Legislator says it's 'bad timing' for $397 million update to Xcel Energy Center

[MUSIC PLAYING] NINA MOINI: It's our top story on Minnesota Now. A big ticket request to renovate some of St. Paul's largest attractions is heading to the Legislature. This afternoon, Mayor Melvin Carter and others will ask lawmakers to pay $397 million to update the Xcel Energy Center, Roy Wilkins Auditorium, and the River Center, which are all located in the same place in downtown. The request is about half of the estimated cost. Mayor Carter says renovations would have a huge economic impact. Take a listen to what he's had to say.

MELVIN CARTER: Our goal is to renovate not only the Xcel Energy Center, but the Roy Wilkins Auditorium that's right next to it, as well as the River Center that's right there, in a way that has the power, the potential to take what's currently a $383 million economic impact every year and increase that by $100 million a year.

So that's Mayor Carter speaking there. Democrat State Senator Sandy Pappas is the Chair of the Capital Investment Committee who will hear this request, and she also represents the Downtown St. Paul area. Senator Pappas, thank you for your time this afternoon.

SANDRA PAPPAS: Thank you for inviting me, Nina.

NINA MOINI: Well, so we just heard there from Mayor Carter. He's saying there is so much potential for growth here. This could be a really good move for downtown and the entire state. What stands out to you about the request for the renovations? Do you support any part of it?

SANDRA PAPPAS: Well, I have a lot of respect for the Mayor, and I know his heart is really into trying to help Downtown St. Paul.

NINA MOINI: Mm-hmm.

SANDRA PAPPAS: So I'm listening very carefully to the proposal. We're having a hearing this afternoon to discuss the use of appropriation bonds. But certainly I do have some concerns.

NINA MOINI: And what are those concerns?

SANDRA PAPPAS: Well, the Roy Wilkins Auditorium is, I believe, 100 years old, and that desperately needs renovation. But the other two facilities, the River Center and Xcel, they were just redone 25 years ago, and so it seems a little premature to be looking at a major remodel there and a renovation. And also, I have concerns because of the state budget and the limit on how much we can bond. We have, as of now, $700 million in GO bonds available for the entire state. So I really don't have the capacity in a bonding bill. That's why they're looking at appropriation bonds.

NINA MOINI: So when the ask here is for the state to fund half of, or 50%, of the project, and when I've heard Mayor Carter and others speak before about St. Paul, they say, well, you know what? The whole state and everybody uses St. Paul, so everybody really should pitch in to help particularly with Downtown St. Paul where so many people come through and near the capital where you are. What do you think about that? How much responsibility should the state have in anything like this?

SANDRA PAPPAS: I certainly understand the sentiment and the desire to have the state be a partner in this venture. It's just the timing isn't very good. The state is facing a deficit in the out-years. And the amount of the bond payment, I believe, over the biennium is something like $64 million. I just got the fiscal note within an hour ago. So we'll be looking at that in our hearing this afternoon at 3 o'clock. And hearing their proposal, and letting them make the case. But I do think that the General Fund is not going to be able to be a payment source for the bonds, the appropriation bonds.

NINA MOINI: So, Senator, what do you think would be helpful to helping to revitalize and improve the state of Downtown St. Paul? We've been reporting on our show and others that the downtown Lunds closed down or is about to close down. There's not going to be a grocery store down here. Tenants are leaving office spaces. From where you sit as a lawmaker on the state end of things, what would you like to see happen for St. Paul to help bolster the situation particularly in downtown?

SANDRA PAPPAS: I live downtown, so I live two blocks from the Lunds. So it's really devastating for the downtown area, just as a new pizza store is opening up in that corner. And Pedro Park will be opening this summer. So I'm hoping that the city is working with the private sector to bring in another grocery store. Ultimately, I think housing is going to have to save downtown because we know that commercial office space is not in high demand. We don't have a lot of Class A in Downtown St. Paul. And people are working from home. Even government employees are working hybrid partially from home. So getting more people to live downtown and converting the commercial space and the commercial buildings into housing, I think that should be the top priority.

