Dayton names CEOs, political heavyweights to Mayo board

  • Article by: JENNIFER BROOKS , Star Tribune
  • Updated: July 23, 2013 - 10:05 PM

The eight-member board will direct the largest economic development project in state history.

Gov. Mark Dayton has tapped Minneapolis Mayor R.T. Rybak and his own chief of staff, Tina Smith, to oversee the largest economic development project in state history — the transformation of downtown Rochester as Mayo Clinic creates its new hub of medical innovation.

Minnesota taxpayers will contribute about half a billion dollars to Destination Medical Center project, Mayo’s $5.6 billion plan to overhaul downtown Rochester as it expands and upgrades its own campus. An eight-member board will oversee the state and local tax dollars expected to flow into the project over the next two decades.

Smith was a key figure in shepherding the Mayo project through the Legislature last session, helping to pitch the massive spending bill to skeptical lawmakers and relaying gubernatorial and legislative expectations to Mayo leaders. Rybak, who has announced that he will not seek another term in office, steps down at the end of this year. Smith is Rybak’s former chief of staff.

Dayton’s other two selections for the board include James Campbell, retired group executive vice president of Wells Fargo, and Susan Rani, president and founder of Rani Engineering. Campbell is well-known in public policy circles, having led the public-private partnership that planned the Southwest Corridor light rail line. He is a former chairman of the Itasca Project, a civic alliance of regional employers. Rani’s firm specializes in engineering, environmental and transportation projects, with much of that work in the public sector.

“People with varied expertise, but really strong expertise,” Dayton said Monday, when asked about the board members he selected from a pool of 20 applicants. “We’ve had good consultation with Mayo and I think they’re well satisfied with our decision.”

Campbell and Smith will serve six-year terms; Rani and Rybak will serve four-year terms. His nominees will have to be confirmed by the Minnesota Senate.

Mayo has named its own representative to the board: Bill George, former chairman and CEO of Medtronic and a Mayo trustee. The eight-member board also includes Rochester Mayor Ardell Brede, Rochester City Council Member Ed Hruska and a member to be selected by the Olmsted County Board. The board positions are unpaid, but members may be reimbursed for their expenses.

Mayo has predicted that the Destination Medical Center project will create 30,000 jobs, both on its campus and in the surrounding community, and generate some $3.2 billion in state tax revenue over the next 20 years. Mayo currently employs 30,000 people, making it the state’s largest private employer.

“This monumental public-private partnership will create tens of thousands of new jobs in our state, and accomplish great things for the people of Minnesota,” Dayton said in a statement Tuesday “Knowing the great importance and lasting significance of this initiative, I have selected well-respected, effective leaders with proven records of success; people who can see the big picture and then actualize it. The men and women I have asked to take on this important work are as excited as I am by this tremendous opportunity, and are strongly committed to its success.”

The Legislature signed off on the Mayo funding in May, with the understanding that the state’s $455 million contribution would pay for infrastructure improvements like roads and sewer lines to support the overall project. Rochester and Olmsted County are putting in another $128 million.

Mayo pitched the Destination Medical Center as a way to stay competitive with other world-class treatment centers like the Cleveland Clinic and Johns Hopkins.

When lawmakers balked at the size of the request — which initially was larger than what the state contributed the year before to the new Vikings stadium — clinic officials warned that without state buy-in to the project, Mayo might have to shift its future investments to its campuses in Florida and Arizona.

At one point, Mayo CEO John Noseworthy said that if Minnesota didn’t come through with the money, “there are 49 states that would like us to invest in them.” Dayton later defended the remark as a simple statement of fact.

Mayo has pledged to put $3.5 billion into the project and to leverage some $2 billion in private investment to bring new restaurants, hotels and amenities to town and transform Rochester into a destination in its own right. Clinic officials said they were having trouble recruiting and retaining the best talent to Minnesota without the civic and cultural amenities that Cleveland and Baltimore could offer.

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