The Free Press, Mankato, MN

Local News

July 10, 2012

Mankato competing with 89 projects for bonding money

MANKATO — Mankato's long-sought and long-thwarted civic center expansion project will have 89 competitors for a piece of the $47.5 million in state funds set aside for construction projects around Minnesota.

Looking to provide a full-time home for the Minnesota State University men's and women's hockey team, build an auditorium and add convention space, Mankato is proposing a $31 million upgrade with the state covering $14.5 million of the cost. Attempts to win funding through the traditional legislative bonding bill have failed -- sometimes being left out of the bill, other times being eliminated by vetoes from former Gov. Tim Pawlenty.

This year, lawmakers washed their hands of the process of picking winners and losers from the long list of local projects seeking state funding. Instead, the bonding bill set up the $47.5 million pool and assigned Mark Phillips, the commissioner of the Department of Employment and Economic Development, to divvy up the money.

Tuesday afternoon's announcement by DEED showed that there will be many more losers than winners when the grants are awarded next month. The 90 applicants are seeking a total of $288.4 million -- six dollars in requests for every dollar available.

Phillips isn't particularly pleased with being handed the job that traditionally has been done by lawmakers.

ÒWe don't think it's our role," Phillips said in a conference call Tuesday afternoon. "It's been the Legislature's role -- since 1858, I think. ... It defied logic to me."

But Phillips said he and DEED staff will attempt to pick projects that carry the most economic development potential, will have a broad regional impact and have the required 50 percent local match at hand.

Mankato City Manager Pat Hentges said he believes the civic center project meets those criteria and others set by the Legislature, such as the potential to draw dollars from outside the state (the civic center attracts convention and concert spending from nearby states), to promote redevelopment (the civic center has been credited for business growth downtown) and to be shovel-ready (construction could begin this fall).

Still, Hentges recognizes the broad competition for a relatively small pot of money.

"I suspect DEEDÕs got some pretty tough choices to make," he said.

Phillips provided a few hints about how those choices would be made. More than once, he mentioned the proposed baseball park in downtown St. Paul as an example of a project with economic development potential and a regional impact.

"I'm assuming the Saints ballpark will score pretty high," he said.

That project, which would provide a new home for the St. Paul Saints, would eat up more than half of the total funding, however, and Phillips also wants to spread the money around the state.

"We'd like to have a little geographic balance in this," he said.

Phillips noted that many of the 90 applications were not submitted to the Legislature for possible inclusion in the bonding bill. Just eight -- including the Mankato project -- were among the projects recommended by Gov. Mark Dayton.

And Dayton, Phillips" boss, will have input into which projects receive funding. How much input?

"I guess as much as he wants," Phillips said, laughing.

As many as a third of the projects could fall by the wayside quickly because they didn't meet the $1 million threshold that DEED set for project applications. Other proposals involve water and sewer improvements, local streets projects, infrastructure for apartment buildings, construction of police and fire stations, a new elementary school -- projects that might struggle to score well on the economic development/job creation/regional impact goals mentioned by Phillips.

But there are plenty of high-profile submissions competing with Mankato's civic center request, projects that also made the governor's bonding proposal early this year. They include civic centers in Rochester ($25 million in state funds) and St. Cloud ($9.6 million) and the St. Paul ballpark ($27 million). There's the light-rail line to the southwestern suburbs ($14 million), renovation of Minneapolis' Nicollet Mall ($25 million), a Minneapolis sculpture garden ($750,000) and a rec center in Wadena ($4.6 million).

Other large projects include clean-up of the former ammunition plant in Arden Hills ($5.9 million), a regional sports center in Marshall ($4 million) and renovation of Duluth's Wade Stadium ($5.8 million).

Mankato's proposal has one advantage if Phillips and Dayton are looking to spread the money around. The civic center application includes a phased approach to construction, with $7.5 million in state funding resulting in as much as $18 million in work -- mostly funded with the city's local sales tax.

The initial construction would include the new auditorium and improvements to the hockey arena, including replacement of the dasher boards and ice-making equipment. Delayed until more funding becomes available would be the new locker rooms and training center for the MSU teams and the renovation of the US Bank building adjacent to the proposed auditorium.

DEED originally planned to award the grants in early August. The strong interest by communities around the state prompted a two-week extension of the application deadline, and Phillips said he expects that to push the final decision back by two weeks as well.

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