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29 posts categorized "Economic development"

April 09, 2014

Allegiant Air pulling out of Rochester… again

Allegiant Air announced Tuesday that it's pulling out of the Rochester International Airport and will end its weekly nonstop flights to Arizona on May 14.

Allegiant"We are always disappointed to end service in a market," said Eric Fletcher, Allegiant's manager of airports. "We thank the Rochester International Airport for their partnership and apologize to any travelers who are inconvenienced by this decision."

Allegiant began offering offering two weekly nonstop flights to Mesa, Ariz., in November 2012, with an eye to serving as a connection between Rochester and Mayo Clinic's Phoenix campus. The 166 seats flights travel on Thursday and Sunday.

A recent study of the airport activity from July 2012 to June 2013 found that Phoenix/Mesa was the top destination from the airport. Allegiant in Rochester had 15,580 passengers during those 12 months. That accounts for 7.4 percent of the passengers in this market. For the same period, Delta accounted 44.7 percent of the airport's passengers, and American had 41.6 percent.

That same study found that Allegiant tallied about $1.4 million revenue during those 12 months.

This marks the Las Vegas-based airline's second failed attempt to serve the Rochester market. From 2008 to 2010, it offered bargain nonstop flights to Las Vegas. During 2008, 27,854 passengers flew out of Rochester to Las Vegas on Allegiant. Those flights ended in 2010 because of lack of demand.

When Allegiant returned to Rochester with a focus on Arizona, there was no concern about demand with the built-in Mayo Clinic traffic plus vacation trips.

“We’ve had good luck returning to markets that we’ve previously pulled out of. We feel good about coming back to Rochester,” said Allegiant's Fletcher in 2008.

Rochester's airport has long worked at attracting and keeping airlines, although it's hindered by lower cost flights from Minneapolis.

In August 2012, the Rochester International Airport was awarded a $500,000 grant from the U.S. Department Transportation to help attract airlines to provide direct flight service to more destinations. The Rochester City Council approved a local match of $225,000, for a total of $750,000.

The airport's application included a letter from Frontier Airlines, saying the Denver-based company would be interested in providing direct flights if Rochester could offer incentives. The airport has not added any new flights or airlines, since that grant was presented.

Mark Sixel, who did the recent study for the airport, concluded his report by saying Rochester has a large enough passenger market to support more flights. However, numbers alone may not be enough in this competitive environment.

"It is likely the Rochester International Airport will have to offer some some kind of risk mitigation program, including waivers, marketing and even ground handling to convince another airline to launch service," he wrote.

Most experts say the bottom line is that the airport likely will need to offer financial enticement of some sort to attract more service. After establishing the relationship, then the passenger numbers need to be there to keep the service.

March 26, 2014

Area manufacturer to expand, add 14 jobs

A long-time southern Minnesota manufacturer says a $215,000 state tax credits based on adding more jobs helped convince it to expand here rather than on the West Coast.

M60stdHarmony Enterprises, which makes and services recycling and waste management equipment in the small town of Harmony, are one of five companies chosen for the new Minnesota Job Creation Fund program. The Minnesota Department of Employment and Economic Development announced the the first round of businesses on Tuesday.

If Harmony Enterprises does as it has pledged and adds 14 new jobs to its current staff of 60 plus builds a $1.1 million expansion within two years, it will receive the $215,000 in tax credits over four years. The manufacturer, which also has a location in France, has been based in Harmony since 1962.

Owner and President Steve Cremer says the company has been growing quickly in the past few years and more growth appears to be on the way, particularly in Africa and Asia. That prospect had Harmony Enterprises considering its options on how expand its production. With so many of the firms competitors and customers located on the West Coast, they start looking at the possibility of adding a facility in California or Arizona.Bcb2003-open


Then they found out about the $24 million Minnesota Job Creation Fund, which began in January.

"We wanted to stay here. The community is good to us," said Cremer. "Now we'll start construction of a 6,000-square-foot addition in the spring."

The plan is to create a new drive-through shipping department, which will improve efficiency for the company and open up the current shipping area to revamped into more production space.

In addition to the improved shipping and the expanding production area, Harmony Enterprises is also ramping up its new service offerings. About a year and half ago, it launched a new service business. It contracts directly with companies to maintain and repair all recycling and waste management machines.

