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DMC sees $131.1M in private investment

Discovery Square Construction crews drill for footings and build foundation walls at the Discovery Square site along Fourth Street Southwest Wednesday.

Mayo Clinic invested less in Destination Medical Center last year than in 2016, but a portion of the decrease was offset by continued increases in other private development.

The DMC Economic Development Agency identified approximately $131.1 million in new private investment last year, according to a report presented to the DMC Corp. board this morning.

"I’m very encouraged by the continued investment," said Lisa Clarke, executive director of the DMC Economic Development Authority.

The investment includes $86.4 million by Mayo Clinic, which was down from $107.2 million in 2016, when the clinic reported $68 million in hospital investments, along with other projects.

The 2017 Mayo Clinic spending returns its annual investment to within $1 million of the $85.7 million it reported in 2015.


"The ebb and flow of that will depend on actual construction," Clarke said of the Mayo investment numbers.

Meanwhile, other private development in the DMC district has increased each year since it started being documented in 2015.

Thursday’s report shows $44.7 million in private investment outside Mayo Clinic spending last year, up from $38.1 million in 2016 and $20.5 million in 2015.

"The market is doing what we want the market to do, and we will continue," Clarke said of the private investment in the core of the city.

The combined $131.1 million in documented private investment for 2017 was a drop from the $145.3 million reported for 2016, but it remains well above amounts recorded for the first three years of the DMC initiative.

The 2016 investment propelled the project beyond the $200 million benchmark required to start the release of state funding, which means all investment in 2017 will be used to calculate the state funding released this fall.

Last year, the city saw the first $2.6 million of an anticipated $411 million in state funding for the 20-year DMC initiative.

If the Minnesota Department of Employment and Economic Development confirms the entire $131.1 million in private investments for 2017, the state would add approximately $3.6 million to its annual release of funds.


That would bring this year’s state contribution to nearly $6.3 million for DMC-related public infrastructure projects.

How it works

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 costs.

So far, the city has provided $26.8 million, according to a DMC report sent to the Minnesota Legislature earlier this year. The county has provided $4.5 million.

Annual private investments throughout the two decades are expected to top $5.6 billion, with Mayo Clinic planning to spend $3.5 billion.

Reported private investment related to Destination Medical Center has been:


2013:$10.3 million

2014:$54.5 million

2015:$87.6 million

2016:$145.3 million

2017:$131.1 million

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