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85 posts categorized "Destination Medical Center news"

June 21, 2016

New downtown skyway going up quickly

Construction of a new downtown Rochester skyway is well underway.

06212016skywayworkThis is a small skyway that will link the 318 Commons building on First Avenue to the former Paine Furniture building on South Broadway. It will span a small alley to make the link.

The connection will link University of Minnesota Rochester offices in the 318 Commons building to future UMR offices in the Paine building.

A quick peek down the alley from behind Cafe Steam showed that the construction is rolling along really quickly.

Once completed, downtown pedestrians will be able to get even farther without stepping out in the snow or rain. 

 

June 13, 2016

Future use of ex-postal center still unclear

Almost a year since buying a former Med City mail processing center for $2.11 million, Mayo Clinic still is working out what to do with it.

3939Valleyhigh DriveMayo Clinic purchased the former U.S. Postal Service facility at 3939 Valleyhigh Drive in July 2015. The 72,662-square-foot center closed in January 2015, when mail processing was transferred to the Twin Cities.

When asked this week about its plan, the Mayo Clinic was pretty much the same as when it bought the building.

“No decisions have been made regarding the use of space at 3939 Valleyhigh Drive NW,” wrote Kelley Luckstein of Mayo Clinic Public Affairs on Friday in response to the query about the building.

The 19-year-old building could be adapted for a variety of purposes, such as an industrial laundry, a distribution center or light manufacturing. The center is described as "constructed of pre-stressed concrete and steel frames for high volume load distribution and contains a total of 23 dock doors; 10 overhead doors, 12 semi-truck docks and one grade door." 

 

June 07, 2016

Broadway at Center development still awaiting financing

A long-anticipated downtown Rochester development, the first Destination Medical Center project, is still waiting for financing before can can begin.

Broadwayatcenter3City officials were notified recently by Hinshaw & Culbertson, a Minneapolis law firm, that a $102.5 million loan to finance the bulk of developer Gus Chafoulias' 23-story Broadway at Center tower was scheduled to close on May 31. A $2.3 million tax-increment financing loan was expected to close at the same time.

However, that didn't happen.

When asked Tuesday about the status of the financing and the timeline for the Broadway at Center project, Titan Development Marketing and Communications Manager Sheila Thoma made a statement via email. Titan is a Chafoulias family company.

"It has not closed. As soon as it does, I will let you know," she wrote

The loans are being made by Minneapolis-based Dougherty Financial Group, which includes seven financial companies that manage more than $42 billion in assets. The firm's founder and board chair, Michael E. Dougherty, is very familiar with Rochester and Mayo Clinic's Destination Medical Center initiative.
Dougherty joined the the Mayo Clinic Board of Trustees in 2012. He then became a DMC Corp. board member in April.

While the loans and $6.5 million in assistance from the city of Rochester will finance the majority of the $140 million project, people close to the project say an additional $35 million is coming from Middle Eastern investors.

Chafoulias, with limited assistance from his son Andy Chafoulias and Titan, has been working on different versions of this project since 2007.

Broadway at Center will house a 264-room Hilton Hotel, 33 apartment units and space for office, retail and restaurant use. More than $14 million — including the city's $6.5 million assistance to the developer and the remainder of infrastructure costs — is planned to be reported as DMC local contributions and credited toward the city's $128 million commitment.

There has been a lot of interest about when demolition of the empty CJ's Midtown Lounge and other buildings on that corner would begin. Once the financing for the project is locked in, that should clear the way for work to start.

May 17, 2016

Mayo Clinic to take over Biobusiness Center floor as Celyad pulls out

Mayo Clinic is returning to the fifth floor of Rochester's Minnesota BioBusiness Center, after a Belgium-based biotech firm left it empty for more than a year. 

In March 2015, the Rochester City Council approved a five-year lease for Mayo Clinic-linked Celyad to take over the fifth floor to create a prototype manufacturing facility that would add 33 jobs to Rochester.

CelyadCelyad's lease meant displacing all the Mayo Clinic workers based on that floor. Mayo Clinic moved its employees out at the start of 2015.

However, the project didn't go as planned. Celyad, formerly known as Cardio3, was unhappy when development costs came in much higher than the estimate provided by the city. 

051509biobusinesscenteratnight"The budgets we got far exceeded initial assumptions on which the project was decided," said Celyad CEO Dr. Christian Homsy in an email from Belgium in November. "Including the city support, the fit-out cost now exceeds the cost to do the same work in other locations where there is no city or state support."

Celyad halted the project before any construction work was done, so the 14,963 square feet of space remained just as Mayo Clinic left it. However, the biotech company did uphold its end of the lease and has been paying rent of $22,444.50 per month, or $269,334 per year. City officials say the company has made all of the required payments.