"That's our really big growth area. Many of the new jobs will be service jobs," he says.

March 21, 2014

DMC origins stem from lunch chat six years ago

For the first part of two DMC sections, I chatted with Dr. Glenn Forbes, Bruce Fairchild, John Wade, Jeff Korsmo and Lisa Clarke about the evolution of the concept of the Destination Medical Center.

DMCMy article tracks the journey of the idea from a casual lunch conversation in March 2008 to DMC's appearance in the 2012 sales tax vote and the unveiling of the full concept in 2013.

Obviously, the idea of the City of Rochester and Mayo Clinic working from the playbook is not a novel idea in the Med City. Some at Mayo dismissed my use of this luncheon chat as a startng point. However, they weren't about to offer any better dates as begin DMC's genesis other than the formation of Mayo Clinic 250 years ago.

Unfortunately, the DMC section wasn't quite large enough to accomodate an article that tracked each milestone since 1889, so I just went with the March 2008 conversation.

Here's a little bit of what turned into a very lengthy article. Check out the rest in this weekend's DMC section.

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Destination Medical Center is such a common topic in Rochester today that it's hard to keep in mind that the concept has only been known publicly for just over a year.

But the concept that grew into the $6 billion DMC initiative appears to have started with a chat at a Virginia conference center about six years ago.

Flag01-bdyjpgThat conversation was in March 2008 at Mayo Clinic's National Symposium on Health Care Reform at Lansdowne Resort in Leesburg, Va. The place was bustling with national leaders in the health care business. Representatives of the presidential candidates were there, promoting their health-care reform plans.

But not everyone at the conference worked directly in health care. Mayo Clinic flew out two local business leaders — John Wade, then-president of the Rochester Area Chamber of Commerce, and Bruce Fairchild, then-regional director of Interstate Hotels in Rochester — as guests.

Since November 2007, Wade and Fairchild had been talking about developing a plan to bring the community and its largest employer into sync to serve more efficiently the thousands of people who stream into Rochester. While it wasn't a new idea, a move to formalize such a plan was gaining momentum. Amid the action at the symposium, the pair decided they should share their ideas with Mayo Clinic.

They asked to meet with Mayo Rochester CEO Dr. Glenn Forbes, without much expectation that he'd have time to meet.

"But true to form, Dr. Forbes took the time, and we had lunch together," Wade said in a recent interview. Forbes was Mayo Rochester CEO from 2006 to 2009, and "his very nature is to be collaborative," Wade said.

The three met in a restaurant at the Lansdowne conference center, and their lunch unexpectedly turned out to be a long one.

It started with the trio "blue sky, brainstorming ideas," said Fairchild, who now manages hotels in Texas. But the talk quickly picked up momentum.

"We were getting increasingly excited about the possibilities," said Forbes, who is now retired from Mayo Clinic. "The lunch went over several cups of coffee for about 2 1/2 hours."

February 28, 2014

Furniture seller to move into Roch.'s empty Best Buy store

A well-known Minnesota furniture retailer has plans to open to new store in Rochester.

Schneiderman’s Furniture has signed a lease to take over the empty 30,991-square-foot store at 4540 Maine Ave. S.E., says Larry Schneiderman, who leads the firm's board. His company is leasing the space from Best Buy, which closed its south Rochester store there in 2012.

BestbuyDarci Fenske of Paramark Real Estate brokered the lease deal to bring furniture business to Rochester's Shoppes on Maine commercial development.

Schneiderman’s is a third generation, family-owned business with four stores in the Twin Cities and one in Duluth. It was founded by Larry Schneiderman's parents, and now his son, Jason Schneiderman, is the president of the business.

This will be the company's first foray into southern Minnesota.

The elder Schneiderman explains that he and his son Jason started researching options for expansion last year. Specifically, they were looking for a strong market within range of their distribution center in Woodbury, Minn. It didn't take long for Rochester to rise to the top of the list.

"It's a solid market, but also a solid city. We're really looking forward to opening in Rochester," says Larry Schneiderman. "Of course, there's the exciting things in the works for Rochester that we've all been reading about. But we think it's a good decision to be there, whether that all happens or not."

