News Business Sports Entertainment Life Obituaries Opinion
Jobs Homes Cars Classifieds Shopping

Search PB Blogs

Loading

Categories

81 posts categorized "Economic development"

June 14, 2016

Software giant buys Rochester's DoApp

Wade-beaversDoApp Inc., an 8-year-old Rochester media technology firm, was acquired this week by the top software firm in the newspaper industry.

Newscycle Solutions bought DoApp to become part of a new mobile division to add to its services for newspapers and expand into television and radio. Bloomington, Minn.-based Newscycle, which is owned by Vista Equity Partners, works with 92 of the top 100 U.S. newspapers as well as 1,200 companies in 45 countries.

DoApp-logo-square_400x400Financial terms of the deal were not disclosed.

DoApp co-founder Wade Beavers says Newscycle has worked with DoApp on various projects and the relationship just deepened until this became the logical step. Beavers, now president of Newscycle's mobile division, says this acquisition is good for his company and for Rochester. All 13 employees now have jobs with Newscycle and the division will remain in Rochester in the former DoApp office at 1652 Greenview Drive SW.

"You'll definitely see more employees in Rochester. Newscycle is very strategic on growth," said Beavers. "They plan to stay here."

Beavers co-founded DoApp with Joe Sriver with help from Dave Borrillo in 2008. In the early days, Beavers and Borrillo created early iPhone apps while drinking coffee in Rochester's south Panera eatery. Three DoApp apps were among the first 500 sold on Apple's then-new App Store.

The Newscycle sale marks the third major "exit" for DoApp, since it launched.

In 2012, Raleigh, N.C.-based Axial Exchange acquired mRemedy, which DoApp created with Mayo Clinic. It focused on making patient-focused mobile health-care apps.

DoApp also sold its popular mobile real estate platform to CoreLogic, of Irvine, Calif. in 2014. Borrillo, previously DoApp’s chief operating officer, joined CoreLogic along with all of the DoApp employees working on the real estate app. CoreLogic kept the office in Rochester and it has added several jobs since the acquisition.

“DoApp has led the way for media companies to be the best in their markets with an awesome mobile experience that hasn’t been matched,” said Beavers in Monday's announcement. “Becoming part of the Newscycle family will allow us to create a more complete experience that will take publishers forward and connect them to their audiences across all devices.”

 

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 10, 2016

More Dunkin' Donuts coming southern Minnesota

Two years after making a flashy return to Minnesota with a Rochester shop, Dunkin' Donuts has signed a franchise agreement to bring three more locations to the region.

The Massachusetts doughnut maker announced Thursday that it has signed a deal with new franchisees Oliver Schugel and David Schooff to open three new restaurants in Mankato. The first one is slated to open in 2017.

06232014dunkindonutsMankato is leaping ahead of Rochester, which was expected to have about five locations by now. 

Rochester Retail Services, a division of the Kahler Hospitality Group, opened a shop here in June 2014 at 15 First Ave. SW in its Kahler Grand Hotel complex in the heart of downtown. It was the first one in Minnesota since 2005. Dunkin' said then that Rochester Retail Services would be opening five more shops in the next few years.

That changed last fall, according to Dunkin' Donuts Senior Director of Franchising Patrick Cunningham.

"Rochester Retail Services, the franchisee of record, will continue to own and operate the existing restaurant in the Kahler. However, they will not develop more Dunkin' stores as we previously reported," he said in October.

When announcing the coming Mankato shops, Dunkin' said franchise opportunities remain available in Rochester. Plus, "to help fuel additional growth in the market, special development incentives are available."

In Mankato, the new franchisees have more than 45 years of combined experience in business and real estate development.

“We have a passion and loyalty for the Dunkin' Donuts brand and look forward to opening our restaurants in the years to come," stated Schooff. 

June 06, 2016

Developer to pay for extension on Golden Hills School deal

A Twin Cities-developer interested in buying an old Rochester school building says it needs more time to put a plan together.
 
GoldenhillschoolRyan Cos. signed an agreement last fall to buy the former Golden Hill School building for $1.8 million from Rochester Public Schools. The empty 36,000-square-foot building is located at 2220 Third Ave. SE.
 
Mark Schoening, Ryan's senior vice president of national retail development, described the tentative plans in September as "…Bringing additional retail to that part of Rochester."
 
However, Ryan Cos. did not complete its due diligence on the property by a May 31 deadline. That's why the Rochester School Board is slated to vote on a request from Ryan at tonight's meeting to extend that period to Sept. 30. Ryan is willing to forfeit $25,000 in "earnest money" to pay for the extension.
 
Assuming the school board approves the extension, Ryan pledges that if needs more time before Sept. 30, it will forfeit another $25,000 to extend the deadline to Dec. 31.
 
 
 

June 03, 2016

Forager spreading out into market space

After less than a year in operation, Rochester's popular Forager Brewing Co. gastropub is outgrowing its space.

