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1288 posts categorized "Speculation"

April 15, 2014

Doubletree's Rochester Club to stop serving lunch

RochclubletterTitan Development's Doubletree by Hilton hotel sent out a letter to the members of its exclusive Rochester Club to notify them that the club will soon stop serving lunch.

These club members have access to the Doubletree's Executive Lounge, which it accessible only from the two executive level floors. It serves a hot breakfast buffet, a light hot dinner and cocktails with the Doubletree cookies and milk later in the evening.

Rochester clubNot sure how many people are members of the Rochester Club, but I believe a lot of local business leaders use this service.

The letter, which was forwarded to me from multiple members, mentions how much Titan has on its plate right now with its two downtown developments. It didn't explain how those projects connect to the Rochester Club and exactly why the lunch is going away.

I have a call in to the hotel to try to get more details.

April 10, 2014

Associated Bank working on new spots for Rochester branches

Associated Bank is planning to close its branch in the Hy-Vee North grocery  and then re-open it in a future northwest Rochester location.

Associateddrawing1The Green Bay, Wis. bank announced this week that it will close the grocery store branch at 500 37th St. N.W. at the end of July. Hy-Vee customers will then be served by Associated Bank's Rochester locations on South Broadway, First Avenue Southwest and 16th Street Southwest.

The five branch employees based at the Hy-Vee branch will work at Associated's three other Rochester branches until a new northwest facility "in the West Circle Drive corridor" is completed.

While bank officials wouldn't confirm the location of the to-be-constructed bank yet, Associated has submitted very early plans to the city to build a 3,683-square-foot branch in the 19th Street/West Circle Drive commercial development anchored by Costco.

Re-locating the northwest branch is not the only Rochester move coming up for the bank.

New owners have acquired Associated Bank's downtown building at 206 South Broadway and the bank needs to move out by spring 2015. There was speculation when the site development permit was filed for the West Circle Drive branch that it might serve as the new home for the downtown branch.

Not so, says the bank's spokesman. It's actively looking for a new location that will allow it to maintain its presence downtown.

“We are finalizing plans for an exciting new Associated Bank location in the West Circle Drive Corridor and continue to review opportunities for a new downtown bank location," stated Executive Vice President David Stein in this week's announcement.

Stein also commented that, "The greater Rochester area represents an important market for Associated Bank, and we are committed to serving our customers there with expanded operations and services."

Associated Bank entered the Rochester area in 2004, when it acquired First Federal Capital Bank. First Federal was short-lived here. It picked up the holdings of the long-time Marquette Bank in 2002.

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.

April 08, 2014

Mayo Clinic's Nobel Prize work at heart of $5.6B drug deal

So Questcor Pharmaceuticals announced Monday that Ireland-based Mallinckrodt Pharmaceuticals is buying it for a whopping $5.6 BILLION.

A little research into Questcor shows that it has followed an interesting path starting with its $100,000 purchase of rights to H.P. Acthar Gel from Aventis in 2001. The FDA then approved labeling Acthar as "an orphan drug," which opened up the company's options for pricing Acthar.

The New York Times says the price per vial climbed from $40 to an incredible $28,000 within 10 years.

CortisoneA95D4FE2FBE5At the core of Questcor's story is one of Mayo Clinic's most famous research successes.

In 1948, Dr. Philip S. Hench and Dr. Edward C. Kendall were studying the effects of a hormone on inflammination related to rheumatoid arthritis. They had success with cortisone, but it was difficult to synthesize.

Hench then injected adrenocorticotropic hormone, or ACTH to cause the patient's body to produce their own cortisone and other steroid hormones. The ACTH came from pigs from Armour meatpacking.

In 1950, Hench and Kendall won the Nobel Pirze in medicine for their research. Unfortunately, they didn't patent it. The FDA approved H.P. Acthar Gel to treat a variety of diseases and conditions. It was then owned by the meatpacker Armour.

In recent years, Questcor has been criticized for its dramatic price hikes and for vauge allusions to "a secret sauce" in their drug that improves its effectiveness.

Some question if it is effective at all.

Mayo Clinic's Dr. Eric Matteson, the chairman of rheumatology, has been quoted about the use of Achtar in rheumatolgy.

• “Limited to no attractiveness in rheumatology”

• “Enthusiasm is low”

• "Very little if any role for an ACTH product in rheumotatic diseases, I don't see it."

April 03, 2014

Does Mayo Clinic have plans for Shoppes on Maine?

