The ripple effect of Mayo Clinic's Unbound project will be 'massive' for local contractors

Jul. 27—ROCHESTER — While major waves of construction have changed downtown Rochester in recent years, none can compare to the tsunami of the coming Mayo Clinic's $5 billion "Bold. Forward. Unbound. in Rochester" project.

Starting in August, Mayo Clinic will be starting work to redevelop 19 acres of downtown, demolish major structures and build five new buildings including one labeled as the "Hospital of the Future."

The timeline for this massive project, described as the largest single development in Minnesota's history, is for it to be completed by 2030.

"To steal a quote from Ross Perot, there's going to be a giant sucking sound of work into Rochester ... workers, materials and all of that stuff," said Rochester Area Builders Association Executive Director Patrick Sexton. "I think there's just going to be a tremendous amount of positive swirl in Southeast Minnesota. ... The ripple effects are going to be massive."

If the $1 billion US Bank stadium project in Minneapolis caused ripples throughout the state, Unbound is a boulder about to splash into a pond. All of Rochester and the region will be in the "splash zone."

However, local building professionals, tradespeople and every business related to the construction industry have front-row seats. While the Unbound construction will be managed by the Providence, Rhode Island-based Gilbane Building Co., Mayo Clinic has committed to working with area firms as subcontractors.

"Mayo Clinic is in close and frequent collaboration with building trade representatives and members of the local building industry to identify strategic, local solutions for upcoming labor and contractor needs," wrote Mayo Clinic Communications Manager Kristy Jacobson. "Thanks to these valuable relationships, we anticipate a significant portion of those needs can be met locally and look forward to the opportunity to continue to support our region's workforce and industry."

There are many estimates about how many tradespeople will be needed to work on this project, with some guessing that 2,000 overall workers will be needed. Others say the need for just ironworkers will be 1,800. Of course, several other projects that would be significant on their own are also in the pipeline for Rochester.

Mayo Clinic estimates that labor demands for "Bold. Forward. Unbound. in Rochester" construction will likely peak in late 2027 or early 2028.

"As we prepare for this demand, Mayo Clinic will continue to work closely with local trade groups and firms to ensure a strategic approach to sourcing the skilled labor that will help bring the vision for Mayo Clinic's downtown campus to life," wrote Jacobson.

The only historic comparison to the probable surge in new workers to the area is when IBM made plans in 1956 to build its facility in Rochester. IBM estimated that it would hire 1,000 employees in 1957 and 1,000 more in 1958. In that time period, that translated to a need for 1,200 houses to be built.

The bottom line is that local construction crews, like Rochester's family-owned Benike Construction, will have plenty of work before them in the coming Unbound years. Benike President Mike Benike said his firm plans to use the strategy that has worked for them for 87 years.

"It has been the advice, given over generations, to prioritize our existing customers," Benike said. "Part of our strategic plan is communicating with the whole team that we aren't interested in becoming the biggest general contractor, but we do intend to be the best."

In an industry that is always looking ahead and planning for the next job, he said the best thing that his firm can do now is to create an attractive work environment to retain and attract employees.

"The dynamics around competition for labor ... for talent ... for people has always been difficult. With Unbound on the horizon, that is ramping up," said Benike.

Custom Alarm, a 56-year-old Rochester company, is also monitoring the situation and trying to anticipate the Unbound ripples in the local construction market.

"From our standpoint with regards to our work with Mayo Clinic, we are just looking at what that looks like from a potential staffing standpoint. We've already ramped up over the last several years post-COVID. ... We'll add people and technology as needed," said CEO Melissa Brinkman.

The company had 48 employees in 1998. It grew to 70 by 2022. Custom Alarm currently employs 75 people.

As far as direct Unbound work, Brinkman anticipates much of that impact will happen sooner than later in the six-year construction timeline. She describes Custom Alarm's role with alarm and video systems as providing "parts and smarts" in conjunction with electricians.

Construction of more homes, apartment complexes and businesses will also bring more business for Custom Alarm. Having her staff undergo certification training during the slow days of the pandemic means that Custom Alarm is better equipped for growth. It takes about two years for an employee to be fully certified for fire alarm work.

Brinkman also built a 5,000-square-foot warehouse addition onto Custom Alarm's 14,000-square-foot headquarters in 2022. That positions the company well for storing more technology for clients plus installation equipment.

While local businesses see gearing up for the boom as positive, some critics see a difficult six years ahead as Unbound causes more labor issues, drives up construction costs and causes extended traffic delays.

While he acknowledges there will be big challenges, particularly in the competition for employees and construction closures of Second Street, Sexton dismisses critical comments about Unbound.

"Who doesn't want $5 billion which should hopefully turn into $10 billion, right in their community? I don't want to be Duluth. I'd rather have these 'challenges' than their challenges," he said.

Sexton pointed out that Unbound is not just an economic boost to Rochester and the state. He believes the benefits of this project are much more than just financial.

"A lot of folks think of the positives in terms of our bars and restaurants are full and we're gonna sell more houses, but I also think about what does this do for mankind," he said. "We are at three and a half million visitors a year. What if that turns into 7 million visitors a year? ... That's three and a half million more people that have hope. And I think that's not something to be trifled with."