The hipster-friendly beer, coffee and food place plans to take over space within its 1005 Sixth St. NW building that now houses the Kutzky Market retail area.

"We just need more room, so we're going to re-organize," said co-owner Annie Henderson.

Kutzky-market-logoThe plan is to close the 1,200-square-foot market area at the end of June and start moving beer-aging barrels into the space in July. Beside beer storage, the space will be used as a customer waiting area as well as a public art space with a small retail piece.

The market, which features many local handmade items and antiques, has eight vendor booths. 

"A lot of them already have new homes. Some are moving into the Dwell Local (store)," she said.

The shift also opens up room for Forager to host a local art galley and music performances.

"There will be a lot of new programing over there. After C4 (nonprofit Rochester art collective) closed, it has been tough for local artists to find free space for events," said Henderson. She previously served on the C4 board with her Forager co-owner, Sean Allen.

May 25, 2016

Hold the applause - New Buckeye name is not set yet

I was a bit premature Tuesday when I wrote that South Dakota developer Stencil Homes had re-named its Buckeye Apartments project in downtown Rochester.

F89c28e7467b81cdb720c0c067eca5d3_f252I spotted the project on Stencil's website labeled as Ovation on Monday. I wasn't able to reach CEO Nate Stencil for confirmation, so I reported that it appeared that the new name for the project will be Ovation.

On Tuesday, Stencil sent me a note that said I was partially right.

"On 'The Buckeye' name change, we are still not 100 percent set on the new name but I can tell you we will be changing it. We are currently polling different names and will soon have one nailed down," he wrote.

The name of a 92-unit apartment complex being built on the corner of Fourth Street and Third Avenue Southeast in downtown Rochester has been a sensitive issue for some of the neighbors. Stencil originally tagged it as Buckeye as a nod to the Buckeye Liquor store landmark that was demolished to make way for the project. Some in the neighborhood didn't think that was an appropriate name.

 

May 24, 2016

Bye Buckeye, hello Ovation?

The name of a 92-unit apartment complex being built on the corner of Fourth Street and Third Avenue Southeast in downtown Rochester has been a sensitive issue for some of the neighbors. 
F89c28e7467b81cdb720c0c067eca5d3_f252
South Dakota developer Stencil Homes labeled it Buckeye Apartments as a nod to the Buckeye Liquor store that was demolished to make way for the project. Some in the neighborhood didn't think that was an appropriate name. Now it looks like the developer has decided to try something different.

Stencil Homes' website shows a 92-unit apartment building as a Rochester project, but it's not called Buckeye anymore. The new name under the old rendering of the complex is Ovation.

This must have been a recent change. The Answer Man wrote about this on April 27 and Buckeye still was the moniker at that point. CEO Nate Stencil was not available Monday to answer questions about the Ovation name, but it looks like concerned neighbors should give themselves a round applause for the spurring a name change.

 

May 20, 2016

Mayo Clinic Ventures looks to Israel for collaborations

Looking to help boost a variety of medical start-up businesses, Mayo Clinic Ventures is targeting collaborations and investments in Israel with a new program.

The goal of the Mayo Clinic Israeli Startup Initiative is to work with companies either through sponsored research grants or co-development.  

Flags"Co-development can include licensing of Mayo Clinic know-how or an investment," explained Timmeko Love, of Mayo Clinic Ventures. "It's about matching the right opportunities with Mayo Clinic know-how for collaboration. It's all about finding the right strategic fit."

Candidates for the Israeli Startup Initiative can include very early stage companies to ones that are much further along in development. They can work in any area of health care. 

"We're not limiting our options," Love said.

The project announced this week actually is a new phase of an existing Mayo Clinic initiative.

It has been active in Israel for about a year, partnering with the philanthropic Merage Institute. The California-based Merage Institute awards up to $150,000 in annual research grants for Israeli companies working with Mayo Clinic. The most recent recipient was EyeYon Medical, which makes a noninvasive medical device to treat corneal edema.

Mayo Clinic Ventures recently took on the Israel initiative and that has put co-development on the table. That new approach is being launched next week in Tel Aviv at IATI-Biomed, Israel’s largest life sciences and technology conference. Mayo teams will meet start-ups to study their technology, and then consider making investments or collaborations.

This is first time Mayo Clinic Ventures has focused on one whole country for business opportunities, despite its long history of international projects. Many might not be aware of it, but Israel is a logical candidate for a such a relationship.

"It's a natural next step for us," Love said.

Israel is considered to be the worldwide leader in innovation in medical devices, biopharma, software and other types of health-care businesses. The U.S imported $600 million of Israeli medical devices in 2011. In 2015, Israel housed 725 medical-devices businesses with an overall total of 1,380 life-sciences companies.