Mayo Clinic seems to be looking to south Rochester for a future project, even though there's no official word yet.

Tom Hexum, of Maine Street Development Co. of Rochester, filed a Land Development Application on March 11 for a 22,000-square-foot "commercial building with parking" at the corner of Canal Place Southeast and Maine Avenue Southeast. That puts the building near Fat Willy's Bar and Grill and across Maine Avenue from the commercial center anchored by Lowe's.

Mayo buildingThe proposed building would be situated on two acres and have 109 parking spaces. Plans call for a half circle drive in front for loading and unloading at the building's entrance, which would be covered with an 880-square-foot canopy.

Hexum and Maine Street have been the local driving force behind development in the Shoppes on Maine area from its start. Most of their previous projects had future tenants identified before any construction began. But this new development application doesn't name any tenant.

However, Mayo Clinic enters the picture when the application was studied by city staff. The Department of Planning and Zoning and the Department of Public Works describe the building as the "proposed Mayo Clinic facility" in letters on May 14 and May 24. Those letters denied the application until a variety of site-related issues are addressed.

Despite being named by city officials, Mayo Clinic would neither confirm nor deny any specific plans in the Shoppes on Maine area.

"We are exploring options to improve our ability to improve access to community care for our employees and those who depend on us for these services," said Rebecca Eisenman, of Mayo Clinic's Communications Dept. "Future options may include expansion of facilities and services in southeast Minnesota, but no specific details are available at this time."

While the first application for this building was denied, it seems likely that Rochester design firm Yaggy Colby will be able to address the issues and get the development approved.

We'll just need to watch how it plays out and listen to what Mayo Clinic has to say about it.

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.

-------------------------------

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."

Med City tech quiz - Do you remember… ?

Looking through some old pics the other day, I came across some pieces of Rochester's techno past.

These were all once hot topics in the Rochester area. Some were even snapped up by early adapters. And then things changed.

While some of these still exist on the market in some form, a couple never made it beyond prototypes or early generations.

A couple of these are easy, but I wonder if anyone out there can correctly identify all of them.

Post your answers in the comments section to claim the fame of being Rochester's top tech historian.

DSCN0694 1.

 

 

 

 

 

IMG_1047

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DSCN0097

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IMG_2005

4.

March 10, 2014

Downtown building down to make way for new complex

03102014cobrowndemoIt looks like the days of the former C.O Brown downtown building at 300 S. Broadway have finally come to an end.

The long-time Rochester insurance firm moved out of downtown in 2008 as developer Joe Weis began construction of the adjacent City Centre complex.

02282014cobrowndemoNow developer Andy Chafoulias is working on a plan to build a six-story building called The Plaza on Historic 3rd on that site. Of course, that means the bell is tolling for the long-empty shell of the ex-insurance office.

Here's a little reverse retrospective on that site. The photos go back in time, though the final image is the rendering of what The Plaza is slated to look like.

6a00d83451cc8269e201a73d746c7c970d-800wi-2 Titan Development and Investments, led by father-and-son developers Gus and Andy Chafoulias, have been working on plans for the project for quite a while.

Those plans have been evolving during the past few months, particularly after news broke that the nearby seven-story Associated Bank Building will be 070208citycentrejk_2demolished and re-developed. That move means many downtown commercial tenants are being displaced.


“Once we made our initial announcement last year, the interest in the project continued to grow well beyond our expectations,” Titan CEO Andy Chafoulias said. "That interest materialized into an opportunity to create a project that we feel will be a prominent piece of downtown Rochester and Historic Third Street for many years to come.”
Co_brown
Two tenants moving out of the Associated Bank Building — Dunlap & Seeger and MedCity Dental — already have signed up for space in The Plaza. Titan Development plans to move its offices there from the Minnesota BioBusiness Center on First Avenue Southwest. Those are the only confirmed tenants so far.

"We do expect by end of month to have it 100 percent leased," said John Beltz, Titan's vice president of brand management and revenue development.

Citycenter-H3-Plaza-on-Historic-3rd-rendering-1-600x330While it has seen significant changes, the latest version of the Titan project still includes the restaurant on the street level and the roof-top lounge/bar that were in the original vision. Restaurateurs Pat Woodring and Scott Foster, the minds behind Chester's Kitchen & Bar and Pescara, are still slated to create, own and manage those operations. Woodring and Foster have worked with the Chafoulias family for many years.

