By Neal Ungerleider
Fast Company
One of the world’s best-known hospitals has a problem.
The Mayo Clinic is located in the small city of Rochester (pop. 111,000), about a two-hour drive from Minneapolis, Minnesota. And it is, right this minute, competing fiercely for a small-but-extremely-lucrative slice of the global medical tourism industry. The wealthy American, European, east Asian, and Gulf Arab patients who have been the clinic’s bread and butter have been instead choosing to get treatment abroad or at domestic rivals like Baltimore’s Johns Hopkins University or the Cleveland Clinic. But that may be changing—and the reason, if not the construction, is simple: the Destination Medical Center.
That’s an audacious 20-year plan by Rochester, the Minnesota state government, the Mayo Clinic, and their private partners to spend more than $6.5 billion on a kind of real-life version of SimCity, designed to turn Rochester into a global biotech hub, and double its population in the process.
At a contentious city council meeting this past March, Rochester approved a plan to build the DMC. The project, a public-private partnership between Rochester, the Mayo Clinic, the state of Minnesota, county governments, and the private sector, would effectively remake all of Rochester in the Mayo Clinic’s image. Downtown would be rejuvenated and made more cold-weather friendly, while the Mayo Clinic would welcome gleaming new facilities. Vast plots of land would be used for fresh office space for biotech and pharmaceutical firms, local schools would get a cash injection, and development of amenities like hip restaurants and upscale shops would be subsidized by local and state government to attract out-of-town talent and medical tourists. There are even plans for a rail link to the city of Minneapolis, approximately 90 miles away.
“It isn’t clear yet what the Destination Medical Center will mean to the Twin Cities metro area,” says Leah Puffer, a Minneapolis-based urban planner. “Rochester is often seen as a peripheral city, just far enough away from Minneapolis and St. Paul that it doesn’t have the feel of a competitor. I think many individuals in the Twin Cities are still unaware of the amount of investment and potential development in Rochester as part of the Destination Medical Center. Most people still see it as a sleepy, small city with a great hospital and clinic.”
THE TRANSFORMATION
Lisa Clarke, the DMC’s executive director, speaks bluntly about what the DMC would offer. “It’s between 25,000 and 45,000 jobs over 20 years, with the accompanying growth in tax revenue,” Clarke tells Fast Company. And that’s before the seven new neighborhoods they plan to construct around the city.
Peter Cavaluzzi, principal and board member with Perkins Eastman, the architects behind the DMC development, previously worked on Baltimore’s Inner Harbor, New York’s new Moynihan Penn Station, and Las Vegas’s CityCenter. He compared the changes in Rochester to Robert Moses’ construction projects in New York for the World’s Fair, which included a drastic remaking of the borough of Queens.
While Rochester wants to renovate, the costs aren’t cheap. As of this writing, the project is expected to be paid through a combination of a $6 billion of investment from the private sector and $585 million from state and local government. The $585 million cost is expected to be shouldered by taxpayers through sales tax increases approved in 2012 and diversion from other portions of the state and local budgets. Further sales tax increases are also possible in the future. (And property taxes may come into play, especially in light of the Rochester legislators’ recent failure to sway the city on its sales tax idea.)
In exchange for the tax increases, Destination Medical Center authorities are promising city residents that their quality of life will vastly increase. Promotional materials sent to Rochester residents extol the creation of at least 35,000 new jobs and a long-term boost to tax revenue. Additional funds for the local school board are especially emphasized. Rochester’s population would nearly double in size, and a small city would be transformed into a bigger player.
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