ROCHESTER — Mayo Clinic is seeking city support with
plans to issue $750 million of bonds in April.
The Rochester City Council will be asked Monday to approve the issuance of general obligation revenue bonds for work tied to Mayo Clinic’s $5 billion
“Bold. Forward. Unbound. in Rochester”
expansion plan.
The city’s issuance bonds allow the healthcare provider to borrow tax-exempt funds for the project, but it does not place financial obligations on the city.
“These private entities cannot issue their own tax-exempt debt to finance their projects; rather, such tax-exempt debt must be issued by state or local government entities, like
Rochester,” Jenny Boulton, the city’s bond counsel, wrote in a memo sent to the City Council ahead of Monday’s meeting. “Conduit bonds allow a municipality to achieve a public purpose. In this case, by assisting in the financing for improvements to healthcare facilities.”
The bonds will be sold to buyers with the intent to accrue up to $750 million in funds that will be paid back in the designated period for the bonds.
While the city acts as the conduit for the sale, it has no obligation to make the related payments on the debt accrued by Mayo Clinic.
The bond documents will require Mayo Clinic to make payments directly to buyers, and buyers will have no right to compel the city to pay for the bonds. The sale also will not impact the city’s credit rating or debt limit.
It’s not the first time Mayo Clinic has sought city support for financing projects.
The city has assisted the Mayo Clinic with similar conduit financing at least 12 times since 2000 in amounts ranging from $50 million to $500 million, for a total of approximately $3 billion, according to
a report prepared by Rochester Finance Director Brian Anderson.
The most recent City Council support for Mayo Clinic bonds was for
up to $500 million in early 2025,
as the “Bold. Forward. Unbound.” effort was getting underway.
Before the City Council is asked to approve the issuance of new bonds on Monday, it will hold a public hearing during its 6 p.m. meeting in council chambers of the city-county Government Center. The hearing is intended to receive comments related to the request.
Upcoming meetings
Meetings scheduled to be held during the week of March 16 include:
Rochester
• Police Civil Service Commission, 3 p.m. Thursday in room 164 of the Development Services and Infrastructure Center, 4001 West River Parkway NW.
• City Council, 6 p.m. Monday in council chambers of the city-county Government Center, 151 Fourth St. SE. The meeting will livestream on the city’s YouTube channel, and be available on Spectrum cable channel 180 or 188.
• Police Policy Oversight Commission, 3:30 p.m. Tuesday in room 164B of the Development Services and Infrastructure Center.
• Library Board, 4:30 p.m. Wednesday in the auditorium of the Rochester Public Library, 101 Second St. SE.
Olmsted County
• Physical Development Committee, 1 p.m. Tuesday in conference room 1 of the Government Center.
• Health, Housing and Human Services Committee, 2:30 p.m. Tuesday in conference room 2 of the Government Center.
• Administrative Committee, 4 p.m. Tuesday in conference room 1 of the Government Center.
• Board of County Commissioners, 6 p.m. Tuesday in the board chambers of the Government Center.
Rochester Public Schools
• School Board, 5:30 p.m. Tuesday in the boardroom of the Edison Building, 615 Seventh St. SW.
Randy Petersen joined the Post Bulletin in 2014 and became the local government reporter in 2017. An Elkton native, he’s worked for a variety of Midwest papers as reporter, photographer and editor since graduating from Winona State University in 1996. Readers can reach Randy at 507-285-7709 or rpetersen@postbulletin.com.