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91 posts categorized "Destination Medical Center news"

August 26, 2016

Mayo Clinic employment numbers are up and down

The number of Mayo Clinic employees has swung dramatically up and down since the passage of the Destination Medical Center legislation. 
 
Mayo-clinic-logoOn Thursday, Mayo Clinic leaders touted Rochester job growth to the Destination Medical Center Corp. board, saying the clinic has added 3,370 new positions in the last 12 months. However, that growth didn't quite carry the clinic's Rochester employee numbers out of the low point they were in last year.

"We are growing," said Jeff Bolton, Mayo Clinic's chief administrative officer and chairman of the Destination Medical Center Economic Development Agency Board. "Mayo is all in and committed." 

Bolton said Mayo Clinic had 34,175 employees in Rochester at the end of July. That is an increase of 3,370 jobs from the low point of 30,805 Rochester employees in August 2015.

While Mayo Clinic is adding local jobs, its employment numbers still are well below the 34,562 employees the Rochester clinic recorded at the end of 2015.

The figures show that 3,390 jobs were lost in 2015 between January to July. Then the numbers rose 3,757 by the end of December.

"It’s difficult to point out any trends in a 12-month cycle," Mayo Clinic spokesman Karl Oestreich said via email. "Mayo Clinic usually experiences about an average 2 percent annual growth. This rate varies each year — some years (like last year) more and other years less. Last year’s growth is ahead of that clip."

During his report to the board, Bolton said the increase in the past 12 months is because of patient demand being "extremely strong." He cited that new jobs are "a broad range of positions."

When asked what the average salaries are for the new jobs and what type of jobs they are, Mayo Clinic did not have that information available.

"We haven't done that analysis as to what job codes comprised most of the new/incremental positions. Good question, but unfortunately we don’t have a quick answer," Oestreich said. 

The DMCC board was impressed by Mayo Clinic's Rochester employment increases.

"We're asked all the time about what is going on in Rochester. We may not be doing too much on the brick and mortar, but you're on track," said board member and former Wells Fargo Minnesota CEO Jim Campbell. "You got about 10 percent in a year, which is pretty incredible job growth in the state. You have to be almost at the top."

After the meeting, State Sen. Dave Senjem proudly shared the employment numbers on his Facebook page.

"Quietly done without boasting or fanfare. Pretty amazing, more to come," he wrote.

At the end of his report, Bolton emphasized that Mayo Clinic is growing in Rochester as part of the DMC pact with the state.

"We're extremely bullish," he said. "We're really enjoying the opportunity to partner with the EDA, the city, the county and state in realizing the vision of DMC."


Mayo Clinic employees

in Rochester


• 34,175 - July 2016

• 34,562 - December 2015

• 30,805 - August 2015

• 34,200 - December 2014

• 33,197 - December 2013

• 34,223 - December 2012

• 33,156 - December 2011

• 31,998 - December 2010

• 31,966 - December 2009

 

August 24, 2016

Ex-Michaels restaurant sells for $5.5 million in downtown Rochester

More than a year and a half after one of Rochester's most beloved restaurants closed its massive doors, the prime downtown property has unexpectedly sold for $5.5 million.

The buildings which housed Michaels restaurant at the corner of South Broadway and Center Street for 64 years were purchased by Harbor Bay Real Estate Advisors of Illinois on Friday. The sale included four properties — 11, 13, 15 and 17 Broadway.

08242016michaelsOlmsted County estimated the total market value of the properties at $1.17 million, which means it sold for almost five times its estimated value.

Harbor Bay bought the buildings from 15 South Broadway LLC, which is described as a joint venture owned 50-50 by the Chafoulias and the Pappas families. That group bought the property on Jan. 6, 2015, from the Pappas family for $1.4 million, almost a fourth of what it sold for last week.

The high profile 2015 sale and emotional closure of Michaels was described as clearing the way for redeveloping the land and then connecting the new building to Gus Chafoulias' proposed Broadway at Center tower via a skyway across Broadway. Michael Pappas described the plan in late 2014 as involving closing the restaurant, demolishing the buildings and developing a new retail center that would connect with both the Shops at University Square and the planned Broadway at Center project, both Chafoulias properties.

