Published in Panorama 2016
His Holiness Tenzin Gyatso, the 14th Dalai Lama, frequently travels to the United States, where he gives speeches, teaches Tibetan Buddhism, and meets with world leaders in cities like New York and Washington. But the 80 year old religious figure visits only one place in America every year: Rochester, Minnesota, a small city of just over 100,000 people on the south fork of the Zumbro River. He’s not alone in making this pilgrimage. To understand why the Dalai Lama and countless other luminaries, from King Abdullah of Saudi Arabia to tennis player Mardy Fish, have made pilgrimages to Rochester is to understand both the history of this city, and—if all goes according to plan—its bright future.
Rochester was founded in 1854 by a native of the western New York city of the same name, and started off as a waypoint on the Dubuque to Saint Paul stagecoach line. Fertile farmland brought the first settlers to the town, and the territorial legislature soon established Rochester as the seat of the newly drawn Olmstead County in the Minnesota territory. Less than a decade after its founding, a young doctor named William Worrall Mayo arrived to work as a medical examiner for men drafted for service in the Civil War. Dr. Mayo put down roots in the town after the war and set up practice, and after some time, his sons passed through medical school and eventually joined him. In 1883, a tornado roared through the city and Mayo family were indispensable in the recovery effort. Because of the scale of the disaster, they enlisted the services of the Sisters of Saint Francis to tend to the masses of injured. It was an auspicious event. After the tragedy, the Sisters approached Dr. Mayo and proposed that they join forces to build a modern hospital for the city. In time, that hospital would become known as the Mayo Clinic, and thanks to forward-thinking leadership, its reputation for excellent care eventually translated into worldwide fame. (City of Rochester, 2015) In 2015, US News and World Report ranked the Mayo Clinic as the second best hospital in the United States, which was a down year for Mayo, having held the top spot the year before. (Comarow, 2015)
Rochester would be a shadow of its current self without the Mayo Clinic. Between the hospital, research facility, and medical school, the organization employs over 35,000 people, (City-Data, 2015) over a third of the jobs in the entire Rochester MSA, (CBP, 2013) and draws over 2 million visitors to the city annually. (City-Data, 2015) The Mayo Clinic is Minnesota’s largest employer, eclipsing even the state government.(MnDEED, 2015) Its downtown campus occupies around 15 million square feet, over three times the size of the famed Mall of America. (Nicas, 2013) As seven of the ten tallest buildings in the city belong to the Mayo Clinic, (Wikipedia, 2015) it seems fair to say that its downtown campus is downtown Rochester. The degree to which the Mayo Clinic holds sway over the center of the city is deeply reminiscent of turn-of-the-century towns like Pullman, Illinois, which were built to serve the needs of a single corporation.
Increasingly in the twenty-first century, the global economy began to fray the connection between the city and its foremost resident. The Mayo Clinic increasingly found itself in competition with premier hospitals across the nation to attract wealthy patients and employ top doctors. In the long term, Mayo Clinic executives felt that it was a battle they would not win. Rivals like Massachusetts General, Johns Hopkins, and the Cleveland Clinic were based in more easily accessible cities, with higher quality hotels and attractions for the family members of patients. By the same token, these rival hospitals could offer their staff the benefits of living in larger and more interesting places. If the level of care were equal, which Arabian prince or brilliant neurosurgeon would choose sleepy Rochester over cosmopolitan Boston?
To make matters more difficult for the Mayo Clinic, their rivals were not standing still, spending billions of dollars on expanding and growing their facilities. A 2013 Wall Street Journal article summed up the challenge. The Cleveland Clinic was adding a $712 million expansion paired with a bus rapid transit project named the “HealthLine” and other city investments in the healthcare corridor. Johns Hopkins was constructing a new $1.1 billion facility. Mass General was undergoing a $1.5 billion renovation. (Nicas, 2013) In comparison, Rochester was practically moving in slow motion. The WSJ article quotes Mayo CEO John Noseworthy as saying he “gets the daylights beat out of him by the trustees because there are no four- or five-star hotels.” (Nicas, 2013) The aggressive moves of Mayo’s competitors represented an existential threat to the clinic’s position at the top of the health care industry—and by extension, to the city of Rochester. But if Rochester’s remote location and podunk reputation were the problem in the first place, how could the Mayo Clinic hope to save itself and its hometown?
In 2010, amidst these pressures (not to mention the global recession), the Mayo Clinic began a study process to determine its future business strategy. With outposts established in Scottsdale, AZ and Jacksonville, FL, the clinic had the option of further expansion. But the facilities that it had built at home could not be so easily replaced or relocated. The company knew its reputation and capital were, for better or worse, tied to its flagship headquarters in Rochester. If other hospitals were investing in their facilities, Mayo would simply have to invest more. And if other hospitals were milking their more dynamic locations, then Rochester itself would need compete as well.
