Mortenson sets timeline for Mayo project in Rochester

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ROCHESTER, Minn. — M.A. Mortenson Co. expects to break ground by October 2017 on the first Destination Medical Center building ordered by Mayo Clinic for downtown Rochester.

The project cements the company’s role as both a builder and developer in the first stage of the 20-year redevelopment project. In September, Mayo picked Golden Valley-based Mortenson as the developer for Discovery Square, one of six sub-districts to be redeveloped in the $6 billion buildout plan.

Jeremy Jacobs, a Mortenson development executive, confirmed the company’s dual role during a panel discussion in Rochester on Thursday night. A 60,000- to 100,000-square-foot building is the first project for Mayo in the Destination Medical Center effort. Its use is yet to be determined. As a whole, Discovery Square development is intended to attract biotechnology entrepreneurs and third-party tenants, Jacobs said.

Jacobs called the timeline “aggressive,” but something Mortenson aims to meet.

“So, say by Oct. 1, 2017, we would hope to be moving dirt, as they say,” he said.

Thursday’s event was the third-annual Larkin Hoffman Real Estate Forum and the first to be held in Rochester. The Minneapolis-based real estate law firm drew 142 builders, developers, accountants, engineers, architects and others from the construction and development industries. The firm established an office in Rochester earlier this year.

“Obviously there’s a lot going on in this community,” said Larkin Hoffman President Bill Griffith. “It does not escape our notice.”

Rochester has 85 development proposals under consideration, many of them centered in downtown and the Destination Medical Center districts, according to the city. One development project caused Larkin Hoffman to make a last-minute substitution on its expert panel. Andrew Chafoulias, CEO of Rochester-based Titan Development, pulled out of the discussion to work on an unnamed proposal Griffith said will be announced in the coming weeks.

Titan has been planning to build its on-again, off-again mixed-use Broadway at Center tower in downtown Rochester for three years.

Mortenson’s Jacobs was Chafoulias’ replacement. Jacobs said Mortenson Chairman David Mortenson put him on the project soon after the company hired him last year from Minneapolis-based Ryan Cos. US Inc.

“He said, ‘There’s one project that’s the most important project going on right now in our state. It’s your job to go win it,’” Jacobs said.

Mortenson expects to pick an architect for its Discovery Square work in the next 60 days, he said. Mayo has control of a “significant portion” of the eight-block Discovery Square, Jacobs said. Mortenson is working with Mayo to find the right site for the first new building.

Other members of the panel were Rochester-Olmsted Planning Director Mitzi Baker; Lisa Clarke, executive director of the Destination Medical Center’s Economic Development Agency, and Gerrard Corp. President Peter Gerrard.

Gerrard brought perspective to the forum as a downtown developer, having built the mixed-use housing project called Metropolitan Market Place at 515 First Ave. SW.

Baker said Rochester is prioritizing Destination Medical Center-related development. The planning staff is working on those projects as they come in to make sure staff comments are delivered to applicants quickly. Development outside the zone is also picking up, she said, which means some of those projects “do lag” others because resources are committed to the massive buildout project in downtown.

The city is also developing a traffic study to make sure the thousands of new downtown employees and residents will be able to get to work and home. The city recently installed its first Nice Ride rental bicycles downtown and is considering infrastructure options that will keep traffic flowing freely in the future, Baker said.

Dr. Clark Otley, Mayo’s chair of dermatology and the economic development agency’s vice president, said that working out how people will travel in and out of downtown is crucial to the project.

“To have a good city, you have to be able to move people efficiently so you don’t fill the middle of the city with parking lots,” he said in a keynote speech.

The specifics on Discovery Square are an early look at what Mayo and the city are planning for downtown Rochester. Projects in the eight-block subdistrict include up to 2 million square feet of space. Based on the timeline Mortenson has planned, the first building could be finished in the first quarter of 2019, Jacobs said.

The Rochester City Council firmed up one other piece of the plan in September, choosing Minneapolis-based RSP Architects to design public spaces for Rochester’s “Heart of the City” district.

Related content:

• Mayo picks Mortenson as Discovery Square developer
• Rochester council gives RSP final not for ‘Heart of the City’
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