Since the end of 2015, the city has been looking for a new tenant to take over the fifth floor. Now, the city has approved a new lease with an old tenant.

The new deal adds the fifth floor to Mayo Clinic's lease, which already includes four floors of the seven-year-old building. 

"The lease amendment would provide for a rental rate of $17 per square foot for the 'premises,' which consists of the entire fifth floor. That rate would be in effect for a term consistent with the present term for the other four floors through April 1, 2029," according to the agreement approved by the Rochester City Council on Monday. 

Mayo-clinic-logoThat's $1 less per square foot than the $18 per square foot Celyad has been paying.

Before approving the new Mayo Clinic lease, the city council OKed the termination of the Celyad agreement. It called for Celyad to continue paying its regular rent through Sept. 30, plus "a lease termination fee" of $111,549.18. 

That fee will cover costs for the space from October to Jan. 1. Mayo Clinic will be building out the space starting in October and it will began paying rent in January. Mayo Clinic plans on using the floor to help teams that need more room.

"Planned occupancy will include relocating certain research support teams in need of additional office type space," stated Kelley Luckstein, of Mayo Clinic Media Relation, in an email.

Celyad's relationship with Rochester began in 2007, when it licensed stem-cell research by Mayo Clinic's Dr. Andre Terzic and Dr. Atta Behfar. It was called Cardio3 Biosciences back then. They have collaborated for years on the cardiopoiesis technology the company uses to repair patients' hearts by re-programming their own stem cells to regenerate cardiac tissue. Mayo Clinic owned 2.69 percent of Celyad as of March 3, 2015.

Beyond the fifth floor prototype manufacturing facility, the Celyad deal was designed to clear the way for the biobusiness to possibly build a 100,000-square-foot manufacturing facility with 350 employees in Rochester. That's what the company anticipates it will need if the Federal Drug Administration gives it a green light to take its stem-cell treatment to market.

Celyad's Homsy says Rochester now is out of the running for that.

"Celyad has assessed that a manufacturing plant in Rochester at this point of time cannot be justified.  We have opened an office in Boston from where our U.S. management is based, but we have delayed the decision on a manufacturing plant in the U.S. as we are able to manufacture all clinical lots out of our Belgian facility. As we approach commercial launch in the U.S., this situation may be revisited," he responded from Belgium by email.

Though the relationship between Rochester and Celyad has diminished dramatically in recent months, Homsy said it is not completely over.

"We continue to collaborate with Mayo Clinic, as well as with Andre Terzic, in the context of the evaluation of our CHART-1 data that should be disclosed by end of June 2016. If the data is positive, further development in the U.S. in the form of CHART-2, and, potentially, commercialization would follow," he stated.

February 17, 2016

North Broadway parcel cleared of buildings

02172016MLTbuildingdemoWhere a 140-year-old brick building once stood on North Broadway is now a hole in the ground.

Real estate investor Les Nelsonof Clear Lake, Iowa cleared away the former MLT Group building at 411 North Broadway this week.

In October, Nelson bought the building for $600,000 from Mike and Dawn Pruett. He also demolished two nearby empty buildings at 401 Broadway 08102015MLT2 and 407 Broadway last summer to make the area more attractive for developers. There's no word yet on what might happen there.

The Pruetts and partner Ted St. Mane have moved their businesses, MLT Group and MLT Video, to a 11,090-square-foot business condo in the Plaza 14 West center at 4481 North Frontage Road.

 

 

 

January 08, 2016

ArchMN mag's take on Mayo Clinic's DMC plan

20141216_dmc01_53Over the past few years, many publications have analyzed, dissected and speculated about Mayo Clinic's proposed Destination Medical Center plan.

And now Architecture MN magazine has published its own take on the plan in an article by Thomas Fisher. He looks at the plan and chats with DMC's lead urban designer Peter Cavaluzzi of the New York firm.

Here are a few excerpts that caught my eye:

• "One of them —Discovery Square—will provide a place near the Mayo Medical School for technological development and entrepreneurial spin-offs from the school and the Mayo Clinic. That integration of research and practice, innovation and application, fits the Mayo model perfectly, and Discovery Square may, ultimately, do the most to secure the economic future of the city, as start-up companies emerge and grow. The Perkins Eastman master plan calls for an open space at the center of this district, above which skyways converge into an elevated glass building that, while a good idea, looks too big for the space and a bit ominous in the renderings."

6a00d83451cc8269e201b7c791bc82970b-300wiIt's nice to hear an expert question the big glass structure slated for Discovery Square. My uneducated eye has always thought that it looks like a big, glass "Independence Day"-like spaceship landing on downtown in the renderings. However, I have never be very good at visualizing what development projects will look like in reality.

