Southwest LRT sidelined projects in Minneapolis and Maple Plain

  1. Listen Reporter Curtis Gilbert talks with MPR News’ Tom Crann

A $2 million state grant to the Southwest light rail project came at the expense of downtown development in Maple Plain and athletic facilities at Minneapolis Public Schools, according to documents released this week by the Minnesota Department of Employment and Economic Development.

The documents show DEED recommended funding the Minneapolis and Maple Plain projects through its 2012 Capital Projects Grant program, but Gov. Mark Dayton axed them to keep light rail planning on track.

The two projects were listed as “recommended for funding” on numerous documents until two days before Dayton announced the grant winners on Sept. 13, 2012.

This chart, attached to a DEED e-mail sent at 12:45 p.m. on Sept. 11, 2012, includes recommended funding amounts for the Minneapolis and Maple Plain projects.

But at 4:35 p.m. on Sept. 11, DEED Senior Loan Officer Emily Johnson wrote to two colleagues:

Fellas,

I spoke with [Gov. Dayton's Police Aide] Erin Campbell 10 mins ago and per her request, updated the matrix to reflect changes.

On the attached document, “Metropolitan Council” was included — and the Minneapolis and Maple Plain projects were gone.

The then-Republican controlled Legislature created the experimental grant fund as part of its 2012 bonding bill, in an effort to depoliticize the process of distributing state funds to local projects. While Dayton, a Democrat, agreed to the program, he was critical of it and vowed to make the final decision on which projects to fund.

Met Council staff argued federal funding for the light rail project — which now carries a price tag of at least $1.5 billion — would have been placed in jeopardy without the $2 million show of support from the state.

Dayton made clear at the time he overruled DEED’s recommendations when he chose to give Southwest a slice of the grant money. But he never mentioned the two projects he eliminated as a result of that decision.

Minneapolis Public Schools asked for almost $2.8 million from the $47.5 million fund. It planned to use the money pay for improvements at three athletics facilities on the city’s north side: Artificial turf at Patrick Henry High School, an updated the swimming pool at Olson Junior High and renovations to Victory Memorial Ice Arena.

The district is in the process of remodeling the pool using its own funds, but the other two facilities have not been updated.

“We have a long list of deferred maintenance,” district lobbyist Jim Grathwol said. “But at the end of the day, it’s great to be king. The governor’s the governor and gets to make decisions. And, actually, it’s a legitimate decision.”

Maple Plain, a western Twin Cities suburb, asked DEED for a little less than $1 million to help finance development on a downtown block that currently includes its City Hall, a gas station and some vacant land. The proposal included a health care facility and retail space. The city predicted it would create 44 new jobs.

A sketch of the proposed redevelopment from Maple Plain’s application to DEED.

“The hard pill to swallow is those funds would have really catalyzed major redevelopment project in the community,” said Jason Ziemer, who was city administrator at the time.

That development deal has since fallen apart, but the city still wants to redevelop the site, city staffer Maggie McCallum said. Maple Plain has received a $900,000 grant for the project. Ironically, that money came from the Met Council.

The Maple Plain project received the third-highest ranking among metro-area applicants to the grant program. The Minneapolis Public Schools ranked second behind the new ballpark St. Paul is building for the minor league Saints baseball team. The stadium and the light rail line were the only metro area projects to receive funding from the program.

“Given the high volume of applications, and only $47.5 million in available funding, it was inevitable that a number of quality projects would not be selected for funding,” DEED spokesman Blake Chaffee said.

On Tuesday, Minnesota Public Radio News gained access to more than 2,000 pages of e-mails and internal other documents related to the Capital Projects Grants program. MPR News first requested the information from DEED more than 16 months ago.

Dayton’s relationship with the Southwest light rail project remains complicated. For the second year in a row, he declined to include it in his proposed bonding bill.

He’d like to see a metro-wide sales tax hike to pay for it. Otherwise, he’s argued, such projects come at the expense of development elsewhere in the state.