Rochester ponders $6 billion Mayo expansion

ROCHESTER - There are company towns, and then there's Rochester — where waiters make meal recommendations based on what sort of blood work you're having drawn at Mayo Clinic the next morning.

So when Mayo announced this month that it wants to spend billions of dollars to expand its facilities and remake this quietly prosperous city of 100,000 into a vibrant destination spot for Mayo's global clientele, that hit the top of Rochester's agenda, too. Mayo employs more than 34,000 people — one-third of the city's population. If you try to play the Mayo version of six degrees of separation with anyone in Rochester, it's going to be a pretty short game.

"I don't think anyone is more than one degree away from Mayo," said Tessa Leung, owner of Söntés, a wine bar and tapas restaurant in Rochester. Leung's mother worked at Mayo and Leung herself spent years as a nurse in Mayo's bone marrow transplant unit before launching a new career as a chef. Now her former patients and colleagues browse her wine list and seasonal small plates menu. In Rochester, she said, Mayo "is a way of life."

Mayo wants to spend $3.5 billion over the next two decades, doubling the size of a campus that already takes up large swaths of downtown Rochester. It also plans to leverage another $2 billion in private investments to turn the rest of Rochester into a destination city in its own right, bristling with high-quality hotels, restaurants, sports and entertainment facilities and amenities.

The catch? Mayo wants Minnesota to contribute more than $500 million to fund the infrastructure improvements needed to kick-start such an expansion. That's on par with what the state contributed to the new Vikings stadium.

"When I first heard that figure, I gasped. 'Are you kidding me? A [$585] million taxpayer handout?' " said Fran Bradley, a former state representative and fiscal conservative who has butted heads with Mayo on other issues — but not this one. "I can't be opposed to it. I think the idea is way too creative."

Hospital patients are to Rochester what tourists in mouse ears are to Orlando. The town has a symbiotic, century-old relationship with Mayo that has become part of the culture here. Leung said that when she was little and saw patients around town, "It was never, 'Don't stare,'" she said. "It was, 'They're here to get help.' People just take good care of people here."

By some estimates, Mayo is responsible for $1.6 billion of economic activity in the wider community and the community, in turn, eagerly gives back — whether that means stopping with a smile to give directions to a Saudi visitor trying to navigate downtown skyways, or cheering while Mayo makes plans to remake the city's entire downtown.

"I love this city with all my heart," said Dr. Bradley Narr, a Twin Cities transplant and chair of Mayo's Department of Anesthesiology.

Competing with the bigs

Nestled along the south fork of the Zumbro River, Rochester started life in the mid-1800s as a stagecoach stop between Minneapolis and Dubuque, Iowa. Since then it has grown into a small, stable city that, due largely to Mayo, has long punched above its weight. Though its population is small, Rochester draws 2.75 million visitors a year. A well-skilled workforce in prime earning years means that median family income here hovers just under $75,000 a year. Poverty and crime rates are low, half the households are married and more than 60 percent of the population is under 45.

Mayo grew up right alongside the city. When a tornado leveled a third of the town in 1883, Doctors William and Charles Mayo set up a temporary hospital in a dance hall. They built a reputation for top-quality, innovative care that for years has landed Mayo at the top of world lists for best health care.

But the city where Narr raised his family isn't necessarily one that appeals to the top-flight talent Mayo needs to recruit, or that makes it competitive with first-tier destination medical centers like the Cleveland Clinic or Johns Hopkins, both located in urban areas with far more amenities than Rochester offers. Mayo's challenge, Narr said, "is to create something beyond" its walls that patients and employees will want to visit.

"It's a lot of fun to practice medicine here," he said, but "we're a little bit of a one-horse town." Narr worries that his 130 first-rate anesthesiologists — some of the best in the country — "absolutely" have options. He doesn't want to lose a promising candidate "because somebody on the coast offered her a better balance of work/life."

Rochester has been working to shed its slightly stodgy image. Cutting-edge restaurants and galleries are popping up downtown. In the summer, the streets fill with music and art for Thursdays on First. In the winter, downtown now features the Midwest's largest ice bar. The Rochester Civic Theater just wrapped its February production of the Tony-nominated "Shadowlands."

"This is a city with its own pulse, its own vibrancy," said Gregory Stavrou, the theater's executive director, who left Minneapolis five years ago for Rochester. "Our challenge is, how can we integrate the arts into a community that is unabashedly about the sciences?" Like almost every other nonprofit in town, Stavrou's theater gets a helping hand from Mayo, which regularly pumps millions into community life and charities.

"Mayo supports every arts organization in this town that I'm aware of," Stavrou said. "That's what makes this town very cool, the growth of arts here." He's got his fingers crossed that a fresh infusion would allow the local arts scene to grow along with Mayo.

The state's share, which would come from future tax dollars, would go to upgrade roads, sewers and other facilities to make room for the Mayo expansion and the hotels and businesses expected to spring up around it. Mayo would not get the money upfront, but rather would have to meet a series of growth benchmarks before it could tap state funds.

$10 for $1 investment

The fact that Mayo plans to front $10 of its own money for every $1 from the state goes a long way to easing some of Bradley's concerns, though he remains leery of the unelected Development Authority that would oversee the so-called Destination Medical Center expansion. Right now, Mayo's plans include giving the Development Authority the power to have buildings condemned if they block expansion.

The Minnesota Legislature has just begun working through Mayo's proposal. So far, the main objection comes from lawmakers worried about setting a precedent for future corporate development.

Some communities might take offense at the suggestion that it would take billions of dollars to sufficiently gussy up their town for outsiders. Other communities might fear that such a massive makeover would change the character of their town.

Not Rochester.

"I think most people understand that as Mayo goes, so goes Rochester," said state Sen. Dave Senjem, a Republican who worked for Mayo more than 40 years. "Mayo is so dominantly Rochester, I don't think it changes. I think it just gets better."

Jennifer Brooks • 651-925-5049