Why change the plan and sell the buildings to an outside developer?

"There are many family members on each side and they felt it was a very fair price and preferred selling to developing the site," wrote Sheila Thoma, spokeswoman for the Chafoulias family's Titan Development and Investments company.

No member of the Pappas family was available for comment on the deal.

Thoma added that Gus Chafoulias still plans to connect whatever is built on the Michaels site to his long-delayed $145 million Broadway at Center on the southeast corner of Broadway Avenue and Center Street. Broadway at Center is the first high-profile project approved by the Destination Medical Center Corp. in 2015 to count toward Rochester's DMC commitment to the state.

"We have an agreement with the group that purchased and they want a skyway as well," she wrote.

Mark Bell and Tom Lund, the partners who run Harbor Bay, were not available for comment on Tuesday, so it is not known what their plans are for the Michaels property. However, the duo already have a housing development under construction in Rochester.

Harbor Bay is the company behind the 211-unit Preserve on Maine apartment complex at 4010 Maine Ave. SE. The developer describes Preserve on Main as "a place where luxurious residences and resort style living meet." Rents for the 17 styles of apartment range from $975 to $1,995 a month.

Chafoulias' Broadway at Center project has been stalled for months awaiting a financing deal to be finalized before starting demolition and construction. In July, Chafoulias announced that his team was terminating its relationship with Saudi Prince Turki Bin Abdullah Bin Abdul Aziz Al-Saud and Anas Abukhadra, of Minneapolis, because they had failed "to fulfill (their financial) obligations."

The project is still awaiting financing to clear the way for a needed $105 million loan to help finance the 23-story complex.
 
Could this latest deal with Harbor Bay be connected to financing Broadway at Center? Thoma says definitely not. She wrote that the Michaels sale has nothing to do with Broadway at Center other than the proposed skyway link.

August 23, 2016

Mayo's Noseworthy vs Cleveland Clinic's Consgrove

While Mayo Clinic and Cleveland Clinic vie for the top doctors and patients, their respective CEOs are also being compared.

Here's the breakdown of how Mayo Clinic's Dr. John Noseworthy and Cleveland's Dr. Toby Cosgrove have scored in Modern Healthcare's annual "Top 100 Influential People" list plus the salaries they were paid each year.


Rank in 2011
* Noseworthy - 71, earned $2 million
* Cosgrove - 56, earned $2.5 million

Rank in 2012
* Noseworthy - 17, earned $1.7 milion
* Cosgrove - 21, earned $3.1 million

Rank in 2013
* Noseworthy - 15, earned $1.9 million
* Cosgrove - 16, earned $3.2 million

Rank in 2014
* Noseworthy - 16, earned $2.3 million 
* Cosgrove - 72, earned $4.1 million

Rank in 2015
* Noseworthy - 8
* Cosgrove - 12

Rank in 2016
* Noseworthy - 30
* Cosgrove - 29

 

August 16, 2016

New biz incubator is up and running

08152016collider1The renovation of the 115-year-old Conley-Maass building at 14 Fourth St. SW by owners Traci and Hunter Downs is almost complete

The Bleu Duck Kitchen on the main level of the building is ready to open to the public next week.

0816collider2Meanwhile, upstairs, the Downs' new Collider business incubator is officially open for business under the management of Jamie Sundsbak. About one-third of the works spaces are contracted out so far, he said.

On Monday's opening day, Chris Lukenbill moved in his software development teams, which works for Bright Agrotech of Laramie, Wyo.

August 04, 2016

Name of new complex revealed as Flats on Fourth

The Buckeye is out, as is Ovation.

The name of the new 92-unit apartment and retail complex being built on the corner of Fourth Street and Third Avenue Southeast in downtown Rochester has fluctuated during the planning phase. 

F89c28e7467b81cdb720c0c067eca5d3_f252Now that a major hole has been dug across from the Olmsted County Government Center and Rochester City Hall, the developer unveiled the official name for the $15 million project.

Nate Stencil, of Stencil Homes, confirmed Wednesday it is now called Flats on Fourth. The South Dakota developer is driving the project with his partner, Sean A. Kaufhold.

