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What can DMC do for economy amid COVID-19 concerns?

R.T. Rybak said the Destination Medical Center initiative should be able to help Rochester weather the aftermath of the COVID-19 pandemic.

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Construction crews work on a new hotel a the intersection of Civic Center Drive and First Avenue Northwest Friday, March 27, 2020, in Rochester. (Joe Ahlquist / jahlquist@postbulletin.com)

R.T. Rybak said the Destination Medical Center initiative should be able to help Rochester weather the aftermath of the COVID-19 pandemic.

"We need to be in a position to be as spry as possible," said the chairman of the DMC Corp. board.

Kathleen Lamb, the board’s legal representative, said state statute places limits on how DMC funding can be spent. It can only be used in the DMC district, and the expense must be classified as public infrastructure projects that drive economic development.

"It’s frankly mostly construction, demolition, acquisition and that sort of thing," she said, pointing out that some flexibility might exist for efforts to generate jobs.

Rybak asked Lamb and local DMC Economic Development Agency staff to work on defining what can and can’t be classified "public infrastructure" in an effort to help the local economy.

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"We’ve never really tested this question on whether we can engage in, for instance small business, or other things we are talking about," he said Thursday as members of the state DMCC board’s executive committee discussed options.

"I want to understand what we can spend (state funds) on," he said, indicating the Minnesota Department of Employment and Economic Development or state Legislature might be able to provide flexibility.

Rochester Mayor Kim Norton, the board’s vice chairwoman, said the DMC initiative has a role to play, but added that state and local funds will be the first line of spending to help small businesses.

Already, small business loans and other options have started to emerge as businesses have been forced to close or modify their operations as more people stay home to reduce chances of spreading the virus.

"I know it’s not enough at this point, but we’re looking at our budget," she said, adding that she’s also seeking a way to set up a fund to support people who are laid off in the community.

Lisa Clarke, the DMC EDA executive director, said her staff has been redirecting its efforts to seek opportunities, while focusing on the future.

"We will emerge from this crisis," she said. "We know that, and today we need to prepare for that."

Getting off the ground

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While questions remain about new ways to use DMC efforts to help small businesses, DMCC board members said they want to accelerate public infrastructure projects.

Norton said doing so could get some work done while business operations are slow, which would reduce the impact later in the year.

"It may disrupt businesses for a shorter period of time," she said.

Additionally, Rybak said work on the Heart of the City project at Peace Plaza and along Discovery Walk would provide immediate jobs, since construction crews and other trades are considered essential, thus able to continue working under the stay-at-home order issued by Gov. Tim Walz.

So far, only one of eight bids has been approved for what is estimated as $9.2 million in work. The other bids were rejected for revisions after proposals came in with a combined $13 million price tag for the first phase of the Heart of the City project.

Josh Johnsen, Rochester’s project manager for the Heart of the City remodel, said the new bids are expected to be opened April 2, and traffic barriers on First Avenue are scheduled to go up April 5 as the initial work starts.

He said the project can be adjusted to do more work while fewer people are in the area.

"Areas of opportunity to accelerate timelines relate to components of the project that are most disruptive to businesses and visitors," he said. "For example, we can potentially lessen the impact of sound and dust by shortening the duration of rock removal for the sanitary and storm water replacement."

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Additionally, he said equipment being used could shorten the time needed to close Second Street Southwest between Broadway and First Avenue for related work.

Patrick Seeb, DMC Economic Development Agency director of economic development and placemaking, said the fact that the work is out of the planning stage makes the Heart of the City project ideal for acceleration.

"It’s primed and ready," he said.

Workplace safety

At the same time, the city and DMC EDA efforts to limit impacts on surrounding businesses provide flexibility.

"As the need and opportunities change, we will flex our construction approach appropriately," Seeb said.

He also said DMC EDA staff is working with Mayo Clinic and builders to identify safety protocols to limit the threat of spreading COVID-19 on job sites.

"We’re trying to understand CDC guidelines as they pertain to worker safety," he said.

Additional work is being done to find ways to make sure local contractors have opportunities to participate in the work and generate new local jobs. By dividing contracts into smaller units, he said smaller businesses have an opportunity to participate.

"We want to make sure to the extent possible that local jobs are created," he said.

Olmsted County Commissioner Jim Bier, who serves as the DMCC board treasurer, said the county is working to address a variety of Covid-related concerns, but keeping people employed will help reduce future need.

"We want to definitely keep the momentum going on building downtown," he said.

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