Rochester, Mayo Clinic celebrate $585 million windfall from the state

ROCHESTER – Minnesota came up with the money — more than half a billion dollars — and now Mayo Clinic is keeping its part of the bargain. It won't be going anywhere anytime soon.

"It's a great day to be a Minnesotan, a great day to call Rochester our home," Mayo CEO John Noseworthy told a cheering crowd Wednesday in Rochester. He was flanked by Gov. Mark Dayton and legislative leaders, all celebrating the herculean effort that went into ramming the $585 million Mayo legislation through the Legislature in a matter of months.

A cheering crowd of Mayo employees and Rochester residents welcomed the politicians with cheers and hand-lettered "Thank You" signs.

To stay competitive with other world-class medical centers such as Johns Hopkins and the Cleveland Clinic, Mayo is planning a multibillion-dollar makeover of its sprawling campus, and the surrounding downtown, using a mix of its own funds, private investment and state and local tax dollars.

The state funds, wrapped into a $2.1 billion tax bill that passed in the final hours of the legislative session Monday night, will steer $585 million to Rochester to support infrastructure improvements around the new downtown development. The state will chip in $372 million over the next 27 years, but only after Mayo, the city of Rochester and Olmsted County make substantial investments of their own.

Mayo has pledged billions to the project — $3.5 billion of its own money and another $2 billion in private investments.

Other big-ticket projects, such as the Vikings stadium, can take years or even decades to pass. The fact that Mayo managed to push such a complicated, pricey bill through the Legislature in a single year was something of a legislative miracle, and half a dozen lawmakers were on hand — including House and Senate leadership — to celebrate with Rochester.

"What a great day," House Speaker Paul Thissen said. The fact that the Legislature was able to sign off on such a massive project so quickly, he said, proves that "people working together and a community working together with the state government can actually accomplish something. I think that was a hallmark of what this last legislative session was about."

Mayo's funding had its bumps. Noseworthy came under sharp criticism from legislators when he warned that there were 49 other states that would be happy to welcome Mayo if Minnesota couldn't come up with the money.

"Based on this legislation, Mayo Clinic is prepared to invest in Minnesota, where we've been for 149 years, and now we'll be even stronger, for generations to come," Noseworthy said.

"There are 49 other states that would really love to have this opportunity," Dayton said, defending Noseworthy's claim. "It's the truth. We are incredibly fortunate to have Mayo here."

"We're the land of 10,000 lakes and 14,000 physicians," joked Rep. Kim Norton, DFL-Rochester, who guided the Mayo bill through a rocky session. "I am so excited to see what happens next."

What happens next will be decided over the next few months. The Destination Medical Center's new governing board will come together and begin deciding which projects will be built first. No state tax dollars will flow until at least $200 million in private investment have been poured into the project.

The to-do list includes expanding the campus to upgrading downtown Rochester into a destination in its own right, complete with new hotels, restaurants and cultural attractions. The idea is to make the city more appealing to patients and to the people Mayo and other businesses hope to draw there to live.

"I'm really excited about it," said Brent Buchan, a businessman who has lived in Rochester most of his life.

He has tried to picture what his hometown will look like, several billion dollars from now. "I envision it being a very small Minneapolis-St. Paul or Chicago," said Buchan, a fireplace general contractor who owns Energy Products and Design. "The culture, the diversity of things to do, the arts, the food venues, the infrastructure — we just have a fantastic opportunity with the capital Mayo wants to invest and what the state has committed to supporting us with. This is not going to feel like a small town."

The funding plan hammered out by the House and Senate tax committees call on Rochester and Olmsted County to use local sales taxes, local property tax abatements and other tax capture provisions to steer up to $128 million to the project. The county will also fund a $116 million transit line to make it easier for patients and Mayo visitors to move around the community.

Mayo has estimated that the project could create 35,00 to 45,000 jobs, including thousands of construction jobs and up to 16,000 jobs at Mayo itself.

Mayo and its hometown are so closely knit that it's sometimes hard to tell where one ends and the other begins. Almost everyone in town works for Mayo or knows someone who does. Mayo patients and their family are everywhere, strolling the skywalk, patronizing hotels and restaurants.

Rochester Mayor Ardell Brede said his town and Mayo go together like a horse and carriage. "You can't have one without the other," he said. "I expect this relationship and partnership to become even stronger during the next many decades."

Jennifer Brooks • 651-925-5049