Project ranks as largest economic development plan in the state
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The DMC public and private investment is estimated to include approximately $3.5 billion in new Mayo-financed capital investments on its Rochester campus over the next 20 years, combined with an estimated $2.1 billion in additional leveraged private investment. The multiyear Mayo Clinic DMC investment, combined with additional private investments required to support this global destination vision, is projected to create 35,000 to 45,000 new jobs in Rochester and Minnesota and over $3 billion in new tax revenues in Minnesota. This represents the largest economic development initiative in Minnesota and one of the largest in the United States.
"This bold economic development initiative is driven on the proof of growth in the private sector and not the promise of growth," says John Noseworthy, M.D., Mayo Clinic president and CEO. "Ten years from now, there will emerge just a few medical centers with the reputation for health care excellence and patient-focused outcomes that will attract patients from all over the world to their flagship medical center. Mayo Clinic not only intends to protect its current status as one of the world's premier medical institutions but to significantly expand our highly-effective practice model and medical assets to be clearly recognized as a global destination medical center for decades to come."
As Minnesota's largest private employer with more than 32,000 employees in the state, Mayo Clinic has long been synonymous with the city, Rochester, where the clinic is located and headquartered. But other U.S. cities and foreign countries often encourage Mayo Clinic to consider expansions outside of Minnesota. "Various medical centers are evaluating major cities in the United States, Europe, Asia and the Middle East as possible locations for significant expansion," says Dr. Noseworthy.
"While Mayo Clinic is also evaluating plans for additional expansion outside Minnesota in future years, we believe Rochester can and should remain Mayo's global headquarters and a premier destination for medical care well into the future, assuming we can attract the additional private business investments and finance the necessary public infrastructure needed to support an expansion of this scale," he says.
In addition to the Mayo-financed and non-Mayo private investments, it is anticipated that a total of $585 million in public infrastructure costs will be required to support the DMC expansion over the 20-year investment timeline, bringing the total DMC investment in Minnesota to over $5 billion. Current projected benefits to Minnesota from Mayo Clinic and related DMC expansion include (over 20 years):
- Total economic impact to Minnesota exceeding $45 billion, including $30 billion of direct spending.
- 35,000 to 45,000 new jobs in Minnesota, of which 25,000 to 30,000 would be direct to expansion in southeast Minnesota.
- 1,800-2,200 construction jobs per year. Most will be union/trades.
- $2.5-$3 billion in additional tax revenues to the state of Minnesota (personal income, sales, other state taxes) over the 20-year period;
- An additional $300 million in new local and other tax revenues.
Major elements of the proposed DMC initiative fall into three categories:
- Mayo Facilities and Services Expansion. In 2012, Mayo Clinic announced that it intended to invest nearly $3.5 billion in capital improvements throughout its facilities in Minnesota and other states over the next 20 years. Mayo will continue to invest in its own infrastructure and improvements to increase the quality of care delivered to patients. Mayo needs support from the state and local jurisdictions to improve public infrastructure that supports Rochester and Minnesota as a global medical destination. Additionally in 2012, Mayo Clinic along with the city of Rochester and Rochester Area Economic Development, Inc. (RAEDI) announced an accelerator project that will support entrepreneurs who have licensed Mayo's innovative technologies to advance medicine and make these technologies available for patient care. This space will enable bio-business companies to obtain short-term leases quickly and affordably in a space dedicated to small startups. Space provides for collaboration between startups and accessibility to ancillary infrastructure services (i.e., venture capital).
Mayo Clinic has been working with public finance and development experts and various public officials to craft a workable plan to finance the public infrastructure costs. While Mayo Clinic will privately finance all of its facilities expansion, it became clear that the city of Rochester does not have the capacity to finance public costs exceeding $500 million, nor will a private developer pay for public infrastructure. A DMC working group has developed an innovative public finance plan that involves the following elements:
- A portion of the proposed $585 million in public costs will be financed locally by the city of Rochester using city tax revenues and financing tools such as possible revenue bonding, tax abatement and TIF (Tax Increment Financing). In addition, Rochester voters last November approved an extension of the local sales tax that included $20 million as an additional city contribution to support the DMC expansion.
The DMC financing plan will be submitted to the 2013 Minnesota Legislature for consideration.
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About Mayo Clinic
Mayo Clinic is the first and largest integrated, not-for-profit group practice in the world. Doctors from every medical specialty work together to care for patients, joined by common systems and a philosophy of "the needs of the patient come first." More than 3,700 physicians, scientists and researchers, and 50,100 allied health staff work at Mayo Clinic, which has campuses in Rochester, Minn; Jacksonville, Fla; and Scottsdale/Phoenix, Ariz.; and community-based providers in more than 70 locations in southern Minnesota., western Wisconsin and northeast Iowa. These locations treat more than half a million people each year.
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