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Mayo expansion bill eases past 1st Capitol hurdle

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Mayo Clinic expansion
The Mayo Clinic, Minnesota's largest private employer, pressed state lawmakers last month to commit more than $500 million toward an ambitious development project tied to the renowned medical center in Rochester, Minn.
AP Photo/Rochester Post-Bulletin, Elizabeth Nida Obert

A bill that would finance redevelopment around the Mayo Clinic's proposed expansion in Rochester is starting to move through the Legislature. 

The House Jobs and Economic Development Committee approved the measure easily Thursday, but the bill's financing plan is expected to face some much tougher questions soon. 

Members of the committee spent most of their time praising the bill and the Mayo Clinic's promise to invest in Rochester. Clinic officials again emphasized their promise to spend $3 billion to expand in Minnesota. 

In exchange, they want $585 million in public financing to help redevelop the city of Rochester. The Mayo Clinic's Patricia Simmons said the investment is needed to ensure that the Mayo Clinic continues to be a worldwide leader in health care.

"We need to grow to succeed," Simmons said. "We need to grow to maintain and capture that historic Mayo Clinic that we know where we're the destination for healing and health and hope for people in the 50 states and people from 145 countries in the world."

The plan relies on capturing a portion of future state and local taxes in Rochester. The mix would include personal and corporate income taxes, sales taxes and property taxes. 

Supporters of the legislation say the money would be used for roads, transit, parking garages and other improvements. The money could also be used to help build retail shops, multimedia infrastructure and housing. The Mayo Clinic says the expansion will add between 35,000 to 40,000 jobs over the next two decades.

Rep. Mark Uglem, R-Champlain, was one of several lawmakers to praise the proposal because of the jobs it will bring.

"This is a project that I think exhibits some of things that we need to do more of in this state," Uglem said. "It's a public private partnership where there's virtually no risk to the state in this."

But other lawmakers said there is plenty of risk. One member asked why some of the spin-off medical businesses that would benefit from the clinic's expansion aren't going to help fund the Rochester improvements. Others worried about the precedent that could be set if the bill becomes law. 

DFL Rep. Tim Mahoney, chair of the House Jobs and Economic Development Committee and a co-author of the bill, said Mayo's plan could open the door for other communities to lobby for a similar deal. 

"It opens up a huge Pandora's box because if Rochester does it, why wouldn't St. Paul or Minneapolis or the transportation system or whatever do it? We have a billion dollars just in St. Paul to fix and this would be a way to do it," the St. Paul lawmaker said.

The committee unanimously approved the bill. It has several more committee stops before it reaches the House floor.

 Mahoney also warned that supporters of the legislation should expect the bill to get rolled into a larger tax bill. That could put some Rochester Republicans in a difficult position because that tax bill will likely include tax increases to help balance the budget along with the Mayo expansion plan.