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Optimizing infrastructure investment: Strategies employed by Minnesota’s largest public-private partnership 

The key is to view infrastructure investment as a tool for generating economic growth and community prosperity and not simply as a set of public works projects.

A rendering of the Destination Medical Center.
A rendering of the Destination Medical Center.

At the 2023 Session Priorities event hosted in January by the Minnesota Chamber of Commerce, Gov. Tim Walz heralded this as “the Golden Age for infrastructure.” Indeed, Minnesota will soon begin to tap nearly $2.6 billion in new federal funding, which could grow to twice that, for a wide range of infrastructure improvements.

How can we optimize this massive amount of infrastructure to accomplish the greatest good?

The key is to view infrastructure investment as a tool for generating economic growth and community prosperity and not simply as a set of public works projects.

Minnesota’s unique “infrastructure investment laboratory” where this approach is being implemented is Destination Medical Center (DMC), the largest public-private initiative in the state of Minnesota. At DMC, the state, Olmsted County and the City of Rochester have committed $585 million over 20 years to stimulate an anticipated $5.6 billion of private investment that leverages Mayo Clinic’s legacy to make Rochester a global destination for health and wellness.

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DMC has understood its charge to maximize the economic opportunity enabled by public infrastructure investment. Its experience offers insights for optimizing the state’s forthcoming infrastructure investments.

Start with plan

Before public DMC funds were invested, Rochester spent two years developing a long-term development framework that contemplated current and anticipated community needs, strategies for tax base growth, sustainability objectives, and economic opportunities. With this framework, DMC has prioritized infrastructure investments against established community objectives. Furthermore, by focusing investment in the city center, DMC is enhancing the redevelopment value of previously underutilized or blighted downtown sites, rather than promoting continued urban sprawl.

Engage the community

From its inception, DMC has engaged with the community for planning and project implementation.  However, recognizing that typical community engagement tools have not always reached diverse audiences, DMC adopted a new model called Community Co-Design to connect project planners with individuals or populations who are most impacted by a project and least likely to influence its development.  Among the places where this model was used is Discovery Walk, a new public space connecting Mayo Clinic with Soldiers Field Park through Discovery Square. Co-designers helped ensure the design reflected Rochester’s diversity and was built to be inclusive, accessible, and welcoming.

Share the wealth

When DMC launched in 2015, the board set targets for Woman-and Minority-owned Business Enterprise (WMBE) participation in project design, construction, and administration. To achieve these targets, DMC needed new approaches to reach WMBE contractors, help them obtain WMBE certification and develop project bid packages.

A new and very promising effort is underway. BIPOC women make up 13% of Rochester’s population yet fill less than 1% of available construction jobs, even as contractors find themselves with workforce shortage. The city engaged BIPOC women, construction companies and labor associations to design pathways for increased BIPOC participation in the construction industry through education, training, hiring and work-culture interventions. Bloomberg Philanthropies Global Mayors Challenge recognized the effort with $1 million of grant support.

Mitigate the messiness

Infrastructure projects are inherently disruptive. But through a proactive program called Business Forward, DMC works with businesses affected by construction projects and the engaged contractors to minimize interruption to access and other business owner concerns.

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Prototype first, pay later

Before investing millions in new infrastructure initiatives, DMC prototypes projects when possible. For instance, before fully committing to a new bus rapid transit system, a built out prototype of a transit stop was put in place for a four-week testing period for community feedback.

Respect local control

DMC’s governance model recognizes the importance of state and local authorities. While the DMC Corporation can authorize the use of DMC public funds, only the Rochester City Council can approve the actual expenditure of those funds. This “yes and yes” model ensures the state’s aspirations are realized, but only if they are consistent with local desires.

At seven years in, DMC is delivering on its promise. The initiative has helped create thousands of new jobs, stimulate additional tax revenue beyond initial projections, spark more than $1 billion in private investment and attract a growing cohort of health and science-related businesses to Rochester. The infrastructure investment on which Minnesota is about to embark – if viewed as an opportunity to accelerate economic development, equity and sustainability versus merely replace aging assets – could favorably shape the state’s future for decades to come.

Kim Norton, Pam Wheelock and Patrick Seeb
Kim Norton, Pam Wheelock and Patrick Seeb
Kim Norton is the mayor of Rochester, Minnesota, Pam Wheelock is the board chair with Destination Medical Center Corporation and Patrick Seeb is the executive director of Destination Medical Center Economic Development Agency.