As Rochester builds Destination Medical Center, some businesses say they're falling off the map
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When Joy Loera opened Uni Uni Bubble Tea in 2023 it seemed like the perfect location — smack dab on Rochester’s busy Second Street corridor and right across the street from Mayo Clinic’s St. Mary’s hospital.
But three years later her storefront is all but hidden by trucks, cranes, concrete barricades and a chain link fence. The road is getting torn up and rebuilt for a new bus rapid transit line, which will have a fleet of buses run up and down it every few minutes in a loop.
It’s a signature component of Rochester’s 20-year, $5.6 billion dollar “Destination Medical Center” redevelopment project aimed at remaking the city to accommodate booming population growth and make it more attractive to patients, their families, and other visitors who come to Mayo Clinic from all over the world.
“It’s really, really bad,” Loera said. “When we signed the lease, we had no idea this [would] be going on. You have to work double or triple of your usual work time [to make less money.] But if you don’t work that hard, you get nothing.”
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Cars cannot drive past her entrance. There’s a parking lot in the back, but you’d have to follow a confusing maze of detour signs to find it.
Loera said it’s been like this for a year, and she’s expecting at least another year of the same. The bus rapid transit line is scheduled to open August 2027.
The construction is taking a toll on many businesses. Loera isn’t the only one losing business. Two of Loera’s neighbors on Second Street recently closed their restaurants, and a third business announced it will close later this year, citing lost business due to the ongoing construction. And many of the remaining shops and restaurants say they are just barely hanging on.
“Each day, it feels like I’m waiting to hear about the next business that’s going to close,” said Will Forsman, who owns Cafe Steam, a small chain of coffee shops in downtown Rochester.
What Rochester is experiencing is not unique. Yingling Fan, an urban and regional planning professor at the University of Minnesota said she sees the same disruptions happening in the Twin Cities metropolitan area.
While big transportation infrastructure projects are typically worth it in the long run from an economic development perspective, Fan said that in the short-term, the construction can negatively impact business revenue. And some businesses have proven to be especially vulnerable, like small businesses with only one location and restaurants.
“The impact is not universal,” Fan said. “And it has an equity implication because typically the smaller business owners tend to be racial, ethnic minorities. If the city has a goal in terms of making sure the business community is diverse enough, it's really important to pay attention to the needs of the smaller businesses.”
‘No end in sight’
In late August, Jamphem “Pen” Seeley announced on social media that she was closing her restaurant, Thai-riffic, effective immediately:
“After two long years of navigating construction challenges and roadblocks, we have made the heartbreaking decision to close our front door permanently,” she wrote. “The detours and construction have made it increasingly hard for you to find us, and we deeply appreciate your unwavering support through it all.”
The brew pub Thesis Beer Project said in its closure announcement earlier that month that construction had cost it about 50 percent of its revenue. Tinn’s Grilled Philly Steak Subs, closed its Second Street Rochester shop and relocated to Northfield in March due to “construction challenges.”
Cindy Steinhauser, deputy city administrator for Rochester, said the city is trying its best to communicate frequently with businesses impacted by the construction.
She explained that the city maintains an interactive map on its website with construction timelines, it sends out a regular newsletter with updates on the bus rapid transit line, the city holds weekly virtual meetings that businesses can join to ask questions, and it has set up signage all over downtown to help people find businesses that might be hidden amid all of the construction.
“Our small businesses are the [lifeblood] of our community and our country,” Steinhauser said. “We want to try and support them to the best extent possible in the way that is most relevant for them.”
Will Forsman of Cafe Steam said, for him, the communication has been uneven at times, and he claims the city’s interactive website with the construction timelines isn’t always accurate.
“We were kind of blindsided by the construction itself,” Forsman said. “We were [given] assurances that construction was done for that segment of Second Street, only to have it resume like a month after we opened our location there.”
Forsman opened his newest location on Second Street in March. After a brief honeymoon period ended, he began to see an immediate downturn, with 30 to 40 percent fewer customers coming in than they had initially.
“People are just having a difficult time getting here,” said Forsman, whose location is blocked on the east and west by the construction. “And it feels like there’s really no end in sight as far as we can see.”
Wine Wednesdays, discounted coffees, and pop ups
In the meantime, some of the businesses on Second Street in Rochester are trying to make do by getting creative.
Spyhouse Coffee Roasters, another coffee shop along Second Street, has been suffering from construction since March 2025. It’s not only coping with the bus transit project — it’s also right across the street from Mayo Clinic’s massive hospital expansion.
Gil Paz, Spyhouse’s cafe manager, said the coffee shop has lost 30 percent of its business year over year. This location is a franchise and not a part of the Spyhouse chain of coffee shops in the Twin Cities, so it can’t rely on the other locations to stay afloat.
Paz said he knew he had to make changes, and fast.
Sometimes, the shop hosts live music or board game nights. They’ve tried hosting workshops on watercolor painting, cupcake decorating, and coffee tastings. Wine Wednesdays have become popular.
“We’re seeing 16 to 20 people show up,” Paz said. “They’re [crocheting] on the side or they’re working on puzzles over there. It’s just been really cool to see that community gathering space exists here.”
Paz said that these events have helped Spyhouse survive, but it’s still struggling.
“We know that at the end of [the construction,] it's going to be great, and we're going to be super thankful to have what is coming for the community,” Paz said. “It's just in the meantime, how do we navigate, adapt, and adjust to get us to the end of it?
Spyhouse’s neighbors are taking other approaches to make ends meet. While Thai-riffic no longer serves customers in its restaurant, it’s staying open as a catering business. Uni Uni, the bubble tea shop, has been doing pop ups across southeast Minnesota.
And Cafe Steam did a month-long partnership with Mayo Clinic, where hospital staff could get discounted coffees and Mayo Clinic footed the bill. Forsman said the incentive helped his daily sales a lot.
Moving forward
The University of Minnesota’s Fan explained that before big construction projects disrupt small businesses, it’s important for developers and the city to find ways to support those vulnerable shops and restaurants.
For example, she notes that back in 2011, when the light rail transit system was under construction across the Twin Cities, the cities of St. Paul and Minneapolis offered impacted small retail businesses and restaurants the ability to apply for $20,000, interest-free, forgivable loans to help them get through the downturn.
Paz of Spyhouse in Rochester said even if Mayo Clinic or the city was more intentional about ordering catered lunches or renting meeting spaces from businesses on Second St., that would be helpful.
“We're not asking for a handout, but we're your neighbors,” Paz said. “We're gonna help you if you need someone to help you mow your lawn, and we hope that you help us rake the leaves.”
Special thanks to Danger Boat Productions and the Minnesota Humanities Center for their Sketches of Minnesota events around the state that helped inform this report.
