Nick Pompeian reminisces about the heydays of the 1990s when downtown Rochester was a destination for families like his, with a Gap store, movie theater, and arcade.

He also recalls how, after a period in which those same types of businesses left for suburban shopping centers, downtown went through another renaissance — this time in the mid-2010s — with a burgeoning arts scene, new restaurants, and the feeling that downtown was a place to be.

“I remember high school classmates coming back and being like, ‘man, Rochester’s pretty cool. Holy cow, how lucky are you,’ ” said Pompeian. “We had really good times for four or five years.”

Pompeian, the co-owner of a commercial real estate firm, is not alone in conjuring up images of the downtown of the not-so-distant past. Up until a couple of years ago, Rochester had reason to feel enthusiastic about its downtown. The city and Mayo Clinic, boosted by the Destination Medical Center initiative, had begun investing millions into the area and the market was responding accordingly. Apartments and hotels were popping up; major companies like Google and Boston Scientific were announcing new Rochester offices; and, what would be a surprise to anyone who ventured down First Avenue on a Saturday now, there was nightlife downtown.

But then, in what seemed like the blink of an eye, downtown took a downturn — one it has yet to come back from. Part of the blame, of course, falls on the Covid-19 pandemic, which led to restrictions on businesses, kept people home, and fundamentally changed the nature of work. The change in behavior was especially evident in a city that prioritizes health.

Still, Pompeian and others interviewed for this story say the trends hampering downtown today were set in motion before the pandemic began; things like how people shop, what types of experiences they are looking for, and how they view the need to come into the office.

"These headwinds were happening, they were just more subtle — and then they really blew up with Covid and accelerated people's behavior changes,” said Patrick Seeb, executive director of the DMC Economic Development Agency.

The challenge for downtown Rochester, not unlike many downtowns across the country, is that those headwinds appear unlikely to shift dramatically. Notably, Mayo Clinic, the city’s largest employer, has said it will continue to let 2,900 employees who previously worked downtown to work remotely indefinitely. There are no signs that policy will change anytime soon; nor is it likely that the convenience of online shopping will become any less so; or that DMC-induced commercial real estate costs will drop sharply.

All of this leaves downtown Rochester in a state of uncertainty. Can downtown businesses weather these forces? What should DMC do to support small businesses? What impact will the influx of downtown residents and students have on the downtown economy?

Most importantly, though, it raises the question: In an age when people no longer have to come downtown, what can a community do to create a place people want to visit?

"Relying on people who had to come downtown because they were being paid to come downtown for work is not a sustainable model, especially in this new world we are in,” said Seeb. “So we have to make a downtown that is attractive and appealing, that people will make a point of getting in their car and coming into the downtown."

Where are the people?

From a skyline view, downtown looks like a booming place. Large cranes tower over the construction of new research facilities and parking ramps.

But shift your lens to the street level and you will get a much different perspective. On buildings both old and new, “for lease” signs have become an all-too-common sight.

While DMC was not able to provide figures on the amount of empty space, Pompeian, the commercial real estate agent, estimated that there is now more than 180,00 square feet of available office and retail space downtown.

That includes a number of spaces that Mayo had leased before allowing more of its staff to work remotely, a move that has had ripple effects throughout the downtown.

Carroll’s Corn in the downtown subway / William Forsman

Seamus Kolb is the owner of the Carroll’s Corn, a longtime staple in the downtown subway, In 2019, Kolb said his business would see anywhere from 300-400 guests per day. Today, the current average is about half that. To compensate for the slower foot traffic — not to mention the increased costs of doing business — Carroll’s Corn has added new revenue streams through e-commerce and wholesaling to retailers in the region.

“We remain optimistic on the long-term success of small business in Rochester's downtown space,” said Kolb. “But the decisions made today are going to determine how our downtown rebounds. We want to see small businesses prioritized and included in these decisions.”

Not every business, however, is as confident in the trajectory of downtown. A few blocks to the south, Lizzy Haywood, CEO of the People’s Food Co-op, said she is concerned that there is not enough critical mass downtown to sustain businesses through the short-term.

The co-op, like many other businesses outside of the core medical district, has bounced back from the pandemic slower than they anticipated, due in part to workforce trends.

“We moved to this location to be close to Mayo Clinic and [University of Minnesota Rochester] and all of the adjacent neighborhoods,” said Haywood. “UMR has not expanded into the south-of-6th area as expected, and the pandemic has changed the daily in-and-outflow of traffic during the weekday. While it brings more residents in the trade area, we are concerned that closures of downtown businesses and the lack of great public transportation will limit the growth opportunities of the co-op.”

In a statement, Mayo spokesperson Ginger Plumbo said the clinic continues to individually review leases as they come up, adding that its “need for physical space is continually evolving to meet the needs of the practice, education, and research.”

Plumbo also noted that, despite the reduction in office space, Mayo continues to make sizable investments in the downtown, including a $200 million expansion of the Proton Beam facility and the construction of the new Anna-Maria and Stephen Kellen research building.

“These new facilities will add more staff who will be located downtown and in the case of the Proton Beam facility, serve the needs of over 900 additional patients each year,” said Plumbo.

A changing model

For decades, downtown Rochester has been shaped by the demands of those who frequent the area the most: workers and visitors.

But according to Pompeian, whose commercial real estate firm RGI, Inc. has been active in the market for nearly 40 years, it may be time to rethink that model.

“The days of relying solely on Mayo Clinic visitors, in my opinion, to support these businesses — that’s gone,” said Pompeian. “And I think we are going to continue to see that because medical technology is advancing so quickly. Think of the online visits Mayo is doing now; of course they are doing that, it’s easier for everybody. But what it then does is affect the number of people who are going to be down here.”

Evolving from that model, Pompeian said, will require creativity as well as a shift in mindset. He pointed to other cities, such as Minneapolis, that have worked to fill vacant storefronts with nonprofits and early-stage entrepreneurs, often by incentivizing them to take on the space for a discounted rate with the hopes they will eventually become permanent, paying tenants.

“It’s been that mindset for so long that ‘Mayo will just continue to rent from us and it’s going to be all good and it’s going to be very easy.’ No one had to be creative,” said Pompeian. “So, it’s no knock on a landlord, I just don’t think they ever had to think that way.”

Construction of the 11-story Anna-Maria and Stephen Kellen Building at the intersection of 3rd Street SW and 4th Avenue SW / Wiliam Forsman

Seeb, DMC’s director, sees lessons from other cities as well, particularly when it comes to housing and the impact it could have in reshaping the downtown. He referred back to the 1990s when older cities worked to convert warehouse spaces into affordable housing. He said similar opportunities could be available today when it comes to empty office space.

“We see a lot of opportunity — and momentum — around housing and the appeal of living downtown,” said Seeb. “And it's happening slowly, but the downtown residents are going to reshape what retail looks like, especially when there are fewer downtown employees."

Building out new housing, however, is expensive and Pompeian said it will take concessions from both private and public stakeholders to make it happen. Still, he believes market forces — along with the determination of the community — will ultimately prevail.

“We will see a revitalization. I know we will start seeing some changes — because it has to be done,” he said. “We can’t have vacant buildings that just sit there. Landlords don’t want that. The community doesn’t want that.”

Sean Baker is a Rochester journalist and the founder of Med City Beat.

Cover photo by William Forsman