While California's Silicon Valley is known as the hottest spot in the world for business start-ups, Israel is recognized as a close second. A 2009 book, "Start-up Nation," documents how Israel, with a population of 7.1 million, generates more tech businesses than many much larger countries.

"It's kind of a national sport in Israel," said Guy David, a professor of health-care management at University of Pennsylvania’s Wharton School. He was born and raised in Israel and tracks its medical businesses closely.

David said Israel's required military service coupled with an environment that encourages questioning and taking risks is a big factor.

"Israel is hugely innovative. The innovative spirit starts at a very young age," he said.

While launching technology companies is a big focus in the country, the entrepreneurs all know the market for their products or services is elsewhere.

"There is no market in Israel. Israel is tiny," said David. "If they invent something, they know it has to be a global product."

Does that mean businesses partnering with Mayo Clinic could open offices or build facilities in Rochester?

"That certainly could be a possibility. We do look at an economic development when considering companies," said Love. "But it has to make sense for that company. There would need to be a business reason for it."

 

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.

May 10, 2016

$100 million development proposed near Saint Marys

A more than $100 million housing and commercial development is proposed for a high-profile corner of Second Street Southwest, next to Mayo Clinic's Saint Marys campus.

Development1The plans call for a 13-story building with two levels of underground parking to be built on more than two acres at the southwest corner of 14th Avenue Southwest and Second Street.

The Brentwood on 2nd and the Ray-Mar Motel stand on that corner. The hotels, along with some nearby houses, will be demolished to clear the way for the project. The Brentwood also houses several businesses, including City Market, Charlie’s Eatery & Pub, A Shared Smile and the Healing Touch Spa.

05-09 4Brentwood enWhile some details could change as it goes through the permitting process, the proposal includes 359 housing units with 310 "luxury" apartments in the tower and 49 connected townhomes.

The plan also includes almost 900 parking spaces, some of which will be public. The townhomes will act as a buffer between the parking and the Folwell neighborhood. The developers hope eventually to connect the project to Saint Marys Hospital via subway.

The tower on the corner is expected to include about 20,000 square feet of commercial space, including 13,000 square feet on the street level that will encourage sidewalk traffic with a restaurant and retail.

Development3"This project is completely different from than anything that has ever been built in Rochester," said longtime local developer Ed Pompeian. "This beautiful building will be first thing you see coming into Rochester from the highway, heading into the medical corridor."

Pompeian, along with his son, Nick, is partnering with a Twin Cities real estate development firm,  Alatus LLC, to create this project. The Pompeians lead a local investment group, 1406 Second Street Associates, which controls the hotels and all of the property where the project will be built.

Mayo Clinic is not directly involved with the project at this point.

'An amazing beacon for the area'

Alatus is well-known for handling massive developments, such as Mayo Clinic Square, Latitude 45 Apartments and The Carlyle condos in Minneapolis. It is led by founder Bob Lux.

"I think it's going to serve as an amazing beacon for the area," said Chris Osmundson, the Alatus senior development associate working on the project. "In real estate, it's always location, location, location, and this one's got it."

The Pompeians and Alatus have been working on this plan for about two years. They now are bringing it to the city for pre-development meetings, followed by the approval process. If everything goes well, they could start clearing the site for construction sometime this summer or early fall.

Estimating a 16- to 18-month construction period, Osmundson said it's possible the project could be finished by spring 2018.

This is the first major project pitched for that area since the implosion of a proposed Holiday Inn hotel complex late last year. That project struggled though the planning process and was criticized by some neighborhood groups.

However, these developers are optimistic, after getting positive feedback from the Folwell, Kutzky and Historic Southwest neighborhood associations.

"It was very refreshing for everybody. Support was literally unanimous from the neighborhoods. Great things can happen, if you take the proper steps," said Nick Pompeian.

Talks started more than a year ago

Don Nordine, president of the Folwell Neighborhood Association, said the developers started talking to his group about a year and a half ago.

"We like the project, even though it is really big," he said. Folwell includes 200 houses, while the project will have 359 apartments and townhomes.

While the group supports the project, that doesn't mean they still don't have some concerns, said Nordine. The public parking aspect of the development has residents worried about traffic.

"The city and the developer have to get this right. We want this to keep this neighborhood residential and quiet. I think they are open and honest, but the devil is in the details," Nordine said.

Jesse Welsh, president of the Kutzky Park Neighborhood Association, is also positive about her interaction with Alatus and the Pompeians so far. While they have not been able to schedule an official presentation with her association yet, Welsh sat in on a Folwell meeting and spoke with Lux. She plans to brief her association on the project at a neighborhood meeting tonight. Members of the independent Imagine Kutzky advocacy group also sat in on meetings and were supportive of what they heard, she said.

Traffic is also a concern for the Kutzky neighborhood, but overall, Welsh was pleased with Lux's approach.

"What impressed me the most was how well they've worked with Folwell. They understand how critical it is to work with the neighborhood," she said.