Blowback at the Capitol sends Mayo back to drawing board

  • Article by: JENNIFER BROOKS , Star Tribune
  • Updated: April 10, 2013 - 10:47 PM

Legislators debating $500 million in aid take aim at plan, CEO, Rochester.

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Rep. John Lesch objected to Mayo CEO John Noseworthy's 49-states remark, calling it "dumb, dumb, dumb" during Wednesday's House Tax Committee discussion of Mayo's expansion plans.

Photo: Glen Stubbe, Star Tribune

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The Mayo Clinic had a rough Wednesday at the Minnesota House, where legislators blasted the company’s CEO, insulted its hometown and nearly derailed debate on a $500 million bill over a $5 million local tax spat.

Now it’s back to the drawing board for Mayo and its supporters, who are seeking $585 million from the state to support a planned $3 billion makeover of downtown Rochester. The fact that Rochester needs a $3 billion makeover to make it an appealing destination for doctors or their critically ill patients was the one point that united all sides in the debate.

State Rep. Kim Norton, a Rochester DFLer who sponsored the Mayo bill, promised to return next week with a new version —“Plan B” — to address concerns legislators have raised about the cost, scope and financing of Mayo’s plan.

Norton’s bill relies on 30 years’ worth of state and local tax revenue to help build the roads, bridges and infrastructure that would support the new hotels, restaurants and civic improvements Mayo hopes to draw to Rochester. A retooled version is likely to shift more of the tax burden to the local community.

“We hope it will be something you like better,” Norton said “Forty-nine states would love to have the Mayo Clinic. We’re lucky to be the one that does. Hopefully we can keep it here.”

The “49 states” line was a sore point for committee members, who were seething over a comment Mayo President and CEO Dr. John Noseworthy made to the Star Tribune Tuesday while speaking in Washington. If the Legislature didn’t pass the bill, Noseworthy warned, “49 states” are eager to help the Mayo Clinic relocate.

“It was a dumb thing to say. It was dumb, dumb, dumb,” said state Rep. John Lesch, DFL-St. Paul, adding that Noseworthy’s remark made him less inclined to vote for the bill. “Your CEO [was] going to the National Press Club in Washington, D.C., and wagging a finger at the Minnesota Legislature. That’s what it looked like to me … I was thoroughly disgusted.”

On Tuesday, Mayo spokesman Dr. Brad Narr said Mayo, the largest private employer in Minnesota, would never pull out of the state. But Mayo does have thriving campuses in Arizona and Florida, Sun Belt states popular with patients and physicians.

Plus, Narr said, “there are a lot more organs to transplant in Florida.”

The project, he said, “will help us grow in Minnesota.” Narr reminded the committee that none of the state money would go to Mayo, but rather would support development in the community over the next 30 years. “I cannot threaten this group and say, if this, then that,” Narr said. “I want the Mayo Clinic to grow in Minnesota.”

Rep. Greg Davids, R-Preston, defended Noseworthy — “He’s just calling it the way it is.” But Davids issued his own ultimatum, threatening to pull his support for the bill over a $5 million local tax that currently flows from Rochester to economic development projects in small communities nearby. Rochester DFL Rep. Tina Liebling had proposed recapturing that $5 million for the Mayo project and Davids paused the hearing for an extended reading and commentary on a Rochester Post-Bulletin story about the proposal.

“I cannot be on a bill that takes money from small-town Minnesota,” Davids said, even as Norton protested that nothing in her bill would do that.

The revised bill is likely to shift many of those taxes from the state and onto the Rochester-area businesses and residents who would benefit from them.

“I’m trying to get the best bargain for the taxpayers here,” said House Taxes Committee Chairwoman Ann Lenczewski, DFL-Bloomington. “Both sides of the aisle have told me very clearly they’re very supportive of the project or they’re not so supportive of the project. It’s really what can get the votes to pass that can make it through the Minnesota House.”

Committee members questioned some “infrastructure” items sought in the bill. Rep. Diane Loeffler, DFL-Minneapolis, pointed to a $78 million atrium with water features. Narr noted that in Minnesota’s climate, an atrium is more necessity than luxury.

The House bill is just one front in Mayo’s fight through the Legislature. While the House works to wrap the bill into the omnibus tax bill, the Senate Tax Committee will meet Friday to debate its version, which remains a stand-alone bill.

If there was one point that united both sides, it was the effort to describe just how boring they think Rochester is.

“It’s a nice town, but it’s mostly doctors walking around talking to each other and not a lot of fun,” said Rep. Ron Erhardt, DFL-Edina. “Why don’t you move to something adjacent to the Twin Cities?”

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