Applications pile up for state economic development funds

People in dozens of Minnesota cities and towns are wondering if they'll win state grants for projects from civic centers and sewers, to a ballpark and light rail.

State officials are now weighing which projects should benefit from a special economic development fund. They announced Tuesday that they received 90 applications. The only problem is that the requests total $288 million — or six-times larger than the pool of funds.

Mark Phillips has the unenviable task of going through the 90 applications to determine which deserve a share of the $47.5 million. As commissioner of the Minnesota Department of Employment and Economic Development, Phillips is the point person. He and his staff will study the details of each project to choose which of those will create the most jobs, have a regional or statewide impact and can begin construction quickly.

But don't think Phillips is happy about the task given to him by the Legislature.

"We're going to be in the same position that the Legislature is in. They get a couple of billion dollars worth of applications and the typical bonding bill is what, $500 million?" Phillips said. "There's a lot of winners and losers in that thing and that's what is going to happen here."

In May, the Republican-controlled Legislature passed a public works bonding bill that created the economic development fund. At the time, lawmakers said that fund would help take the politics out of the bonding bill process. It was a rare move because lawmakers typically like to tout the projects they've approved as they head into an election. Establishing the fund also shifts the lobbying from the Legislature to Gov. Mark Dayton's administration. Commissioner Phillips said he will consult with Dayton on the requests and hopes to announce the winners in late August.

The applications vary in size and scope. The smallest project comes from the city of Braham — $222,000 for sewer and water infrastructure.

St. Paul sent the largest request, asking $27 million to help fund a new ballpark for the St. Paul Saints. The ballpark plan will help revitalize a portion of downtown St. Paul, Mayor Chris Coleman said.

"It's kind of a classic bonding project that has been a priority of the city for several years," Coleman said. "It's a priority of the governor. He put it in his bonding bill and I think if you look at the impact that this project is going to have for the region, I think it sells itself."

Phillips expects the Saints stadium to do well in their assessment because it would have a regional impact. He said projects focused on roads or that have requested less than $1 million will be received less favorably.

Gary Neumann, assistant city administrator for Rochester, hopes their $25 million request for a Mayo Civic Center expansion receives funding. But he says the sheer volume of requests makes it difficult to predict which ones will win out.

"The funding is so limited for quite a lot of good projects that I don't think anybody has a good handle of whether they'll be successful or not."

St. Cloud and Mankato also want funds to improve their civic centers. The Metropolitan Council is asking for $14 million to start developing the Southwest Light Rail Transit Line.

The applications prompt several lawmakers to call for another bonding bill next year. Typically, the Legislature handles the budget in odd-numbered years and the bonding bill in even-numbered years. But Rep. Alice Hausman, DFL-St. Paul, said there is need for a large bonding bill when lawmakers return in January.

"The opportunity is there. The need is there in both the short-term and the long-term," Hausman said. "As we always have known, infrastructure is one piece of what the government can do to stimulate the economy."

But GOP Senate Majority Leader Dave Senjem disagrees. Senjem, who chairs the committee that drafted the bonding bill, said the number of requests to tap the economic development fund doesn't sway him.

"The appetite is always there. If you serve the appetite, the appetite will only increase," Senjem said. "I don't think we should necessarily be driven by what the requests are."

Because the requests come from every corner of the state, the bonding bill could be an election issue. Every seat in the Legislature is on the ballot this November.

(MPR's Jon Collins contributed to this report)

Here's the complete list of requests. Use the tools to enlarge the view:

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