NINA MOINI: And the Minnesota Wild, some of the downtown business leaders and councils have put their support behind this with Mayor Carter. What do you think of the argument that, well, so many people come to the Xcel Energy Center in that area. Why not put as much resources as possible into making that area more livable, walkable, enjoyable in whatever ways they're trying to do that?

SANDRA PAPPAS: There's only so much money that we have to go around, so I do think that we have to prioritize. And as I said, the arena is only 25 years old. And perhaps in another five or 10 years, we may see that that's the top need. But for now, I think the focus needs to be on housing.

NINA MOINI: OK. What are some of the other things that you're going to be watching for closely related to St. Paul this session?

SANDRA PAPPAS: Well, the Ramsey County has that vacant spot on the river, and they would like some support for River's Edge, they call it. That would be a new park on the river. And we know that development on the river has really helped St. Paul. And that would take-- it'd be a tiered park going down to the river. And they believe that would spear-- that would spur, sorry, a building on top of the bluff, a commercial building that would be a combination of commercial and housing. And I think that's worth looking at because we know that those kind of amenities would really help downtown, and right now it's really an eyesore.

NINA MOINI: Yeah. Anything else just related to the downtown area specifically?

SANDRA PAPPAS: Well, between getting more people to live there and trying to keep the businesses that we have down there, I think that's the major focus.

NINA MOINI: Mm-hmm. And how do you think retention, keeping the businesses, what do you think needs to happen to retain what's already there?

SANDRA PAPPAS: Well, certainly having activities that-- and the Xcel brings in significant activities, as does the Ordway and the Science Museum and the Children's Museum and the other amenities that we have downtown, the small theaters. All those add to the vitality of downtown and bring people to the downtown maybe for dinner before or bars afterwards. So it's a combination of things. I don't think it's only up to the Xcel.

And the Xcel will still-- and the River Center, they will continue having lots of great activities that are our statewide or regional. That will continue to happen regardless of whether we put a lot of money into remodeling this year or not.

NINA MOINI: OK. And just one last question. What is next for this proposed bill?

SANDRA PAPPAS: Well, we don't actually have a bill before us yet.

NINA MOINI: OK.

SANDRA PAPPAS: So we're really-- I think that Senator Clare Oumou Verbeten is authoring a bill. And so today, we're really just talking about the issue of appropriation bonds. And we're allowing the Mayor and the Wild to give a presentation on their whole vision of what they want to do.

NINA MOINI: OK.

SANDRA PAPPAS: But in my committee, I have-- the leadership hasn't even decided if we will be doing appropriation bonds. I just know that I don't have the capacity with GO bonds to help them.

NINA MOINI: Are you confident-- or what's your confidence level that lawmakers would pass a bonding bill this year?

SANDRA PAPPAS: Hope springs eternal. I do have a concern that I've heard from some of my Republican colleagues that they consider a bonding bill dessert. And I'm like, when you're talking about repair and replacement, and remodeling, and roofs, and windows and HVAC systems, that sounds like meat and potatoes to me. So I would like to see more of a priority placed on the bonding bill. We didn't do one last year. It's not good to skip a year. Communities throughout the state, as well as state agencies, are desperately waiting for that bill-- our bill to pass.

So I'm hoping that-- I did want to fast-track it, but because the late start in the House, I wasn't able to do that. But I'm hoping we're meeting-- the four leaders are meeting weekly and continuing to have discussions about what we want to put in a bonding bill.

NINA MOINI: All right. Well Senator, we hope you'll join us again as it becomes more clear, hopefully, where different renovations and resources will go, and we appreciate your time today.

SANDRA PAPPAS: Thank you. Thanks for having me, and I'm happy to come back.

NINA MOINI: Absolutely, thank you. That was Democratic State Senator Sandy Pappas.