On January 30th, 2013, Mayo released its “Destination Medical Center” (DMC) vision. To call it ambitious would be a severe understatement. The plan promised a $5 billion investment over twenty years in Mayo’s Rochester campus, with the clinic putting forward $3.5 billion, and an additional $2.1 billion expected from private partners. (Mayo Clinic, 2013) The goal of the plan was to establish Rochester as “the world’s premier destination for health and wellness; attracting people, investment opportunities, and jobs to America’s City for Health and supporting the economic growth of Minnesota, its bioscience sector, and beyond.” (DMC Plan, 2013)
"This bold economic development initiative is driven on the proof of growth in the private sector and not the promise of growth," said Noseworthy in the initial press release. "Mayo Clinic not only intends to protect its current status as one of the world's premier medical institutions but to significantly expand our highly-effective practice model and medical assets to be clearly recognized as a global destination medical center for decades to come.” (Mayo Clinic, 2013)
The clinic also asked for $585 million in infrastructure from the state of Minnesota and the City of Rochester, which would cover facilities like new public parking, transit, utilities, skyways, parks, plazas, streetscapes, and more. (Mayo Clinic, 2013)
Driving this recommendation were a couple interesting findings from Mayo’s research. One key discovery was that while patients were extremely satisfied with the care they received from the Mayo Clinic, they were less than satisfied with the time they spent in Rochester outside of the hospital. Sick people, it turned out, were sick of Rochester.
The second finding was that this same “satisfaction gap” applied to Mayo Clinic employees and Rochester residents as a whole. People were very happy with their jobs, but largely unhappy with the city in which their jobs were located.
“To realize the DMC vision,” says the press release, with a touch of bureaucratese, “it will be necessary to meet visitor expectations with respect to new lodging and hospitality venues, entertainment, retail and visitor attractions.” (Mayo Clinic, 2013) In other words, Rochester would need to get ready for its close up.
DOCTOR KNOWS BEST
The truth of the whole situation is that is that the city of Rochester is the patient on the operating table.
The DMC is a corporate business plan for a modern company town. What’s striking is who was and who wasn’t involved in the planning process. The initial press release announcing this remarkably ambitious urban development—and the half-billion public expenditure—was distributed by the Mayo Clinic, a private corporation. The only quotes in the release come from CEO Noseworthy. It contains just a single paragraph detailing the company’s public outreach, which reads: “Mayo Clinic has been working with public finance and development experts and various public officials to craft a workable plan to finance the public infrastructure costs.” (Mayo Clinic, 2013)
"This is huge," said Rochester Mayor Ardell Brede, getting his say in a later media report. He then defended the City of Rochester’s decidedly un-huge $20 million initial contribution, (roughly 0.36% of the overall cost of the project; later up to $38 million (Reilly, 2015)) by promising that with further growth the city would be able to add more. (Scheck, 2013)
But ought the municipal government even feel an obligation to do so? The research and planning was conducted by consultants hired by the company. The studies, the plans, and the desired outcomes were decided by the Mayo Clinic. The final DMC design plan, released in December of 2014, credits the work of seven development, architectural, and design consultant firms. The City of Rochester, Olmstead County, and their respective planning departments are credited as “Contributing Partners”, who, along with the Mayo Clinic, “provided information to, and participated in, the development planning process.” (DMC Plan, 2013)
The DMC effort took the shape of a classic corporate strategic plan. The plan originated out of market pressures in the private sector. The planners extensively studied the problem, developing a comprehensive portrait of the Mayo Clinic’s competitive advantages (strengths), disadvantages (weaknesses), opportunities, and threats. The planners proposed the Mayo Clinic invest in its primary advantage of world-class medical care. They suggested that the clinic address its primary disadvantage of being located in a small city. They saw an opportunity in the clinic’s massively influential position in its home city and state. And they concluded that without addressing these issues, the clinic would increasingly lose an edge to other rivals.
After completing the analysis, the planners developed the vision of Rochester as the “Destination Medical Center,” anchored by the Mayo Clinic. Finally, they partnered with professionals to develop a detailed design plan for the city and clinic campus in order to transform the city and achieve the DMC vision. Alternatives, such as downsizing, diversifying into other industries (there is an IBM plant in Rochester that employs several thousand people), and outright failure, were not seriously considered.
