COVID-19 coverage: DMC to accelerate projects, begin hyperlocal bidding strategy
With much of the commercial activity at a standstill downtown, Destination Medical Center leaders say they plan to keep their foot on the gas and even accelerate some key redevelopment initiatives.
“We know that while some industries are being asked to postpone their work at the moment, there are some things that can continue in a way that perhaps can add to job opportunities,” Patrick Seeb, director of economic development and placemaking, said during a presentation Thursday to the DMC Corporation Board’s executive committee.
Among the initiatives that could see their timeline expedited is the $15 million Heart of the City project. Work on the project had been scheduled to begin later this spring, with construction lasting for the next two years.
However, given that many businesses have already been forced to temporarily close or limit their service due to the coronavirus outbreak, city and DMC officials said accelerating the project could shorten the window of time that businesses are impacted by construction.
“There’s this balance, because everything is shut down now, if we could move some of those activities a little faster… such as Heart of the City; if we could move those along soon while nobody is downtown anyways, it may disrupt businesses for a shorter period of time,” said Mayor Kim Norton.
But while the strategy may serve as a long-term remedy, at least one business owner says she is worried about the immediate consequences of construction, especially given current circumstances.
Natalie Victoria, owner of Victoria's Ristorante & Wine Bar, told us Friday that she believes the project should be postponed rather than expedited. Her business is located on the northern edge of the project’s boundaries.
“Businesses set to open back up once the mandate is over should not have additional barriers in place,” said Victoria. “We will be in a fragile state.”
Since Gov. Tim Walz’s executive order to close down restaurants and bars, Victoria said her business has been getting by with a limited staff by offering take-out. When her restaurant does get the opportunity to re-open for dine-in service, she said it will take time for the business to recover.
“We rely heavily on hotel, patient and event traffic — and quite frankly it will be a long time before that returns to normal,” said Victoria. “I want to make downtown as accessible as ever for our guests.”
Maintaining workforce stability
While it will be some time before we have a true picture of the economic impact caused by COVID-19, anecdotal evidence suggests the consequences have been devastating for some small businesses, particularly those in hospitality, which accounts for 10 percent of Rochester’s economy.
In one recent survey of over 140 area business owners, about 60 percent of respondents said they have experienced a total or near loss of revenue. Those businesses combined support over 750 employees.
At Thursday’s board meeting, Seeb and other acknowledged the pain the pandemic is inflicting on small businesses across Rochester.
That is why, he argued, it is as important as ever to fast-track shovel-ready projects — such as Heart of the City, Discovery Walk, and public infrastructure related to transportation — in order to create jobs.
“There are projects that will employ plumbers and electricians and brick-layers and labor that are important to the economy and important to maintaining stability in the workforce,” said Seeb.
As part of the plan revealed this week, DMC also intends to implement what officials described as a “hyperlocal bidding strategy.”
According to Seeb, the policy — a result of daily meetings between officials from City Hall and the DMC Economic Development Agency — means making “every effort to break apart the bidding packages for projects so that local community members can bid on portions of the contracts.”
“Imagine in a construction site you need a fence-installer or wayfinding signage or you need protective lighting … these are things for people who are perhaps in the event industry could re-position their work… meaning really finding ways our construction work can stay local and people can pivot their work to participate in the project,” he said.
The proposal was met with broad support. Writing on Twitter after the meeting, DMCC Board Member and Rochester City Councilman Nick Campion said every project that has not yet broken ground “needs to be dissected and refocused” to have the maximum local economic impact.
“We must do everything in our power to lift up local employees and employers in their times of need,” said Campion.
Looking for flexibility
One big question on the minds of board members Thursday was what tools DMC has to support small businesses during this economic downturn.
This year alone, the state will contribute upwards of $20 million to the initiative — leading some in the community to question whether a portion of those funds should be used to support struggling small businesses.
On Thursday, in response to questions from Board Chair R.T. Rybak, DMCC General Counsel Kathleen Lamb sought to clarify how funds could be spent under the state statute. She said there are two key limitations: one, funds must be spent within the boundaries of the DMC district; and two, they must go toward so-called “public infrastructure.”
“In order to comply with the statue, we have to find that it is a public infrastructure project, which frankly is mostly construction, demolitions, acquisition, that kind of thing,” said Lamb.
Rybak said he has been in contact with the head of Minnesota’s Department of Employment and Economic Development about what role DMC could play in supporting the Rochester economy. Moving forward, he said he wants to understand more about any potential ways DMC could use public infrastructure spending to support small business activity.
“Recognizing that in this moment the state is providing a great deal of flexibility in lots of places, we should figure out how far the state can go on that,” said Rybak.
Mayor Norton, a former state lawmaker, said she was unsure whether the Legislature would be in session long enough to consider any potential modifications to how DMC funds can be used.
However, she said whatever does or does not happen in St. Paul should not stop the DMC team from using its expertise in other ways.
“Re-allocated funds, maybe we can’t do that right now, but it doesn’t mean we can’t start that initiative seeking support from other places,” she said.
One such program that has already been put into place is a $250,000 loan fund for small businesses. The fund is being managed by Rochester Area Economic Development, Inc. with support from the City of Rochester.
While hailed as a positive first step forward, Norton said she realizes it’s not enough — adding that the city has already begun taking a second look at its budget. The mayor did not provide specifics.
“I’m hoping we can pick up the pace fairly soon and keep the economy moving with what’s already in play,” said Norton.
Sean Baker is a Rochester journalist and the founder of Med City Beat.
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