Mayo Clinic Investing $190M to Add Hotel, Clinical Space to Gonda Building in Rochester

Mayo Clinic Investing $190M to Add Hotel, Clinical Space to Gonda Building in Rochester

The Gonda Building was in dire need of space to accommodate growing patient traffic to its hometown campus, Mayo Clinic medical professionals said.

A growing need for patient rooms now and in the future at its Rochester headquarters has prompted Mayo Clinic to expand the Gonda Building at its campus to include 11 new floors—four for clinical space and seven for a premier hotel.

Which hotel operator will move into the new space was not mentioned during Mayo’s announcement on Tuesday. Instead the not-for-profit health institution plans to identify the “major hotel group” at a later date.

With development plans not yet finalized, Mayo is anticipating the project will cost $190 million and will take roughly two years to build with construction expected to start sometime between the end of next year to early 2020.

“Mayo Clinic is experiencing increased requests for care across our campuses, and meeting the current and future medical needs of our patients is our top priority,” said C. Michel Harper Jr., executive dean of practice at Mayo Clinic, in a statement. “We’re experiencing significant patient care space constraints that this collaboration with Pontiac Land allows us to reach our expansion goals earlier to ensure that we have the infrastructure in place to provide the best possible care to our patients for generations to come.”

Mayo is calling its deal with Singapore-based real estate developer Pontiac Land Group a joint venture that will include split ownership of the hotel. The health care provider is calling its Gonda Building project “the first milestone” in what it believes will become a “continuing long-term collaboration between the two organizations.”

“The collaboration will bring together two fields of complementary expertise: medical and hospitality,” said Pontiac Land chief operating officer Philip Kwee in prepared remarks. “Each partner will be able to leverage their individual expertise to enhance the patient and guest experience.”

Without Pontiac Land, Mayo Clinic anesthesiologist Terese Horlocker, who works in the Gonda Building, claims an expansion would not have happened anytime soon.

“We have explored options to accelerate the expansion of the Gonda Building,” she said in a statement. “However, without a collaborator, the expansion would not be possible for at least a decade and at a significant additional cost.”

The four-floor expansion of clinical space, in particular, is expected to provide an additional 200,000 square feet for its current patient load and what’s expected in the years to come.

A rendering of the Gonda Building post-expansion. (Photo provided by Mayo Clinic)

Expected patient traffic has been the fuel behind several recent Mayo expansion announcements—not to mention its $6 billion plan to transform Rochester into the nation’s health care capital. One of its largest efforts was detailed earlier this month: an $800 million plan to roughly double its Phoenix, Arizona campus, as well as add a five-story medical building and parking garage to its Jacksonville, Florida operations.

Likewise, at its Austin branch in southern Minnesota, Mayo is spending $11.2 million to add a third floor to its Family Birth Center and create a two-story connective link between the hospital and main clinic entrance.

The larger share, if not the entirety, of the construction of these projects won’t be overseen by Dr. John Noseworthy, who has been Mayo’s president and CEO since 2009. Earlier in the year, Noseworthy announced he would retire at the end of 2018 and last month his successor was named: Dr. Gianrico Farrugia, a native of the island Malta who has spent his last 30 years at Mayo Clinic, most recently as its vice president and the CEO of its Florida operations.