Mayo vs. Vikings stadium: state aid requests compared

The Mayo Clinic's request for taxpayer help to become what it calls a Destination Medical Center is drawing comparisons to the Vikings' bid for a new football stadium.

In dollar terms, they're about in the same league. The Vikings are expected to get a $498 million boost from state and city taxpayers. The Mayo Clinic wants $500 million to bolster its $3.5 billion expansion in Rochester. The public money would pay for adding infrastructure like streets and sewers.

Dr. Brad Narr, a spokesman for the Mayo's expansion project, said it could turn Rochester into one of the nation's pre-eminent draws for visitors, like Disneyland made Anaheim a destination.

"Destinations -- let's take football stadiums, like the Vikings or the Green Bay Packers -- where you're trying to increase visitation to ensure the success of multiple businesses, based on a model that brings tens of thousands of people to that area of town," Narr said.

But, Narr said, the comparison ends there. Although the Metrodome brings more than 500,000 NFL fans a season to downtown Minneapolis, Narr said the Mayo is a steady draw, not just a weekend phenomenon.

Skyline of downtown Rochester, Minn.
The skyline of downtown Rochester, Minn., is seen Thursday, Feb. 14, 2013. 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. Mayo says the expansion will add between 35,000 to 40,000 jobs over the next two decades.
Alex Kolyer for MPR

"We have visitation of about 300,000 spread out over 255 workdays, and two hospitals that are major hospitals, that have thousands of people visiting here every single day of the year," Narr said.

But Mayo visitors and staff say amenities that Rochester now lacks could be an obstacle to future growth. And public funding could help change that.

IS MAYO BLUFFING?

Mayo is making some of the same arguments the state's NFL franchise put to lawmakers as the Vikings pursued a new stadium: that public investment will help create jobs. That's the carrot. And they're using the same stick: Ignoring their plea risks losing a major asset to another location.

Economist Art Rolnick, formerly with the Federal Reserve Bank in Minneapolis and now at the University of Minnesota's Humphrey School of Public Affairs, calls that threat extortion.

"You don't know if it's a bluff," Rolnick said.

He said Mayo's decision to invest at home ought to be telling.

"When Mayo did its due diligence on this project, it was pretty clear to them that the synergies are best here in Minnesota, in Rochester," Rolnick said. "Their second or third best was in Arizona. There's a good chance that they would do it here anyways."

PICKING WINNERS AND LOSERS

Minnesota has a mixed record for taxpayer subsidies, Rolnick added. The Mall of America is considered successful, and employs 11,000 people year round. But other aid packages -- such as a a state loan to Excelsior-Henderson Motorcycles and local subsidies for Block E in downtown Minneapolis -- went bust.

While the Vikings are literally the only pro football game in town, that's not true of the state's medical industry.

"Why aren't you going to do tax favors for HealthPartners, for example, or some smaller health organization. Why are you doing it just for Mayo?" Rolnick asked. "The good economic principle is to keep taxes low for all businesses, and not try to pick winners and losers."

Even Mayo itself has had mixed results.

While Mayo has established outposts in Arizona and Florida, the clinic said last year it was dropping out of plans to anchor a $200 million expansion at the Mall of America. It's also closing its existing retail operation at that mall.

State Rep. Kim Norton, DFL-Rochester, says skeptics like Rolnick have it wrong. She and other supporters say the Mayo Clinic has a long track record of success, and isn't asking for a facility to increase its revenue -- like a football stadium which will bring in more money for the Vikings' owners. She said public amenities like roads and parking and sewers will benefit everybody.

"I don't think it's a fair comparison. I would say a more fair comparison would be the Met Council or the [Iron Range Resources and Rehabilitation Board]," Norton said. "It's about public infrastructure, and the community's control over making that infrastructure work for the community, and continued business growth and development."

Norton added that Minnesota can't afford to find out if Mayo is bluffing — and let the expansion go somewhere else.

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