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87 posts categorized "Economic development"

September 14, 2016

Mayo Clinic actually bought all 3 of 'IBM White Buildings'

I got it wrong yesterday. I wrote that Mayo Clinic bought the 4111 Building in Rochester's 41st Professional Campus for $10 million. It turns out that Mayo bought all three buildings - 3033, 3055 and 4111 - for $10 million on Sept. 1.

I apologize for the error.

I looked at a state document, which only listed the 4111 building in the sale. Olmsted County had not published the sale yet on its website and Mayo Clinic could not respond to my questions on Monday. I probably should have waited to confirm the details on Tuesday, but I thought I had enough to get the basics of the sale out there and then follow up once Mayo Clinic filled in the blanks.

Here's some from column on this in today's paper:

In turns out that Mayo Clinic bought all three buildings in Rochester's 41st Street Professional Campus, known locally as the IBM White Buildings, earlier this month.

NorthwestclinicI reported in Tuesday's column that Mayo Clinic purchased the 4111 West Frontage Road building, which houses its Mayo Family Clinic Northwest.

The $10 million Mayo Clinic paid to New York Life Insurance Co. on Sept. 1 actually paid for all three sprawling, connected buildings. In total, the complex is 435,000 square feet in size. 

Olmsted County estimated the market value of the three connected buildings at $13.8 million for 2016, so it looks like Mayo got a pretty good deal.

"With existing leases set to expire at this site at year end 2017, Mayo Clinic was presented with the opportunity to purchase the three-building campus. This purchase will secure our existing occupied space long-term and allow us to avoid any patient-care disruption associated with any relocation and provide an opportunity to address growth and consolidation needs for various departments," said Mayo Clinic spokeswoman Kelley Luckstein about the purchase on Tuesday.

The purchase opens open more space for the ever-growing Mayo Clinic, since the 3055 building is empty.

"The investment will allow for consolidation of certain administrative, clinical, educational and research functions that do not need to be in the proximity of downtown. This will then open up space downtown to expand various functions that are critical to the downtown area,” added Luckstein, via email.

There are five non-Mayo tenants leasing space in the 3033 building. Luckstein says the change in ownership "will not have an impact on their current occupancies."



September 09, 2016

Foreign patient numbers trending down at Mayo Clinic

I'm wading through a 216 page statement Mayo-clinic-logo for issuance of $220  million bonds by the City of Rochester for Mayo Clinic.

While that might not sound very exciting, there are a lot of interesting details. This document is looked at bond buyers who are judging Mayo Clinic's stability.

Here's one thing that jumped out at me:

Foreign patients, not including Canadians, accounted for 1 percent of the patient population in Rochester in 2013.

That dropped to .03 percent in 2014 and 2015.

I don't know how many patients that accounts for or why the numbers are down. Plus I don't know if t
hat trend is continuing in 2016. I have submitted those questions to Mayo Clinic.

I realize this is a random fact, but it interests me. And there there a lot more little tidbits like this in the bond statement.


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 17, 2016

Miracle Mile project to be unveiled soon?

579781715a9e4.imageWhile there has been no official word about the proposed grocery/apartment complex project at Rochester's Miracle Mile Shopping Center, it looks like it is on the agenda of Thursday's meeting of the Committee on Urban Design and Environment.

CUDE is slated to hear about the "Miracle Market Mixed-Use Project," according to the agenda. No other details are listed. This project is expected to involve the mysterious, unnamed owner of the Miracle Mile shopping center and Nate Stencil of Stencil Homes, who has a number of apartment complex projects in Rochester.

No word yet on what grocery chain will occupy this possible building.

June 29, 2016

Mayo Clinic tech doesn't fare well in Celyad/Cardio3 study

Sometimes lost opportunities are actually positive things. 
The City of Rochester really wanted rock star Belgium biotech Celyad/ Cardio3 to build a manufacturing facility here to handle the Mayo Clinic-created C-Cure stem cell cardiac treatment.
CelyadThat fell apart, when Celyad/Cardio3 pulled out of its plan to take over the fifth floor of the Minnesota Buiobusiness Center.
However, this week that looks like a good thing. Rochester make have ducked being stuck with a half built facility after the results of the latest study of C-Cure.
A Chart 1 Phase 3 study found that no difference between patients treated with the C-Cure and those given a placebo.
Here's how an article on the Seeking Alpha investment news site described the situation:

The failure of a pivotal trial of its heart failure cell therapy C-Cure, erased 38% from the Belgian company’s valuation this afternoon, an outcome that will make its search for a partner considerably harder.

Indeed, without a partner the project is effectively dead, as Celyad confirmed today that it would not conduct further clinical work alone.


The Chart-1 phase III study failed to show this: it recruited 271 patients with chronic advanced symptomatic heart failure, and compared C-Cure against sham treatment. The primary endpoint was a composite of mortality, morbidity, quality of life, six-minute-walk test and left ventricular structure and function at 39 weeks, and on this measure C-Cure patients failed to show any difference versus placebo.

That must be pretty disappointing after nine years of promising results.
 Celyad/Cardio3 licensed stem-cell research by Mayo Clinic's Dr. Andre Terzic and Dr. Atta Behfar in 2007. 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.
However, Celayd bought an NKR-T cell platform from Celdara Medical in 2015. It appeared that the company very quickly turned away from C-Cure to focus on the new area. That is looking like the saving grace for Celyad today.

 All of which would have been disastrous if not for the presence of its fledgling immuno-oncology pipeline, which no doubt prevented an even bigger share price collapse.


Further data updates are expected in the coming months, and indeed this afternoon Celyad’s chief executive, Christian Homsy, ended a conference call discussing the C-Cure results by flagging approaching good news in oncology. Given the relatively small amount paid to access this technology and the huge hopes for the adoptive T-cell space, investors could indeed soon forget the C-Cure failure.

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.