Rochester and private investors will have to dig deeper into their own pockets before the state puts one penny toward Mayo Clinic's multibillion- dollar hometown makeover, lawmakers said Monday.
The Senate Taxes Committee presented a pared-down version of the multimillion-dollar Mayo request Monday, similar to one the House Taxes Committee approved last week amid intensified lobbying by the Rochester-based health care giant.
Mayo had asked the state for $585 million for roads and infrastructure to support a $5 billion plan that would use the clinic's own funds, along with private investment, to expand its Rochester campus and transform the surrounding downtown. State Sen. Dave Senjem, R-Rochester, called the "Destination Medical Center" plans "the largest economic development project I've been able to find anywhere, any place, any state."
Mayo's bill hasn't had an easy trip through the Legislature. The House and Senate tax committees have drastically rewritten it. The House cut the state's share of the project cost to $338 million and shifted the rest of the cost onto the local community. The Senate wants the community and private investors to pay $50 million more than the House proposed — and to do so before state funds start flowing to the project.
With the session entering its final weeks, Mayo is ramping up its lobbying efforts. Of its 11 registered lobbyists, seven were hired this year — and two this week.
"We really realized we are on a very tight timeline for legislative review and passage," said lobbyist Lisa Clarke, who is spearheading Mayo's efforts.
Lawmakers have only until mid-May to sign off on the budget bills, pass sweeping new changes in health care policy and, possibly, pass another $800 million bonding bill. It was a busy year before Mayo announced its plans.
"This is a huge lift for one legislative session," said state Rep. Tina Liebling, DFL-Rochester, whose district includes the main Mayo campus. "It's surprising how well it's gone, given that."
The fact that the bill is still on track to pass, with most of the money Mayo originally requested, may have less to do with Mayo's lobbying than with Mayo itself.
"People come up to me all the time — and I'm talking about legislators — and they say, 'I was in Rochester, I had a relative at Mayo.' Mayo has tremendous affection from people all over this state," said Liebling.
Most lawmakers are keenly aware that Mayo is not only the state's largest private employer, but a state icon in its own right. Mayo CEO John Noseworthy recently pointed out that there are "49 states" that would love to welcome Mayo, if Minnesota doesn't dig deep for this project, a statement that many state lawmakers found provocative but also acknowledged as probably true.
Mayo wants to go head-to-head with other premier national health centers like the Cleveland Clinic and Johns Hopkins in Baltimore. To do that, the clinic is offering to double the size of its Rochester campus, in tandem with a multibillion-dollar overhaul of downtown Rochester, in the hope of turning the city into a destination in its own right, full of glittering hotels, restaurants, theaters and cultural attractions.
Clinic officials point out that other national-caliber health centers are expanding with generous help from their home states.
Ohio invested $188.4 million in a rapid transit bus line to link the Cleveland Clinic to the rest of the "health-tech" corridor in the region, and has pumped $70 million into clinic improvement projects since 2004.
Johns Hopkins is in the midst of a massive renovation of its facilities and neighborhoods that surround it. The $1.8 billion project received $233 million from state, local and federal sources, Mayo notes.
Big bump for lobbying
Mayo spent about two years planning its big legislative request.
State records show that Mayo spent $280,000 on lobbying in 2012, compared with $180,000 the previous year. The 11 registered lobbyists on its roster compare with three that Mayo registered with the state two years earlier.
Even so, many lawmakers were caught off guard when the health care giant rolled out its request in late January.
Last week, Senate Taxes Chair Rod Skoe, DFL-Clearbook, said the bill might have gotten a warmer reception if Mayo had looped in lawmakers earlier.
"To be honest, the original proposal hadn't involved the Legislature as much as it should have," Skoe said. Even Rochester-area lawmakers said they didn't find out about the master plan until last fall.
Clarke noted that Mayo's lobbying budget pales beside other recent high-profile lobbying campaigns. The Minnesota Vikings employed 17 different lobbyists at various points of their decade-long campaign for a new football stadium, and spent more than $4.3 million on lobbying between 2006 and 2012. The Vikings reported spending $610,000 on lobbying in 2012 and $840,000 the year before.
"It is a rather modest group of lobbyists," said Clarke. "Traditionally, Mayo has one full-time employee devoted to lobbying in Minnesota" along with a few outside contract lobbyists.
In additional to their longtime lobbying firm, Winthrop and Weinstine, they also brought in contractors from Faegre Baker Daniels, North State Advisers and health care consultants Hammes Co.