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DMC Special Report: Regional impact

The Destination Medical Center is on pace to change downtown Rochester in a number of unique ways, and these future changes have a large impact on what will happen to areas outside of the downtown core.

Large-scale growth of our city means a number of things for our surrounding neighborhoods, communities and cities. Already, we are seeing what was once farmland developed into shopping centers; empty lots turned into housing complexes; and abandoned warehouses reinvented into booming small businesses.

Over the next 20 years, DMC is expected to add between 35,000 and 45,000 jobs to Rochester. With such a large number of new workers comes the need to create new infrastructure, housing and entertainment options.

Photo: Rochester 1985-90 / Image courtesy History Center of Olmsted County

Affordable housing

“In 15 years, we will need 10,000 units of affordable housing,” said city councilman Michael Wocjik. "Without it, a lot of jobs will go unfilled.”

Under DMC, local leaders will focus on creating a robust workforce of high-skilled workers from across the globe. Even so, community leaders told us that many of the workers coming to Rochester will be priced out of market-rate homes.

“If you do not have the capacity to house the people that do the everyday jobs of your community — from the grocery store [clerk], to the ER nurse, to the teacher — you will see your community suffer,” said council member Nick Campion. “We need to figure out how to make housing affordable for everyone."

The Rochester Area Foundation is one organization that is working to assist in the development of affordable housing. Steve Borchardt, the development officers for RAF, said many of the jobs that will be created in Rochester — from nurse's aids to maintenance workers — will be making less than 80 percent of the area's median income, or about $50,000 annually.

"These are the people that will have the most trouble finding affordable homes if they choose to reside in Rochester," said Borchardt.


Those employees who make 80 percent AMI or less once DMC moves forward are qualified for RAF’s First Homes program. The foundation has been advocating in finding a solution for affordable housing through this program by helping to provide housing to people who cannot afford market price homes.

The program helps reduce the price of buying a home by $30,000 to $40,000 by purchasing the land with community land trusts. First Homes has more than 200 properties in Rochester and other surrounding towns.

The foundation is now putting in effort to raise $19 million to address affordable housing in Rochester. It is also partnering with Olmsted County to help levy a property tax to help increase funds to be put towards affordable housing.

According to a recent survey, 54 percent of Rochester residents believe there are enough housing options available, while 43 percent disagree.

Workforce development

“We already have a labor core shortage, and it’s anticipated to get worse," said Sheila Kiscaden, of the Olmsted County Board of Commissioners.

According to her, the shortage is partially due to the lack of young people coming to southeast Minnesota, as well as the retirement of the Baby Boomers.

“Nursing homes in Rochester and Stewartville have closed wings due to not having enough staff,” explained Kiscaden. “The best way for us to succeed is to work as a region to recruit, to retain, and to train our workforce.”

Population growth in Rochester (by decade)

Source: Rochester-Olmsted Council of Governments (*projected)

Kiscaden is co-chair of the SE MN Together initiative, which has been hosting roundtable discussions with city officials, business owners and educators to discuss solutions to the workforce shortage of southeastern Minnesota.

An estimated 45,000-person labor shortage is expected for the region by the end of DMC, including a deficit of 20,000 workers just in Olmsted County. SE MN Together hopes to find a way to market southeast Minnesota as a whole in order to solve the workforce shortage.

“We need to promote to the world that we are a great place to live and work,” said Kiscaden. “We need some kind of brand to represent all of us.”

"The focus is to find out what assets we have that we can use to promote ourselves as a regional brand," she said, noting that we are not just about health care. In order to attract young talent, “we need to be more diverse for our future.”

Surrounding communities

In regards to Rochester’s smaller surrounding communities, Rochester City Council President Randy Staver said, “Don’t be so quick to change.”

Although some of these communities may feel compelled to change to some degree in response to the DMC, Staver said these communities, such as Lanesboro, “already contribute value to the life experience for the people in this region” and “have a certain identity and charm to them.”

Other cities closer by, like Pine Island, are anticipating significant growth over the next couple decades. To ease the transition, communities are already beginning to update their existing infrastructure. 

"A high percent of our population works in Rochester, and we expect to pick up our share of workers with the DMC expansion," said Pine Island Mayor Rod Steele.

He said Pine Island's small-town lifestyle, coupled with the fact that it is 15 minutes closer to the Twin Cities, will make it an attractive place to live for those who move to the region to work in Rochester.

“The DMC can do nothing but help Pine Island," he said.

Attracting and retaining talent

“We need to become a community of options," said city council member Nick Campion. According to him, we need a reason for young, excelling adults to work and reside in Rochester.

Yes, the bar scene in Rochester has grown in popularity, but Campion believes that more still needs to be done. As the youngest member of the council, he feels that these people want to be able to engage in the community, whether that be through recreational activities or different types of entertainment.

“It is a part of the DMC plan to include these engagement pieces,” he said, pointing out that Rochester is already a very livable community. "We’ve already been successful, so we can look to the past to some degree for what the blueprint should be for the future.”

Photo: Thursdays on First & 3rd / The Med City Beat

Patrick Seeb, director of economic development and placemaking for the DMC Economic Development Agency, said the key will be building off signature events like Thursdays on First & 3rd to create a more vibrant downtown.

"What we have learned in that people who live here leave on weekends and they spend their money elsewhere," said Seeb. "So, we haven't even made the city fully realize itself as a destination for local residents."

Alex McKay is a student at the University of Minnesota Rochester. He wants to pursue a career in prosthetics.   

DMC Special Report: Downtown business