Other view: Minnesota can win with Mayo expansion planIn January, the Mayo Clinic in Rochester, Minn., ripped away the remaining shreds of secrecy regarding Destination Medical Center.
By: Rochester Post-Bulletin editorial board, Rochester (Minn.) Post-Bulletin
In January, the Mayo Clinic in Rochester, Minn., ripped away the remaining shreds of secrecy regarding Destination Medical Center. During the next 20 years, Mayo plans to invest $3 billion in Rochester on hospitals, clinical facilities, lab space and support sites. Mayo also predicts that local incentives and new marketing strategies will attract private investment in hotels, downtown residential areas, restaurants and other livability-enhancing facilities — to the tune of $2 billion in development.
Add those things together and Rochester won’t just have $5 billion in new medical facilities, retail businesses, condos and apartment buildings, it also will have up to 45,000 new jobs that will generate billions of dollars in new revenue for the state of Minnesota. More important, Mayo Clinic says it can secure Minnesota’s place as the top medical destination in the world.
But there’s a catch. The Destination Medical Center plan can’t be accomplished only through Mayo Clinic and private investment. There’s a third leg to this stool, in the form of nearly $600 million in public infrastructure improvements that Rochester will need to support its growing population and to provide services, transportation and entertainment to the patients who will travel from across the nation and around the world to receive care.
Rochester voters already have committed to a $20 million down payment on this infrastructure, and the clinic has asked the state to provide $585 million in financing to help cover the bulk of the tab.
The math is complicated, but the rationale is simple enough. As the clinic and its work force grow, those employees will generate revenue for the state through income taxes. Increased volume of Mayo Clinic patients also will bring more outside dollars into the state’s coffers. Minnesota, Mayo and its partners, including the city of Rochester, IBM, the Rochester Area Chamber of Commerce, the Rochester Downtown Alliance and the University of Minnesota Rochester, want some of that money to be reinvested here.
The proposal asks the state to approve the use of appropriation bonds, which would function like a line of credit. Rochester would have a new City Development District in the downtown core area, and once it has demonstrated that it is generating growth in the state tax base, an economic development authority will begin reviewing and approving financing for public improvement projects in Rochester. Money will be made available through the sale of the authority’s bonds, which will then be repaid through an incremental “capture” of the already-demonstrated new state tax revenue that the development district is producing.
It’s hard to see much risk in this proposal because there aren’t any “leaps of faith” involved. If the job growth Mayo is promising in the development district doesn’t materialize, or if the clinic fails to follow through on its ambitious building plans, the state simply would do nothing. With no proof of growth, no state money would be sent to Rochester.
This doesn’t mean Mayo’s proposal will be a slam-dunk in St. Paul. Nothing on this scale ever has been attempted in Minnesota, and it’s safe to say that some people will object to anything that resembles the “earmarking” of future state revenue for use in one community.
But we hope legislators will recognize this as an opportunity for the entire state, a chance to think big, to begin turning a far-reaching vision into concrete reality. Mayo Clinic publicly has declared its intention and determination to be the world’s best, most comprehensive provider of health-care services. We have every reason to believe that the clinic will achieve that goal.
With a little help and flexibility from the state, it will.