DMCC board approves $500,000 for boutique hotel project

The funding will support a $17.3M renovation of the former Olmsted County Bank and Trust building in downtown Rochester.

Published on Feb. 5, 2026

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The Destination Medical Center Corporation (DMCC) board unanimously approved a $500,000 grant through the Downtown Property Preservation Program to support a $17.3 million renovation project that will transform the former Olmsted County Bank and Trust building in downtown Rochester into a boutique hotel and cafe. The project, proposed by Rochester-based Capital Ventures LLC, will restore the building's exterior while adding two additional stories.

Why it matters

The project is the first in Rochester's newly adopted downtown historic district to seek the maximum award allowed under the Downtown Property Preservation Program, which was created in 2024 to help fund restoration and qualified renovations to historic buildings. The boutique hotel concept will also fulfill an important niche in Rochester's downtown that currently lacks such an offering.

The details

The $5 million Downtown Property Preservation Program can cover up to 50% of eligible expenses for restoration and qualified renovations to buildings contributing to the historic district, with a cap of $500,000 per building. The work being funded for the Olmsted County Bank and Trust building project is focused on restoring the existing building's exterior, which is an acceptable use under the program's new guidelines that limit the potential use of DMC funds for adaptive reuse projects that would generate new revenue for the property owner.

  • The DMCC board approved the grant on Thursday, February 5, 2026.
  • The project was first proposed in 2021 and received Rochester City Council permission to move forward with potential revisions.
  • A larger project proposal that would have involved changes to two other historic buildings failed to receive City Council approval last year, leading the developers to return to the original expansion plan for the Olmsted County Bank and Trust building.

The players

Destination Medical Center Corporation (DMCC)

The state-created corporation that oversees the Destination Medical Center initiative, a $5.6 billion public-private partnership to transform Rochester, Minnesota into a global destination for health care.

Capital Ventures LLC

The Rochester-based developer proposing the $17.3 million renovation project to transform the former Olmsted County Bank and Trust building into a boutique hotel and cafe.

Brooke Carlson

The DMC Economic Development Agency's director of public experience for strategic infrastructure.

Cindy Steinhauser

The Rochester Deputy City Administrator.

Pamela Wheelock

The DMCC Chairwoman.

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What they’re saying

“It is a really exciting opportunity for our downtown. We do not have something like a boutique hotel, so it would fulfill an important niche, and this building is sitting vacant and we have already invested in it.”

— Brooke Carlson, DMC Economic Development Agency's director of public experience for strategic infrastructure (postbulletin.com)

“In the agreement between the developer and the city, there are a whole number of safeguards throughout the project to ensure inspections and our requirements are being met.”

— Brooke Carlson, DMC Economic Development Agency's director of public experience for strategic infrastructure (postbulletin.com)

“I expect the DMC funding to be held until the developer can show that full financing for the $17.3 million project is secure.”

— Pamela Wheelock, DMCC Chairwoman (postbulletin.com)

What’s next

The project can now move forward with staff review of the process after receiving Rochester City Council permission in 2021. The DMCC will hold the $500,000 in funding until the developer can demonstrate that the full $17.3 million in financing for the project is secured.

The takeaway

This project highlights the Destination Medical Center initiative's commitment to preserving and revitalizing historic buildings in downtown Rochester as part of its broader efforts to transform the city into a global destination for healthcare. The boutique hotel concept also represents an important new offering that will help meet evolving consumer demands and enhance Rochester's downtown appeal.