ROCHESTER, MN-In cities large and small, hospitals and health systems are quite often an important cog in the local economy and a source of good-paying jobs. Nowhere, however, might a provider's local impact be more prevalent than here, in Rochester, where the renowned 148-year-old Mayo Clinic touches just about everything and everyone. In this southeastern Minnesota city of just more than 107,000 residents, Mayo employs about 34,000 people in 15 million square feet of facilities.

Statistics from the Rochester Convention & Visitors Bureau indicate the city has evolved into quite a domestic and international medical destination, as about 1.6 million people visit the city annually for a visit -- or a family member's visit -- to Mayo.

Yet Rochester's transformation into a global medical destination has taken place somewhat accidentally over the years, coinciding with the clinic's rising global reputation. Some say the city lacks enough “world-class” hotels, restaurants and shopping destinations to meet the desires of global visitors and to continue competing with other medical destinations. Those include the Cleveland Clinic, Johns Hopkins Medical Center in Baltimore and the MD Anderson Cancer Center in Houston.

As Mayo contemplates a $3.5 billion expansion plan for its facilities in Rochester, it is calling on the State of Minnesota to help transform Rochester into a more “cosmopolitan” city and global medical destination as well. To do so, Mayo and civic leaders have formed an organization called Destination Medical Center and have asked the Minnesota Legislature to pump about $500 million into the city's infrastructure to pay for more parking, a better transportation system, land acquisitions, and some cleanup of building sites.

Mayo isn't seeking government money upfront, as it is calling on the legislature to approve a special taxing district around Mayo that would generate about $30 million a year. The funding is expected to be a catalyst for a major redevelopment of the city's downtown, which straddles Mayo's facilities. The state's investment, officials say, combined with Mayo's, would likely spur about $2 billion in additional private spending on new commercial projects and ventures. In all, about $6 billion would be pumped into projects at Mayo and throughout city.

For state lawmakers, deciding on Mayo's proposal is akin to considering funding for a new professional sports stadium: turn it down and risk losing the team, in this case Mayo. At a news conference in recent weeks, Mayo President and CEO John Noseworthy indicated as much, noting that if the legislature fails to approve a funding plan, “then we'll have to rethink where we go. Lots of places would love to have the Mayo Clinic set up there.” Clinic officials say the first choice is to expand in Rochester. However, if the state doesn't play along, the clinic might look elsewhere, including cities where it currently operates satellites: Phoenix and Jacksonville, FL.

John Mugford is the Editor of Healthcare Real Estate Insights, the nation's first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.