In September, the Rochester Economic Development Agency approved a special redevelopment tax-increment-financing district to raise $300,000 to cover asbestos removal and demolition of the former C.O. Brown building.

The project was earmarked by the Rochester City Council in September to be included in the $2 billion in private investment promised to the state as part of Mayo Clinic's Destination Medical Center initiative.

March 05, 2014

Sam's Club planning 2nd Rochester store

After years of unofficial buzz, retail giant Walmart confirmed this week that it wants to open a second Sam's Club store in Rochester.

No details, such as where it could be located or when it might be built, are yet available from the Bentonville, Ark.-based company. Rochester currently has a pair of Walmart Supercenter stores on the north and south sides of the city as well as a Sam's Club warehouse store by the north location.
6a00d83451cc8269e201774450e4eb970d-800wi-2
There has long been talk that a south Sam's Club complex could be built in the Shoppes on Maine area, possibly near the 48th Street exit.

“We are always looking for opportunities to better serve our Rochester customers and are making plans to add a second Sam’s Club to serve the growing need among area customers who want to buy wholesale merchandise in bulk at affordable prices,” stated Delia Garcia, Walmart's director of communications by email this week.

Walmart opened its 136,000-square-foot north Sam's Club at 3410 55th St. N.W. in 1993 along with its north Walmart store. The south Walmart store opened in 2000, along South U.S. 63.

Sam's Club was Rochester's sole warehouse member store until Costco opened its own 150,000-square-foot discount club store plus gas station here in 2012. Rochester's Sam's Club underwent a $3.5 million remodel just months after Costco's opening.

While Walmart is the undisputed champion in the discount retail niche, Costco is the leader in the  $390 billion warehouse club industry. Costco generated $102 billion in sales last year, while Sam's Club tallied $57 billion in revenue.

The recent excitement spurred by Mayo Clinic's Destination Medical Center initiative has drawn more developers and chains here.

While the city has grown, one retail expert doesn't believe that it's large enough yet to justify Sam's Club adding a second store.

"It makes no sense at all," commented David P. Brennan, a professor of marketing at St. Thomas University in St. Paul and co-director of the university's Institute for Retailing Excellence. "In regard to Rochester because of its size and relative ease of getting around, you don't need two stores to cover a market that size.It just doesn't make sense."

Sam's Club has nine stores in the Twin Cities area and each does about $65 million to $75 million in business a year, according to Brennan. Costco has six stores in the metro region. Each of its stores move an estimated $120 million to $130 million in merchandise a year.

Walmart's plan is to open between 17 to 22 new clubs this fiscal year. It's also planning to ramp up its presence in China. However, it also plans to cut about 2,300 jobs at Sam's stores.

While he believes Rochester is "more of a Costco market than a Sam's market," Brennan concedes that the larger southeastern Minnesota area might be a different story.

"In terms of regional draw, Sam's may be a better fit for that," he said.

February 10, 2014

City Centre plans take shape

Titan Development and Investments officials, led by father-and-son developers Gus and Andy Chafoulias, have finalized plans for a six-story commercial complex with a roof-top lounge on top to be built in downtown Rochester.

CitycentresiteWhen buzz about the project began in May, it was described by Andy Chafoulias as a four-story building. However, Mayo Clinic's Destination Medical Center initiative plus news that the tenants in the nearby seven-story Associated Bank Building are being displaced spurred the developers to change their plans.

The project, now called City Centre One, was earmarked by the Rochester City Council in September to be included in the $2 billion in private investment promised to the state as part of DMC.

A special redevelopment tax-increment-financing district was approved by the city to raise $300,000 to cover the asbestos removal and demolition of the former C.O. Brown building at 300 S. Broadway. Once the prep work is complete, the site will be ready for demolition crews to clear away the old building to make way for the City Centre One.

Titan submitted a development plan to the city last week, which is the first detailed description of the complex since it was first announced.

Plans by Rochester's CRW Architecture + Design Group show a 34,371-square-foot, seven-story complex.

The street level of the building is expected to feature an Italian restaurant, created and run by restaurateurs Pat Woodring and Scott Foster. Woodring and Foster are the minds behind Chester's Kitchen & Bar and Pescara. That floor will be the largest at 5,144 square feet in size.

The second through sixth floors are all expected to house commercial office tenants similar those that now lease space in the Associated Bank Building. Each of those floors are slated to be 5,121 square feet in size.

Topping the structure is a 3,622-square-foot rooftop lounge, which also will be a creation  of Woodring and Foster.