Private investment in Destination Medical Center edged up in 2019, topping the previous year’s year’s total by approximately $10.3 million.
The DMC Economic Development Agency identified approximately $272.1 million in new private investment last year, according to a report presented to the DMC Corp. executive committee Thursday morning.
“We had a really, really good year,” DMC Corp. Board Chairman R.T. Rybak said of private investment in the district, which is the highest reported total since state legislation created DMC in 2013.
The DMCC executive committee approved the annual report which is due to the Minnesota Department of Employment and Economic Development by April 1.
Mayo Clinic contributed $139.1 million in the investment, up from the $126.5 million it reported last year. Key projects highlighted Thursday were $48.1 million in Saint Marys Hospital modernization and growth, as well as $17.8 million to upgrades in the Mary Brigh Building’s east tower and operating rooms.
Private developers and others contributed another $133 million in work throughout the year, down slightly from $135.3 million in 2018. Projects ranged from retail upgrades to millions spent to create market-rate apartment buildings.
While Mayo Clinic investments can include projects anywhere in the city, private investment is confined to the DMC district, which covers the downtown core and stretches west along Second Street to just beyond the Saint Marys Hospital campus.
City and DMC Economic Development Agency officials said it's unclear how the COVID-19 pandemic will impact investment this year.
Last seemed to be a solid year, and 2020 seemed to be headed in the same direction pre-COVID, said Rochester Assistant City Administrator Terry Spaeth.
Patrick Seeb, the DMC EDA director of economic development and placemaking, said he's spoken to developers who have expressed concerns, but say they are not planning to slow efforts at this point.
Construction trades are considered essential jobs and have leniency under the stay-at-home order being implemented by Minnesota Gov. Tim Walz.
INCREASE STATE FUNDING
If the Minnesota Department of Employment and Economic Development verifies the $272.1 million in private investment reported for 2019, the state will add approximately $7.5 million to its annual release of funds for public infrastructure projects.
Approval would bring this year’s state DMC contribution to nearly $21 million, up from approximately $13.5 million last year.
It’s all part of the unique finance model created by the 2013 DMC legislation, which aims to support the city’s public infrastructure needs as private market activity grows.
The legislation allocates $585 million in public funds for the 20-year DMC effort. Up to $411 million will come from the state, with the city providing $128 million and Olmsted County earmarking $46 million to help fund transit-related projects.
So far, the city has provided nearly $57.3 million, according to a DMC report sent to the Legislature earlier this year. The county has provided $10.5 million.
The state has released nearly $22.5 million in infrastructure aid since the DMC effort began, with the first payment made in 2017.
Annual private investments throughout the two decades are expected to top $5.6 billion, with Mayo Clinic planning to spend $3.5 billion.