While the plans still are in the early stages, he hopes to open the new store early this summer. An estimated 16 to 20 employees are expected to staff it.

"We would like to, obviously, move as quickly as we can," Scheiderman says.

The first step will be to remove the building's distinctive Best Buy yellow and blue price tag facade. Then the interior will be completely overhauled "from the floor up to the lights," he said.

As real estate sales and home construction start to climb as the economy improves and the Destination Medical Center initiative begins to attract developers, competition is beginning to heat up in the furniture market.

Jim Sather and Mark Byer, who own Rochester's Furniture Superstore Factory Outlet and America's Mattress stores, have finalized plans to combine both of their stores into the soon-to-be-empty Menards facility at 5150 U.S. 52 North. The plan is open the mega-store this summer.
  
Not far from the site of Schneiderman's new location, two Rochester couples are working to open the independent Deutsch Furniture Haus in a 7,000-square-foot space at 3551 Commercial Drive Northwest in early April. It will specialize in local Amish-made furniture.

January 21, 2014

Apache Mall applies to develop Scheels store, new restaurant

Here's some from an article I have in today's paper about Scheels, Sears, the Apache Mall plus plans for a new stand-alone restaurant by the water tower in front of the mall.

The full article will be on www.postbulletin.com and, of course, in print.

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The hole left by the departure of Sears from Apache Mall appears likely to be filled by a Scheels All Sports store.

Plans to expand the mall's anchor spot to make way for the popular sporting retailer were submitted to the Rochester-Olmsted Planning Department last week. The plans also call for construction of a stand-alone restaurant nearby.

Scheelsmap1The plans show the now-closed two-story Sears store being partially demolished and expanded to 149,000 square feet for Scheels. Construction could close the mall parking lot roadway in front of the store, which would require a temporary road.

The development proposal also includes a new 9,000-square-foot restaurant building on the north side of the mall roadway near the Scheels project. The proposed building would be on the east side of the city water tower. While it's labeled as a restaurant, no specific name appears in the documents.
Scheelsmap2
Officials from the Apache Mall declined to comment on either the Scheels project or the new restaurant. On Friday, Jason Loney, Scheels' vice president of store development, said a final agreement had not been finalized between the North Dakota retailer and the mall. It's not unusual for participants in a development deal to delay signing until all official approvals are obtained

October 17, 2013

IBM's Watson + Cleve Clinic and Mayo + Optum

Improving healthcare is an ongoing project, particularly here in Rochester.

Here are a couple locally linked tidbits I came across this week about efforts that are using technology to attack this issue.

IBM-Watson-Jeopardy-500x285First, everyone remembers IBM's Jeopardy-playing supercomputer Watson. Much of its development occured here in Rochester. I remember the UMR hosting a big viewing session for local business leaders and Mayo Clinic execs, so everyone could watch the celebrity computer answer Alex Trebec.

These days Watson is specializing in helping doctors at the Cleveland Clinic. They announced some developments this week.
Ibm-watson-david-ferrucci-2IBM Research unveiled two new Watson-related cognitive technologies that are expected to help physicians make more informed and accurate decisions faster and to cull new insights from electronic medical records (EMR).

The projects known as "WatsonPaths" and "Watson EMR Assistant" are the result of a year-long research collaboration with fa culty, physicians and students at Cleveland Clinic Lerner College of Medicine of Case Western Reserve University. Both are key projects that will create technologies that can be leveraged by Watson to advance the technology in the domain of medicine.

• WatsonPaths explores a complex scenario and draws conclusions much like people do in real life. When presented with a medical case, WatsonPaths extracts statements based on the knowledge it has learned as a result of being trained by medical doctors and from medical literature.

WatsonPaths can use Watson's question-answering abilities to examine the scenario from many angles. The system w Watson2orks its way through chains of evidence -- pulling from reference materials, clinical guidelines and medical journals in real-time -- and draws inferences to support or refute a set of hypotheses. This ability to map medical evidence allows medical professionals to consider new factors that may help them to create additional differential diagnosis and treatment options.

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Of course, Mayo Clinic's involved in many projects to improve medical treatments and healthcare in general.