• "Another big move in the master plan—the Downtown Waterfront—links the government center and the civic and art center with pedestrian-friendly plazas that open up to a widened Zumbro River, finally freed from its current flood-control channel to become a real asset for the city. This district’s sweeping set of bridges, embankments, and buildings will break Rochester’s insistent street grid and provide a place for community events and celebrations that today have few options for outdoor venues. A grand gesture like this doesn’t happen without controversy, however. Some have questioned the planned removal of the existing public library near the river, even though, as Cavaluzzi observes, the library had already begun to look at moving, having outgrown its small, nondescript building."

Hhmmmm.... I have never heard the Rochester Public described as a "small, nondescript building" before. I guess it is a matter of perspective.

Read the full ArchMN article here.

 

January 05, 2016

Credit union buys land for new branch

A Wisconsin credit union with plans to build a second Rochester branch recently bought a parcel of land for $1.25 million.

Altra Federal Credit Union bought land on Dec. 14 in the Chateau Circle commercial development at 55th Street Northwest and Chateau Road. That means the new branch will be located near the Walgreens drug store planned for that area.

O"We've been looking for a new spot to build a new full-service branch for quite a while," said Cheryl Dutton, vice president of marketing of the La Crosse, Wis.-based credit union. "The Rochester market is a very important market to us."

While the land is acquired, Dutton said the project still is in the initial stages, so there's no timeline yet.

Altra opened its first Rochester branch in 2012 at 123 16th Ave. SW in the Shoppes on Second development. It now has five on staff.

"The growth has been exceptional. However, it's a very small office in a very busy strip mall. To service our members better, we'd like to build a larger branch, usually 4,000 to 5,000 square feet," she said.

The credit union is aware residents in the Chateau Circle area have voiced some concerns about the commercial development in their neighborhood.

"We plan to be very good neighbors," said Dutton. "We think it's going to be a great area for us."

Altra began in 1931 as the Trane Employees Credit Union with a history similar to that of the IBM Mid-America Credit Union, which became Think Federal Credit Union. It has Minnesota branches in La Crescent and Winona. Overall, it has 17 locations in eight states.

December 24, 2015

Downtown art gallery officially closed

Downtown Rochester lost some color today when  Southeastern Minnesota Visual Artists (SEMVA) closed up their gallery.

12242015semvaclosingsignEarlier this month, SEMVA President Andy Westreich sent messages to the cooperative's 84 artists saying that the gallery could no longer afford its high-profile spot at 16 First St. SW on Rochester's Peace Plaza.

"It is with great sadness that I have to tell you that we were unable to negotiate a reasonable lease renewal, and the board of directors has voted to close the SEMVA Gallery after 23 years in business," he wrote. "This was not an easy decision to come by, and many factors played a role in our final vote."

The letter cited a number of factors in the decision, including a 40 percent increase in rent and a decrease in traffic following the closure of popular downtown businesses like the Barnes and Noble Bookstore and Michaels restaurant. SEMVA sales are down 13 percent compared to 2014.

Beyond the rent increase, SEMVA leaders also mentioned that almost five months of negotiations with landlord George Psomas were held up by his plan to change the renewal clause in the lease from five years to one year.

Today was the gallery's last day. Artists were packing up their works.

However, the cooperative leaders are confident that they will be able to find a new home of the gallery in the near future.

 

December 09, 2015

Is Medisun's interest in Rochester cooling?

Of the three most expensive real estate listings for houses for sale in Rochester, two are owned by a Hong Kong billionaire who has not ever lived in them.

Danny Wong is the CEO of Medisun International Holdings Ltd., which is collaborating with Mayo Clinic to bring more Chinese patients to Rochester. Medisun also is a major investor in Celyad, formerly Cardio3, which is leasing an empty floor of the Minnesota Biobusiness Center in downtown Rochester.

734c36a08cc30596-4066082Wong purchased large Rochester residences at 615 10th Ave. SW and 2515 Crest Lane SW in the fall of 2014. He paid $1.3 million and $1.4 million, respectively. At the start of this year, Medisun announced a deal with Mayo Clinic.

"The medical service will be provided by Mayo, and everything else will be provided by Medisun," said then-Medisun spokesman Dr. Jason Zhang in January.

While in Rochester this summer, Wong had his photo taken at Mayo Clinic with local leaders, including developer Gus Chafoulias and Mayo's Lisa Clarke, who leads the Destination Medical Center initiative.

However, Medisun's interest in Rochester seems to have cooled a bit since then.

