Southern Minnesota could be poised for economic transformation

Gov. Mark Dayton says a $6 billion Destination Medical Center could transform Rochester and become a powerful economic engine for the state.

Fueled by Mayo Clinic’s dramatic expansion plans in Rochester, southeast Minnesota is poised to become a linchpin in the state’s efforts to revitalize its medical economy.

Billions of dollars in new development in Rochester — along with the doubling of a cancer research center in Austin — has Gov. Mark Dayton’s administration eyeing a dramatic transformation of the area, creating an even tighter link between Mayo, the Twin Cities’ medical and research facilities and the private sector. The plan could, at some point, include high-speed rail between the Twin Cities and Rochester and a host of other amenities.

Taken together, such changes “will be a cornerstone of Minnesota’s future economy,” Gov. Mark Dayton said in an interview with the Star Tribune.

The Rochester project alone is massive. Mayo and the city are on the brink of a $6 billion building boom to transform the clinic and community into what they call Destination Medical Center, a world-class facility designed to be on par with Johns Hopkins in Baltimore and Ohio’s Cleveland Clinic. It will be the development equivalent of dropping six new Vikings Stadiums or nine Malls of America into a city a third the size of Minneapolis, and everyone is waiting to see what effect it will have on the economy, not just of the region but of the whole state.

Down the road in Austin, the University of Minnesota’s Hormel Institute is launching its own massive expansion to become a leading biomedical research facility, starting with a $23 million campaign to draw the world’s best cancer researchers to southern Minnesota.

Back in the Twin Cities, Dayton and U President Eric Kaler are working on an initiative, to be unveiled this fall, that would restore the U’s medical school to pre-eminence.

Ultimately, Dayton said, “The way Silicon Valley is for technology, Minnesota should become the premier site in this country and the world for medical care and medical technology.”

A pioneering past

The state already has a head start. Minnesota is where Mayo doctors pioneered the heart-lung bypass machine, where engineer Earl Bakken’s garage invention of the first wearable pacemaker led to medical devices giant Medtronic. It’s where U doctors led the way in organ transplantation in the 1960s.

Today, health care drives 12 percent of the state’s economy and medical devices and technology are another 1.5 percent, according to the Minnesota Department of Employment and Economic Development.

Mayo Clinic is now the largest private employer in Minnesota, and the closer you get to Rochester, the bigger its economic footprint. By the state’s count, one of every four jobs in the 11-county radius around Rochester is in the health field. Mayo predicts 35,000 to 45,000 jobs from its new development project, along with significant new tax revenue.

None of this is happening without state assistance. Mayo and Rochester will get a half-billion from the state for its development, mostly in improvements to the city and surrounding infrastructure. The Hormel Institute has gotten $13.5 million from the state to double its research facilities and will double that amount, giving the institute enough to begin building 20 state-of-the-art research labs next year.

Hormel Foundation Chairman Gary Ray said the Institute has had no trouble attracting the interest of cancer researchers. It collaborates closely with Mayo and Rochester-based IBM, which equipped the facility with two of the world’s fastest supercomputers.

“We’ve got over 100 applicants — scientists and Ph.D.s” Ray said. “It’s just unbelievable the amount of applications we’ve received for some of these positions,” he said. “We’re recruiting ones who are fully funded. They’re looking at the opportunities to work in a smaller environment.”

In the Twin Cities, the U’s medical school could be looking at a major upgrade.

“The governor has expressed his interest in developing a proposal for the Legislature that would … help the university up its game,” said Aaron Friedman, dean of the University of Minnesota Medical School. The specifics of that proposal are still being hammered out but could involve bonding to fund new infrastructure investments at the medical school.

One collaboration between the U and Mayo has already borne fruit. Since its creation a decade ago, the Minnesota Partnership for Biotechnology and Medical Genomics has leveraged $90 million from the state into an additional $100 million in outside funding that it has used for research into everything from Alzheimer’s to cancer to heart disease. Right now, the university’s mechanical engineers are working with Mayo clinicians to build a better insulin delivery device, more effective than shots or a pump.

“This has been just an extraordinary scientific success,” said Tucker LeBien, vice president for research at the university’s Academic Health Center. That research success, he said, has a multiplier effect on the whole community — by some estimates, every $1 million of grant support creates or preserves an estimated 20 to 40 new jobs.

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