The public good was taken as a given in the DMC planning process. While public input was sought during the design phase, the plan largely assumes that what is good for the Mayo Clinic is also good for Rochester. This isn’t as arrogant as an assumption as might normally be expected. When one-third of the MSA workforce is directly paid by one employer, the public good is obviously tied to that company’s wellbeing.
"This town wouldn't be here if it wasn't for Mayo," said Chad Roelofs, a bartender quoted by the Wall Street Journal. "You're either going to Mayo, work at Mayo or are selling something to Mayo." (Nicas, 2013)
SECOND OPINION NOT NECESSARY
The DMC plan was proposed in 2013, to a Minnesota government controlled entirely by the Democrat-Farmer-Labor (DFL) party, and a year after a bi-partisan legislature had approved a half billion subsidy to build a new stadium for the Vikings football team. Its chances for passage were good, especially as the new DFL majorities moved to reshape the state’s tax rates to raise revenues.
Still, there was a substantial lobbying effort. One event of note occurred when Noseworthy told an audience in Washington D.C. that “we’re never going to leave Minnesota,” but that the Mayo Clinic had “49 states” who would fight for the company’s next investment. (Dias, 2013)
Back in Minnesota, the good doctor’s words were interpreted as a warning against the legislature tinkering too much with the DMC proposal. There’s no doubt that they were. But the statement also illuminated the extent to which geography did and did not matter in the DMC plan. The plan, after all, was never called “Rochester Medical Center.” The “Destination” in “Destination Medical Center” was never site specific.
In some strange sense, this incredibly transformative civic vision was never quite about the place that it aimed to transform so thoroughly. Had the politicians in Saint Paul not committed to the proposal, perhaps the new “global destination medical center” would’ve instead been built in Rochester, NY. A defection would’ve been a catastrophe for the Minnesota’s third largest city, and a heavy blow to the state’s burgeoning medical industry.
Of course, the Minnesota legislature approved the funds.
The nuts and bolts of the DMC plan were developed over a period of two years after the plan’s release and legislative approval, and completed in April of 2015. The final plan runs to 694 pages and contains a wealth of information, including but not limited to demographic and economic trends and projections, case studies of health parks and mixed use innovation districts, and a comprehensive master plan for the downtown with site plans, form recommendations, and renderings. Through the process of completing the plan, the work became much more localized. The 2013 legislation approving funds for the plan established the DMC Corporation as a non-profit to oversee the implementation of the plan and provide public oversight. The eight member board was appointed by the Governor, Olmstead County, the Rochester City Council, and the Mayo Clinic. Public officials are well represented, including Mayor Brede, two other local elected officials, the Lieutenant Governor, and the former Mayor of Minneapolis, R.T. Rybak.
The plan presents a detailed portrait of Rochester’s future. Tied to the expansion of its largest employer, Rochester’s population is expected to approach 175,000 by 2040, and the population of the county will grow over 200,000, which comes out to nearly 75% growth. (DMC Plan, 2013) The amount of jobs is expected to grow by the same amount, to roughly 165,000 for the county by 2040. (DMC Plan, 2013) As the city grows, the plan calls for a broad reshaping of the city’s fabric, especially in the downtown area, where new public spaces, parks, markets, cultural centers, and landmarks are envisioned. Once or twice, the plan dips a toe into the pool of self-parody, such as when it calls for “a crystalline arrival pavilion, combining the pastoral feel of New York’s Tavern on the Green with the splendor of Paris’ Louvre Pyramid visitor center” or “a Wi-Fi-connected urban park suited to the 22nd century.” (DMC Plan, 2013) Over-ambition was clearly not a concern for the planners.
The overarching details of the master development plan center on eight core principles. (DMC Plan, 2013)
1. Livable City, Retail & Dining
2. Sports, Recreation & Nature
3. Hotel & Hospitality
4. Commercial Research & Technology
5. Health & Wellness
6. Learning environment
7. Entertainment, Arts
These principles are best embodied in the downtown design plan, which is the heart, soul, and chief selling point of the project. While developers and politicians doubtless appreciated the market analysis, everyone could be awed by the renderings and the vision for the city’s central business district, which is oriented around a t-shaped axis and divides the CBD into six component parts, each with their own goals, focal points, and names like “Heart of the City” and “Discovery Square." The rest of Rochester, where the Mayo Clinic’s control is not so absolute, is a peripheral concern.
In terms of urban form, the plan places a premium on mixed-use development. The plan calls for a wealth of new amenities and infrastructure, including new parks, public art installations, a collaborative area between the Mayo Clinic and the University of Minnesota-Rochester, and even a streetcar circulator. (DMC Plan, 2013) The giddy thumbprints of architects, landscape architects, urban designers, and talented computer graphics artists are obvious. It all looks like Sim City. To be honest, it all looks fantastic.
