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Hennepin County’s Southwest LRT funding plan will mean less money for environmental cleanup

The plan calls for $5 million to be shifted from the county’s Environmental Response Fund to cover part of its share of the light rail extension project.

Left to right: Chair Jan Callison, Marion Greene, Peter McLaughlin, Vice Chair Linda Higgins during Tuesday's board meeting.
MinnPost photo by Peter Callaghan

Anyone who has succumbed to the lure of a pledge drive knows the temptation: the six-CD set; the tote bag; the nearly intact 16-mile light rail extension project. 

But after the back-slapping comes the reality, the day when the bill arrives — when the check must be written. That’s what Hennepin County Commissioners were facing Tuesday on Southwest LRT, the week after representatives of local governments along the project’s route passed the hat to complete funding for the plan.

In voting unanimously to commit $8 million from two county accounts, county commissioners faced some criticism, along with the realization that paying for their pledge on light rail has consequences. Shifting $5 million from an environmental cleanup fund into the project, for example, will mean some cleanups won’t happen over the next four years.

The other $3 million being pledged is from the Hennepin County Community Works fund, a move that will reduce money available for future economic development projects in the county.

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But it was the commitment to take $1.25 million a year from the Environmental Response Fund that took up most of the attention Tuesday. About $2 million flows into the fund each year. It’s used to help public and private applicants clean up polluted sites and get them back into productive use. The money comes from the Hennepin County mortgage registry and a deed tax that was authorized by the Legislature in 1997. Since then, 337 projects have received a total of $47 million.

Among the grants approved Tuesday, for example, was $200,000 for a construction project in St. Louis Park that uncovered contaminated soils on land slated for 150 apartments plus retail and medical offices. Another $118,000 will help Lennar Multifamily Communities clean up the former Superior Plating site in Northeast Minneapolis and build a pair of apartment buildings.

Not all applications are granted. And in a letter to commissioners, a developer who has benefited from the cleanup grants said more will be unfunded in the future if the commission approves the shift. The fund, “is especially important for redeveloping urban sites in Minneapolis” wrote Curt Gunsbury of Solhem Companies. “While I have used ERF for only one project to date (Solhaus, $13M project near TCF stadium), many of the other projects that have occurred in the North Loop, Downtown, and at the U of M could not have been completed without ERF.”

In response to concerns about the fund, Commissioner Linda Higgins said Tuesday, “we are not taking all of the environmental response fund money for southwest light rail. We are taking SOME for four years.” Commissioner Peter McLaughlin said it is “absolutely appropriate” to use the fund to help cover environmental remediation bills along the light rail line.

“That fund was created to clean up dirty dirt,” he said. “They found $30 million in additional dirty dirt costs on this project. Devoting these funds in helping solve that problem is appropriate.”

Commission Chair Jan Callison said the issue before the commission Tuesday was “much smaller that the whole project — this question of using the environmental response fund to move the project forward. But I do want to reaffirm the importance of this project to Hennepin County and the reason why we’ve all worked so hard on it. We keep resurrecting it when it seems the final last rites were in order.”

The $5 million shift, along with a promised $3 million from the community works fund, completes Hennepin County’s pledge to raise $25 million to help close a funding gap caused by ballooning project costs. Wednesday, the Metropolitan Council is expected to approve a plan to cut $250 million from the project scope. In addition, thanks to some budgetary machinations and the $25 million raised in civic hat-passing (from the county and five of the six cities on the line), along with $55 million in additional federal matching dollars those actions will attract — the project is expected to fall back within budgetary range.

Other cities along the line — St. Louis Park, Edina, Hopkins, Minnetonka and Eden Prairie — are in the process of finding and approving money to fulfill $10 million in pledges their elected officials made at the project’s corridor management committee last week. Only Minneapolis has refused to offer any money from local sources.

Half the money for the project, now set at $1.744 billion, is to come from the federal government, provided it wins approval from the Federal Transportation Administration by the end of 2016.