One such project is the "strategic research alliance" Mayo Clinic formed in January with OptumHealth, a technology and consulting division of the Minnetonka, Minn.-based health insurer UnitedHealth Group.

Together they launched Optum Labs in Cambridge, Mass. Optum Labs CEO Paul Bleicher spoke about what they are doing at a conference this week.

Mayo_optum_690Optum Labs will use claims and clinical data to answer pressing health questions. It will use a database that includes 149 million patient records from UNH, electronic medical records covering 5 million lives from Mayo Clinic, and 12 million electronic medical records from Humedica.

Speaking at the recent StrataRx conference in Boston, Optum Labs CEO Paul Bleicher, M.D., Ph.D., said Cambridge, Mass.-based Optum will use advanced analytics and data visualization techniques to support research and innovation projects that will improve patient care and lower cost.

The new partnership of Mayo Clinic and OptumHealth also represents a source of new opportunities for healthcare entrepreneurs, said Bleicher, who expects new health IT companies to emerge from this effort. "That is one of the goals," Bleicher said. "We want to develop technologies and innovations that could be spun off into companies, in collaboration with venture capitalists."

He said Optum Labs is actively seeking other partners and "accepting applications from anybody doing research who is willing to do so with complete transparency, in a non-commercial fashion." The mission is "very public, publication research that will advance the cause of healthcare and anyone who participates." Influencing healthcare policymakers is also one of the goals, he said.

ViewMediaAnother priority of Optum Labs is enlisting "new partners who will bring additional data of high value," Bleicher said. "We want other payers - and everybody - to be in the tent, because if all of the data is in one place, there is opportunity to dive deep into it." It will also be important that "the findings don't stay stuck in 'silos' but are distributed widely, so they become valuable for more than just a few organizations."

The cost of some of the projects Optum Labs undertakes could be shared by National Institutes of Health grants or by partnering with life sciences or IT companies, Bleicher added.

Mark Hayward, administrator of Mayo Clinic's Center for the Science of Health Care Delivery, said there will be "information technology that will come out of our labs that will spin off new technologies and methodologies."

September 12, 2013

Another downtown Roch. building sells

Another downtown Rochester building has sold to a local developer as the Destination Medical Center-driven rush to buy property continues.

The building at 12 Fourth St. S.W. was purchased for $400,000 on Aug. 30 by AC Acquisitions LLC of Rochester, a Titan Development & Investments company. The 63-year-old building was sold by Roberta Herrell.

Titan is locally owned by the Chafoulias family, with Gus Chafoulias as chairman of the board and Andy Chafoulias as CEO.

The purchase is described as "a forward thinking investment" by John Beltz, Titan's vice president of brand management and development.

IMG_20130909_141341_696With no specific plans in the works, Beltz says no immediate changes are expected. Words Players, the nonprofit youth theater group using the building, will remain as a tenant.

The Chafoulias family has spearheaded a number of major developments in downtown Rochester in the past, including Shops at University Square Mall and the Doubletree Hotel. Two recently proposed Chafoulias projects that were announced in the wake of the DMC wave include a hotel/apartment complex on North Broadway and a multi-use building on South Broadway expected to feature an Italian restaurant, jazz/blues bar and other businesses.

The Fourth Street building stands adjacent to a rambling 15,000-square-foot building at 405 S. Broadway, which a nonprofit group hopes to demolish and re-develop as a four-story arts center, to be called the Rosie Belle Performing Arts Theatre.

Jan Daly, the founder of the Rosie Belle organization, said whatever eventually happens with the Fourth Street building should not impact her project.

"There's no change with our vision or mission," she said.

August 22, 2013

41st Street re-development projects cooking

There's lots cooking on the U.S. 52 North Frontage Road in northwest Rochester by the corner of 41st Street with one construction crew preparing a site for a new building and another one is re-vamping another empty fast food place right next to the other project.

The long-empty Burger King (and its overgrown grass) has been leveled to make way for a new commercial building. I've written about this project a few times and even my erudite co-worker, The Answer Man, mentioned it in a column this week.