It’s hard to root against the Destination Medical Center plan. It is something of a showcase for the latest ideas in urban planning. It’s all there, from an emphasis on mixing uses to intricately detailed plans for public space. The case studies included in the plan are a “who’s who” of in-vogue urban design ideas. Yes, the Portland Streetcar is profiled. Yes, Hammarby Sjöstad is studied. (DMC Plan, 2013) There are a lot of good ideas in the DMC proposal. Smart, talented, and thorough people have worked on this plan.
Happily, the DMC vision has a lot going for it. The plan benefits from broad political backing, in a state that is presently running a billion dollar surplus. Minnesota has a long progressive tradition of government investment, high public participation in the political process, and relatively high confidence in government. With public funds already committed, the DMC plan has the weight of the state behind it, and the state’s opposition Republicans have largely not opposed the plan either.
The commitment of the Mayo Clinic is, of course, the most substantial part of the package, and that too seems secure. Because the DMC plan originated with the clinic and its aims arose directly from the clinic’s aims, the plan ought to be able to count on the hospital’s capital investments in the future.
So much for the money and the political will. Those were always necessary to get the plan off the ground. But now that the DMC plan is moving forward will others get on board? This is the central question for the clinic, the city, and for planners. For all the excitement of a new future for Rochester and all the work on the plan, can Rochester really be so drastically remade?
There are two distinct groups who are the targets of the DMC plan: millennials and developers. Millennials are something of a Macguffin for planning exercises across the United States. That is to say, the justification for appealing to millennials is often its own justification. That’s also the case in Rochester, where the clinic’s difficulties in attracting human capital are clearly not preventing Mayo from being among the top two hospitals in the country. Still, the specter of millennials abandoning the city in droves is a useful tool for accomplishing a physical transformation that truthfully appeals to more than just one generation. “To attract young professionals,” explained a recent segment on Minnesota Public Radio, “the development plan envisions making Rochester more like the Twin Cities, with more downtown living, walkable public spaces, parks, restaurants, bars, and music venues.” (Baier, 2015) These amenities, not at all coincidentally, might appeal to longtime Rochester residents and the Mayo’s bored patient families as well. The movement of millennials is this case is the mercury in the thermostat—a measure of success or failure.
“Overall, Rochester is net negative in terms of millennials,” says Patrick Seeb, Director of Economic Development and Placemaking for the DMC project. “A lot of eighteen year-olds leave our city and not enough twenty two year olds come back. There’s a lot of work to be done, but the first step is to acknowledge that there’s a gap and that you need to work on it. I think we’ve taken that step.”
Nothing has been built yet, but expectations are growing. "It's getting there," says Will Forsman, a coffee shop manager who supplied a not-entirely-ringing endorsement to MPR. "You hear a lot of people complain about it but you've got to take it for what it's worth. There's a lot to do if you're looking for it." (Baier, 2015)
The other key group, developers, are needed because they are expected to carry a heavy load. The original DMC proposal projected that private investment following the lead of the Mayo Clinic and the state would total $2.1 billion. These are early days yet, but that is a significant expectation, and the ultimate success or failure of the plan may depend on whether developers are as bullish on the future of Rochester as the elected officials. Two years after the initial plan was approved, and over half a year after the design details were produced, land prices are up, but the first DMC projects are just breaking ground. Many more, however, are in the works, including a $155 million Hilton hotel that was planned before the DMC was approved, and which will finally give Rochester its first four-star hotel. $200 million in private development related to the DMC is expected to be under construction by the end of 2017. (Black, 2015)
“I think it’s important to understand that DMC is a reflection of the direction that this community was going,” says Seeb. “I know people often times want to put a stake in the ground and say what’s pre-DMC, what’s post-DMC, and that’s fine. But the DMC wouldn’t be what it is but for the kind of transformation that Rochester was already starting to go through. DMC being intentional about that change.”
