New private investment in Destination Medical Center dropped by $128 million in 2020, compared to the previous year.
The DMC Economic Development Agency identified approximately $144.1 million in new private investment last year, according to a report presented to the DMC Corp. executive committee Tuesday morning.
“To have come through this last year with this level of investment in place is remarkable,” DMC Corp. Board member Paul Williams said Tuesday as the investments were presented.
The new private investment brings the total documented private spending in the DMC initiative to $1.1 billion.
The state DMCC board approved the annual report due to the Minnesota Department of Employment and Economic Development by April 1.
Mayo Clinic contributed $60.3 million in the investment, down from the $139.1 million it reported in 2019. Key projects were modernization work at Saint Marys Hospital, updates to the pedestrian subway and expansion of the clinic’s tissue registry building.
Doug Holtan, Mayo Clinic’s chairman of facilities, said work on approximately 100 projects was paused as the coronavirus pandemic emerged, but construction resumed later in 2020.
Mayo Clinic’s report to the DMCC board does not provide specific dollar amounts spent on individual projects.
Private developers and others contributed another $83.8 million in work throughout the year, down from $133 million reported last year. Projects ranged from retail upgrades to millions spent to create market-rate apartment buildings.
Projects ranged from $22,000 to replace a retaining wall at Christ United Methodist Church, 400 Fifth Ave. SW, to nearly $24.4 million spent on the hotel project at the intersection of Second Avenue and 11th Street Southwest.
Other projects listed in the report included $24.1 million spent of construction of the Hyatt House at the intersection of Civic Center Drive and First Avenue Northwest, nearly $5.7 million spent on The Hue Apartments at the intersection of Fourth Street and First Avenue Southwest, and $2.25 million for the addition of Crave Restaurant to the Hotel Indigo.
While Mayo Clinic investments can include projects anywhere in the city, other reported private investment is confined to the DMC district, which covers the downtown core and stretches west along Second Street, beyond the Saint Marys Hospital campus.
If the Minnesota Department of Employment and Economic Development verifies the entire $144.1 million in private investment for 2020, the state will add approximately $3.9 million to its annual release of funds for public infrastructure projects.
Approval would bring this year’s state DMC contribution to nearly $24.9 million for DMC-related public infrastructure projects, up from nearly $21 million last year.
The amount made available by the state each year will continue to grow until it reaches a $30 million annual cap.
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.
The city has provided $59 million, according to a DMC report sent to the Minnesota Legislature earlier this year. The report states the county has provided $10.5 million.
The state has released nearly $43.4 million in infrastructure aid since the DMC effort began, with the first payment made in 2017. If the construction in the new report is certified by the state, the total state funds will increase to $68.3 million, or nearly 12 percent of the allocated funding.
Annual private investments throughout the two decades are expected to top $5.6 billion, with Mayo Clinic planning to spend $3.5 billion.
DMC Economic Development Agency Executive Director Patrick Seeb said he anticipates 2021 private investment will start picking up, but could take time to bounce back to pre-pandemic levels.
“I think we are going to see a bit of a … slow down in terms of the number compared to some prior years, but I think there are reasons to be confident that there is going to be continued growth,” he said.
Board Chairman R.T. Rybak said the numbers reported Tuesday were better than he had anticipated.
“A year ago when all of this hit and Mayo put a pause on its work and everything else," he said, "I would not have thought we'd be sitting here today reporting on $144 million and that we’ve gone over $1 billion in investments."