Plans emerge for a third Discovery Square building; Greek restaurant planned for Peace Plaza

The developer behind the first two buildings in the Discovery Square complex has begun talks with the Destination Medical Center EDA about the potential construction of a third building in downtown Rochester.

DMC officials said Monday that Mortensen has submitted an application to the EDA for a seven-story, 156,000-square-foot facility to be built on the northeast corner of Third Avenue SW and Fifth Street SW. The proposed location is just south of the existing two Discovery Square buildings.

Catherine Malmberg, the EDA’s director of public infrastructure and development strategy, told the DMCC Board that the building would include lab space and biomanufacturing capabilities — potentially becoming the first building in Minnesota to meet cGMP guidelines set by the FDA.

Mortensen estimates the development of a Three Discovery Square would cost $72.8 million. The company has requested $12.7 million in DMC funds, or about 17.5 percent of the project cost. The presentation outlined the potential for the development to create 330 permanent jobs.

During Wednesday’s meeting, DMCC board members lauded the possibility of an addition to the Discovery Square sub-district. They did, however, ask the EDA to carefully assess the public investment in the project.

“I am struck by the almost identical proposed contribution between DMC and equity funds,” said newly-elected DMCC Board Chair Pamela Wheelock. “And I think it would be very important to understand what causes the market gap; and if we are going to invest at that level, is there some creative way to structure our financing?”

Patrick Seeb, executive director of the EDA, said DMC has structured look-back provisions into past financial assistance agreements with Mortensen. Those agreements, he said, would allow DMC to adjust its financial support if the building outperforms projections from the company.

DMCC Board Member RT Rybak pushed the EDA to possibly go a step further — by making DMC more of a partner in the project. In sharing some of the risk, he said, DMC should also share in the success; in DMC’s case, that would mean preserving some of the building as a public amenity.

“I want us to be highly motivated to help on this, but I want us to be seen as a partner representing the community,” said Rybak.

Council President Brooke Carlson, also a member of the DMCC Board, expressed some skepticism in the plan for a third building, noting that the second Discovery Square building — which is nearing the end of construction — has yet to secure any tentants.

Despite that, Chris Schad, director of business development for DMC, told the board that there are active conversations with numerous companies about leasing portions of the Two Discovery Square building.

He noted that the pandemic has led to modifications in the types of activities that will likely be housed in the five-story building.

“The projected use of Two Discovery Square initially was more office-based around digital health, and Covid has sort of changed that calculus a little bit,” said Schad. “And so the building has actually been re-positioned during construction to be more of a wet-lab-centric operation.”

Biotech firm raises additional $30M

Vyriad, a Rochester-based biotechnology company, has secured $29.5 million in new funding in its efforts to expand the use of its novel oncolytic virus therapies for the treatment of cancers.

The investment from Harry Stine of Stine Seed Farms, LLC brings the total amount Vyriad has raised since 2015 to more than $100 million. Other notable investors include Mayo Clinic, Mirae Asset, Regeneron Pharmaceuticals, and the Southeast Minnesota Capital Fund.

Vyriad, which was founded by researchers from Mayo Clinic and the University of Miami, operates out of a 25,000-square-facility in the Rochester Technology Campus (formerly the IBM campus).

In a statement, co-founder Dr. Stephen Russell said “Vyriad aspires to become a powerhouse for the generation and partnered commercialization of high performing safety-modified oncolytic viruses that, used alone or in combination with established therapies, can eliminate cancer without significant off-target effects or untoward toxicities.”

A new Greek restaurant on Peace Plaza?

Signs are up on Peace Plaza for a new Greek restaurant.

Opa!, the largest Mediterranean franchise in Canada, appears to be taking over the former Mac’s space, 20 First Street SW. The menu for the concept includes a variety of platters, salads, and wraps.

(The new Opa! should not be confused with Opa! Opa!!, an independently-owned Greek restaurant on 15th Avenue in southeast Rochester.)

Additional details were unavailable at the time of publication.

Canadian restaurateur Johnson Osei, who leases the space, did not respond to our request for comment about plans for Opa! His last venture in the space, Jerk King, has an active lawsuit against the city and DMC over construction impacts related to the Heart of the City project.

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