Exterior Viewdmc.jpg

An artist's rendering provided by RSP Architects and HOK Architects shows the proposed Discovery Square building Mortenson Co. plans to build in downtown Rochester.

Ceremonial shovels are set what's slated to be the first life science building in Destination Medical Center's Discovery Square subdistrict.

The 89,000-square-foot building being constructed by Minneapolis-based Mortenson Co. will break ground at 1 p.m. Thursday at the corner of Second Avenue and Fifth Street Southwest.

While other projects in the subdistrict have been completed or are in the works, the Mortenson building is the first dedicated to the effort of spurring economic development by attracting life science researchers and related businesses.

Here's a few things to know about the project.

1. Approximately half the building is spoken for.

Chris Schad, senior strategy consultant with Mayo Clinic's Department of Planning Services, said firm commitments have been reached to fill about half of the estimated 80,000 square feet of rentable space.

Of that space, he said Mayo Clinic has committed to lease 30,000 square feet.

Proposals are currently being evaluated for another 15 percent of the space, Schad said.

"We've got 35 percent of the building yet that is available to other companies," Chris Schad said.

2. Negotiations continue for remaining space.

The University of Minnesota Rochester continues to be interested in renting a portion of the building, but no agreement has been reached, according to John Hachtel, UMR's director of marketing and communications.

In July, UMR Chief of Staff Jay Hesley said the university had signed a letter of intent regarding renting space for labs and classrooms, as well as collaborative space.

In addition to UMR, Schad said other companies have shown interest without reaching final agreements. He said they include Fortune 500 and Fortune 100 companies.

"There have been some fairly sizable partners that we are in discussions with," he said.

3. DMC seeks businesses of different sizes dedicated to health research.

"At the end of the day we want this building to be filled with a range of companies, from large companies to startups and everything in between," Schad said. "That will be a nice jumping off point for the space and Discovery Square."

He said Mortenson has a financial incentive to fill the building, but DMC officials have an economic incentive to help find tenants that can partner with Mayo Clinic and other businesses in the building.

"It's not just any company that will work in there," he said.

Jeremy Jacobs, development executive with Mortenson, said he isn't free to discuss specific confirmed tenants but said the end goal is to provide diversity among businesses with a common dedication to life sciences.

4. The building is a test of sorts.

As the first building in what is intended to eventually include 2 million square feet of new Discovery Square development, the Mortenson building is being watched as a test of viability.

Tim Cody, DMC Economic Development Agency finance director, said DMC and city officials, as well as Mortenson, want to make sure it can attract diverse research-based businesses to Rochester.

"It's no easy feat by any means to lease up a building of that caliber, and it's been remarkable that it's just been over a year since Mortenson had that amount of lease space available," he said.

Schad noted that Mayo Clinic intentionally has left space available for a variety of other companies.

"They could have filled the building, but that's the wrong purpose for the building," he said.

5. Mayo Clinic has given up parking space for the project.

The Mortenson building is being built on the clinic's employee parking Lot No. 2.

Parking for Mayo employees is shifting elsewhere, so any parking that remains on the Mortenson site will go to non-Mayo businesses in the new complex, Schad said, noting efforts are underway to address emerging parking issues.

"I know there are a lot of solutions being considered," he said, pointing out that as more Discovery Square buildings are erected new tenant parking options will be needed.

"At the end of the day we're going to have to do a lot more thinking about how we move ourselves around," he said.

6. The community is invited to celebrate growth in the 16-block subdistrict.

"It's meant to be a community celebration," Jacobs said.

In addition to the 1 p.m. groundbreaking, a Community Celebration and Innovation Showcase is planned for 11 a.m. to 1 p.m.

The event will be held on Fifth Street Southwest between First and Second avenues, just west of Pasquale's restaurant. The event is expected to bring together art, science and community to celebrate the progress that's already taken place in Discovery Square and look forward to its promising future, according to DMC officials.

"We're really treating this as the ribbon cutting for Discovery Square," Schad said.

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Local Government Reporter

Randy is the Post Bulletin's local government reporter, covering the city of Rochester and Olmsted County, as well as Destination Medical Center efforts. He joined the Post Bulletin staff in 2014.