By summer, Medisun halted construction of a $1 million office on the west corner of Titan Development's H3 Plaza. The offices were slated to span part of the second and third floors of the building at 300 Broadway.

00e2d817d5550daa56a1d0ade5d78548l-m0oMayo Clinic commented at the time that Wong planned to use one of his two Rochester estates as a guest house for the Chinese patient venture. Construction to an indoor pool at 2515 Crest Lane SW began around that time.

That guest house project seems unlikely now, because Wong has listed both of his Rochester estates for sale. The 2515 Crest Lane SW house is priced at $1.7 million, and the 615 10th Ave. SW is listed at $1.4 million. If they sell at the list price, Wong will make $400,000 on his short-term investment.

Only one Rochester property currently is listed at a higher price — $2 million — than Wong's estates, according to the MLS listings. A total of 10 residences in Rochester currently are priced at more than $1 million.

Does the sale of these estates signal any changes in Medisun's relationship with Mayo Clinic? No one from Medisun was available for comment, but Mayo Clinic said nothing has changed.

"… We continue to work with the MediSun on specific engagements," stated Mayo Clinic spokeswoman Duska Anastasijevic by email Tuesday.

While those "engagements" continue to develop, there are two nice Rochester estates available for local home buyers.

October 28, 2015

New Roch. substation planned for Epic, Mayo Clinic growth

Mayo Clinic's partnership with Epic Systems, the largest electronic medical records firm in the United States, is driving the construction of a new $6.1 million Rochester Public Utilities substation.

Epic_Systems_112109_SignVerona, Wis.-based Epic Systems has been negotiating with RPU since June about the project. Epic says it needs more power capacity in the area to support future growth of the Mayo Clinic Data Center at 4710 West Circle Drive. The new Douglas Trail substation is slated to be built by the data center on land currently owned by Mayo Clinic.

The RPU board approved a "memorandum of understanding" about the project with Epic at its Tuesday night meeting. An escrow account already has been set up to fund project.

The memorandum states, "Due to the planned transfer of selected Mayo Data Center assets to Epic, Epic requests incremental electrical capability and capacity, needed to accommodate projected business growth in forward years…"
Epic has agreed to pay for the majority of the $6.1 million project, with RPU contributing $1.016 million for additional features that Epic doesn't need. The agreement also allows for Epic to apply  Mayo4710technologyparkfor up to $2.03 million in rebates over 10 years. The goal is to have the new substation up and running at least by April 1, 2017.


Rochester attorney Mark Utz spoke to the board as a representative of Epic. He said the deal  "Provides capacity not just for Epic, but a tremendous opportunity for the city of Rochester … to have a third substation in an incredible quadrant for Rochester. This is a win/win for the community, for RPU and for Epic."

Bruce Richards, Epic's director of facilities and engineering, assured the board his company is serious about coming to Rochester.

"This is a long-term situation for us. We're bringing in quite a few people to town," he said. "We'll start out with 80 to 90 people to the data center to work with Mayo Clinic."

Richards told the RPU board the additional capacity is needed for the potential that the current data center could grow to three times its current size.

Mayo Clinic built the $33.7 million, 60,000-square-foot computer support center in 2012. The data center was built to support all three of Mayo Clinic's campuses — Rochester, Jacksonville, Fla., and Scottsdale, Ariz.

"Epic is expected to take title of the property nominally in December 2015, with site grading to begin in spring 2016, according to the RPU/Epic agreement. The agreement also states that, "It is contemplated that the City of Rochester, for the benefit of RPU, will acquire from Epic the title of the real estate where the substation and related infrastructure will be located.

Richards did not elaborate on what Epic plans to do at Mayo Data Center, though remote hosting medical records is a possibility. In recent years, Epic built a massive data center in Verona, Wis. to offer remote medical record hosting for its clients.

6a00d83451cc8269e201b7c791bc82970b-800wiEpic and Mayo Clinic began working together early this year, when Mayo chose Epic to handle Mayo Clinic's electronic medical records. The relationship is developing into a close collaboration. Mayo's Chief Administration Officer Jeff Bolton has said that Epic has shown "a strong interest" in being part of the planned Discovery Square development in downtown Rochester. Discovery Square is part of Mayo Clinic's Destination Medical Center initiative.

Epic has about 8,000 employees and had $1.8 billion in revenues in 2014. Epic's software already is used by about 350 health-care organizations that care for 54 percent of U.S. patients.

Mayo Clinic is not Epic's only major partner in northwest Rochester. In May, IBM Watson Health, the health care unit of IBM, announced it has begun working with Epic as well as Mayo Clinic to add the Watson' super computer's cognitive capabilities to electronic health records. It's not clear if IBM is involved in the West Circle Drive data center project.