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Work on luxury hotel atop Gonda Building won't start this year

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Mayo Clinic announced in September, 2018 a "joint venture" with the Singapore development firm, Pontiac Land Group, to build a hotel plus clinic floors on top of Mayo’s Gonda Building in downtown Rochester.
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Construction of an ultra-luxury hotel on top of a Mayo Clinic building is not expected to begin this year.

Pontiac Land Group, a Singapore development firm led by the Kwee family, announced plans in September 2018 to build a seven-story hotel plus four clinical treatment floors on top of Mayo Clinic's 21-floor Gonda Building in downtown Rochester.

At the time, Mayo Clinic's announcement stated, "Preliminary plans are for construction to begin by the end of 2019 or early 2020, with the project being completed by the end of 2022."

Mayo Clinic recently confirmed that work on the upward expansion won't begin until the later time estimates.

"Project planning continues, though we don’t anticipate construction will begin until later in 2020. The project is not delayed and the planning remains on track. The initial timing mentioned in the release was preliminary," Mayo Clinic's Kelley Luckstein wrote last week. "We will provide a more specific timeline when that information is available."

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It is anticipated that the unprecedented project will involve a large number of contractors, including two teams of architects to separately design Mayo Clinic's clinical floors and the hotel floors for the Pontiac Land Group.

No cost estimates for the total project have been released, though Mayo Clinic expects to invest $190 million to build the four additional medical floors. Those floors are expected to serve as an expansion to the Mayo Clinic Cancer Center and Outpatient Procedure Center.

Mayo Clinic officials said that allowing the luxury developer to build a hotel on top of its medical complex means that Mayo can build the needed medical floors much sooner than the clinic could have managed on its own.

Mayo Clinic’s Executive Dean of Practice Dr. C. Michel Harper Jr. estimated it would not have been able to add the floors to the Gonda Building for a decade and "it would probably cost us four or five times as much."

While Mayo Clinic is commenting on the project's status, the Singapore-based developer has been quiet about details since the announcement last year.

Details about the hotel, like the number of rooms, the brand or its rates, have not yet been announced. Looking at Pontiac Land’s other hotels, which include Ritz-Carlton and Four Seasons hotels in Singapore, it's expected the Rochester hotel will be luxury property. Its properties are calculated to be worth an estimated $5.5 billion.

When asked for details in June, Pontiac Land Group's Manager of Corporate Communications Orphelia Huang wrote, "The project is progressing, and we hope to share some updates soon."

This will be Pontiac Land Group’s second project in the United States. It's also developing an 82-story residential condominium complex in New York City, adjacent to The Museum of Modern Art. The smallest one-bedroom units start at $3 million.

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Mayo Clinic’s Chief Administrative Officer and Vice President Jeff Bolton said the clinic did discuss the project with other developers prior to the announcement due to possible concerns about Mayo Clinic and Destination Medical Center giving an advantage to the Pontiac Land Group.

"We have had discussions with them (other hotel developers). Mayo’s objective is to grow the pie, not change some slices of the pie. Mayo’s success will benefit all of the providers of these services in the community," Bolton said in 2018.

However, leaders of the Abu Dhabi-based Bloom International Realty said they were "blindsided" by the Pontiac/Mayo Clinic project. Bloom opted to pull out of a land deal with the City of Rochester earlier this year that would have laid the groundwork for an estimated $230 million development.

Related Topics: MAYO CLINICFINANCE
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