DemolishedburgerkingInSite Real Estate, based in suburban Chicago, is creating a 7,500-square-foot commercial building on the site of the former restaurant at 4107 U.S. 52 North Frontage Road. InSite says 5,000 square feet of the building is already locked in by a future tenant, Mattress Firm. Mattress Firm previously had a store in south Rochester.

InSite bought that property from Dallas, Texas-based Z's American Properties for $655,000 in May. Z's American Properties originally bought the site in 1996 for more than $1 million. The firm also owned a Burger King building on South Broadway. It sold that to the University of Minnesota Rochester and demolished to clear the way for a future campus.

ExtacojohndominosThe long-empty Taco John's restaurant next to the InSite construction project is being re-vamped into a new home for Marty Gritz's north Rochester Domino's pizza.

Gritz, the owner of five Domino's pizza franchises, bought the former Taco John's building on July 26 for $320,000 with plans to move his north Rochester Domino's from its current location at 2986 41st St. N.W., near Home Depot and IBM.

The plan is to make the move before the end of the year, but first he plans to revamp the building to fit Domino's new interactive "Pizza Theater" format. That means a welcoming and colorful setting with an open kitchen that puts the pizza makers on display and encourages customers to watch their pizzas being made. It flips the previous kitchen layout, which showed only the backs of Domino's cooks.

August 09, 2013

Rochester's 'Dirty little secret'

DeparturesarticleSince today is the first official meeting of the newly established Destination Medical Center Corp., I was looking at some travel articles on Rochester and Mayo Clinic.

I stumbled across a "Special Report" by Departures magazine, which is an American Express publication.

It was written by Aimee Lee Ball for this year's March/April quarterly issue, so it is pretty up-to-date. What makes this notable is how the article characterizes the community and Mayo Clinic.

It actually starts with a Mayo Clinic doctor talking about how many people try to smuggle monkeys onto an airplane. "Monkeys on a Plane" would probably be a better movie than "Snakes on A Plane." Heh.

Anyway, here are a few excerpts:

There’s no Ritz-Carlton in Rochester, Minnesota—no Four Seasons or Mandarin Oriental or Peninsula, either—and the city’s idea of an Italian restaurant is the Olive Garden. This is the dirty little secret behind any visit to the Mayo Clinic: You’ll get world-class medical care, but it’s the badlands for eating or sleeping.

When asked about where to eat, one Mayo physician advised, “My house,” and shared the name of a well-stocked market three miles away.

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800px-Gonda_building,_closer_upMayo has been an iconic (and ironic) name in health care for more than a century—a place surrounded by cornfields but considered the gold standard or the last-chance saloon by royalty (both actual and media-ordained).

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Everyone at Mayo seems to have drunk the Kool-Aid, including the electrician who frets about the most convenient placing of outlets and the cleaning woman who declares that she saves lives (if she’s keeping the room free from infection, she’s right). “We’re not known as the heart place or the cancer place or the knee place,” says Dacy. “We do all those things, but we’re known for comprehensive care, and people work together in this collegial way. The customer service philosophy is powerful. We have a dress and decorum committee—you won’t see unshaven doctors in scruffy scrubs like on the TV shows, and the reason is to respect patients.” Monkey bites and all.

May 10, 2013

Collaboration rolling toward Rochester streets

While it isn't street-ready yet, several of Rochester's public transportation businesses are trying to put together an alliance to pool their resources and ultimately improve the experience getting from Point A to Point B in the Med City.

Details are still being hammered out and nothing is finalized yet, but it sounds like it will probably happen.

Roch streetsI chatted with someone involved with deal. He wasn't comfortable being identified yet, but he did offer a few insights of what might be coming down the road.

The businesses involved would retain their individual identities. However, they will join forces to handle needs they have in common, fleet maintenance in particular.

"The alliance wants to ensure a seamless experience for customers by providing a prompt, efficient and more consistent transportation service across all product lines," he said. "A world-class medical center deserves a world-class transportation system and we intend to deliver."

That sounds like a lofty goal that fits well with Mayo Clinic's Destination Medical Center initiative.

One interesting element is that it involves many types of transportation as well as bringing direct competitors together under the alliance's umbrella.

While these local businesses might not make it all the way to their targeted destinations, the journey itself sounds like one that could improve what happens on Rochester's streets.

I'll keep tracking this one. Stay tuned.