We will need some time to review all of the elements of the proposed bill, and will continue to work with our legislative leaders and our partners, the city and county."