This second target suggests a critical angle to understanding the DMC plan, and a more challenging line of attack. Edward Glaeser, a well-known Harvard urban economist, has repeatedly emphasized the importance of diverse urban economies in his work, not just as a safety net against the collapse of one industry, but also as a means to growth. In his book, The Triumph of the City, he notably compares the cities of Detroit and New York, which both suffered during the second half of the 20th century. Only New York has come bouncing back. Of Detroit, Glaeser writes: “Cities like Detroit with big firms have suffered weaker employment growth than cities with more and smaller employers. This relationship holds, no matter what types of industries are involved, how old the companies are, or how big the cities are.” (Glaeser, 2011)
Already reliant upon the Mayo Clinic and the health care industry, the DMC plan binds the two together more closely than ever before. This single-industry economy may not just be vulnerable to shocks. According to Glaeser, it also may well struggle to grow in the long term. This is why the private component of the DMC plan is so critical. If DMC is truly to be a success, it will in the long term result in a more diverse Rochester economy, by giving entrepreneurs the ability to break off from Mayo and create their own firms. The DMC plan talks a good game about a proposed “University Research Park” that would “encourage the establishment and growth of new companies” and help “technology transition from the lab to the marketplace.” (DMC Plan, 2013) But whether this will be created and what success it will have in achieving its aims will be determined by the private sector, and it’s hard to know how it will turn out. The ultimate success or failure of the plan probably rests on the result.
“In many ways, what catalyzed this process was Mayo’s recognition that it couldn’t grow and succeed if it were the only game in town,” says Seeb. “They came to realize this in part because as they are recruiting talent, a lot of people would come with partners who were also looking for employment opportunities. Mayo simply can’t be the only job provider and opportunity provider. So the need to diversify the economy is in Mayo’s best interest, and it’s consistent with the city’s interest as well.
A MINNE-APPLE A DAY
As execution of the plan proceeds in Rochester, it’s worth considering the one major way in which the city’s momentum could be dramatically accelerated. This is the intriguing and game-changing future universe in which some combination of the State of Minnesota and private actors bring high speed rail to Rochester. The state’s major metropolitan region of Minneapolis-Saint Paul is just a 75 minute drive away. Those patients who do not fly to Rochester via private airplane often come via an air shuttle service run by Delta from MSP International Airport. Because of fixed rail’s competitiveness at these middle distances, municipal and state leaders have long considered the possibility of a fixed train route running from the cities that would deliver passengers into the heart of Rochester. The DMC plan calls for the city to construct a central station to act as the hub of the city’s future transportation network, and the southern terminus of the potential high speed line that could make trips between the Twin Cities and Rochester a painless daily occurrence for thousands.
The chances of the rail line, currently named “ZipRail,” ever being built probably rely heavily on the chances of the DFL party gaining a sizable majority in state government at the same time that the national Democratic party gains power, and perhaps a governor who makes it his mission to build the line. The Minnesota Department of Transportation recently halted an environmental review of the proposed routes of the high speed rail for a lack of political will, although a private study financed by Asian investors is continuing. Should the political winds blow its way once again, the ZipRail project could prove to have a huge impact. (Carlson, 2015)
A high speed rail route to Minneapolis-Saint Paul offers promise and peril for Rochester. High speed rail would make it easier to commute between the two cities, setting up a contest in livability that Rochester may well fear, or perhaps a clash of school districts and peace and quiet, which Rochester might benefit from. It will certainly expand the cultural offerings available to Rochester residents. It could also increase the economic links between Rochester’s medical practice industry and the Twin Cities powerful medical device industry. In this respect, high speed rail could be enormously helpful in Rochester’s efforts to facilitate medical start-ups that it hopes will result from the pooled human capital drawn in by the DMC initiative. Unlikely as it is, the incredible paradigm-changing potential of high speed rail must be considered in any dissection of Rochester’s post-DMC future.
YOU ONLY LIVE ONCE
Rochester’s Destination Medical Center plan must surely rank among the most ambitious contemporary development projects undertaken in the United States. Rarely do cities so completely aim to remake themselves. Rarely do they have the opportunity to do so. Rochester’s size, wealth, and mind meld with a single company made the DMC plan a unique occurrence.
The overriding question is now whether it will work. Can a company town reinvent itself in the twenty-first century? Can it betray its intrinsic purpose and become more than just a place to work? If it does, the plan will be a triumph for the kind of top-down master planning that is not just rarely attempted, but also not in fashion in the US. After a recent history of good intentioned planning overreach that had disastrous consequences, there are often good reasons for playing small ball. But success in Rochester could show that when undertaken in the right circumstances and with enough care and attention to detail, planners can pull off a detailed city plan on a grand scale.
On the flip side, the plan unquestionably exposes the Mayo Clinic, Rochester, and Minnesota to a substantial amount of risk. Real money is on the line. It’s easy to think of a long litany of ambitious, high profile megaproject failures. Planning on such a transformative scale carries with it tremendous risk. Perhaps Rochester will benefit from being the first small American city to dream this big, while others may later try and fail. Or perhaps Rochester will simply pay for its hubris and its ambitions will be quickly forgotten. Big gambles often don’t pan out. But casinos would be empty if nobody ever bet big and won.
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