The new name was announced this morning during a public event organized by the Destination Medical Center Economic Development Agency, according to Stencil.

The name was a minor issue in the neighborhood, because some people objected to having it called The Buckeye. The complex is being built on the corner where the longtime Buckeye Liquor store once stood. The store since has moved a little farther south down Third Avenue.

As the project progressed through the early planning stages, the project name was changed to Ovation on Stencil's website. However, it turns out that was just a possible name that was ultimately rejected.

Now, when this complex opens next summer, the name over the door will be Flats on Fourth. 

While they haven't started marketing the space, Stencil says there already has been interest in the ground level retail space in the complex.

"We've had some inquiries on the retail end, but not from the kind of retail we are looking for. We're looking for very specific tenants that will be a good fit for that area," he said.

Stencil recently built and opened two other apartment complexes, Nue52 and Kascade Place. Both are near Rochester's 65th Street Northwest interchange across U.S. 52 from the North Menards store. 

Another Rochester apartment project by Stencil, The Pines, still is under construction. Once Flats on Fourth and The Pines open, Stencil will own 463 apartments in Rochester. 

 

July 07, 2016

Broadway Flashback - early 2013 Broadway at Center plan

Following Wednesday's announcement about the delay in the financing for the now-$145 million Broadway at Center project, I decided to look at back an earlier version of that project rolled out by Titan Development and Investments in 2013.

Here's an article I filed on May 31, 2013 with an assist from Managing Editor Jay Furst. The rendering is of the version of Broadway at Center introduced at Titan's press conference:

Just a week after Mayo's Destination Medical Center plan was approved by the state, a Rochester developer announced plans today for a 25-story tower at the corner of South Broadway and East Center Street.

6a00d83451cc8269e2019102c4aed3970c-800wiThe Broadway at Center mixed-use project, proposed by Andy Chafoulias' Titan Development and Investments, would have about 30,000 square feet of Class A office space, a 150-room four-star hotel, 150 market-rent apartments, a "high-end grocery" and a Minnesota-branded steakhouse, among other attractions.

The announcement was made at a news conference this morning at Titan's offices in the Minnesota Biobusiness Center. Chafoulias didn't attend; the announcement was made by John Beltz, vice president of brand revenue development.

Titan is "poised for some very significant growth and contributions to Rochester," Beltz said, citing the company's planned restaurant and entertainment complex three blocks south at the C.O. Brown building site and a seniors apartment project further north on Broadway.

No cost estimate was provided for the Broadway at Center tower, and Beltz said the tower could go higher as planning proceeds -- possibly topping the Broadway Residences and Suites tower next door, which is the tallest building in Rochester and southern Minnesota. As planned, the building would have about 300,000 square feet of space and would be connected to the skyway system and a planned city parking ramp on the block.

The new building would be on the northwest corner of the block bounded by South Broadway, East Center Street, First Street Southeast and First Avenue Southeast. The Broadway Residence and Suites tower is on the southwest corner, and the new project would be on the current site of CJ's Midtown Lounge, Jakobson Management Co. and Ginny's Fine Fabrics.

The goal is to have a "hole in the ground" and construction underway next year, Beltz said. He declined to identify the hotel, restaurant and retail tenants who are in discussions with Titan but said in a news release that they're "finalizing negotiations with several recognizable Minnesota brands."

Rochester's lack of a top-tier hotel brand was often cited during the DMC legislative process as something the city needs to attract national and international medical visitors.

The announcement signals Andy Chafoulias taking the wheel of a project envisioned by his father, Rochester developer Gus Chafoulias, in 2007. That proposal was for a two-tower mixed-use project with retail, apartments and office space as well as possible space for University of Minnesota Rochester.

As with the previous version, Rochester architect Hal Henderson of HGA Architects and Engineers would direct the project design. Darren Schlapkohl, Titan vice president of development and construction management, said the project has "been in design for some time and continues to evolve."

Mayo's DMC initiative, which was announced in January and won legislative approval less than two weeks ago, is "an excellent addition to the vision" for Rochester, Beltz said, but Henderson said the Broadway at Center project has been at an advanced stage for at least six months.

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.