Carlson, city make steam plant offer

by Lynne Kozarek

Governor Arne Carlson and Minneapolis Mayor Sharon Sayles Belton offered $17 million in a Wednesday meeting to move the University’s Southeast Steam Plant away from the Mississippi River.
The new offer is in addition to the $6 million that could be granted to the University if the Pogemiller bill passes through the Legislature. But the University Board of Regents says the deal might not be enough.
In a letter to Regent Michael O’Keefe on Thursday, the governor’s legal counsel expressed Carlson’s eagerness to move the plant off the river. The governor has offered $15 million to pay for the University’s steam plant-related costs and to cover costs the University has incurred since January 1. That money would come sometime in 1998 from the state’s annual bonding bill. The additional $2 million would come from the city of Minneapolis.
Brian Dietz, Carlson’s press secretary, said the governor hopes the University accepts Carlson’s offer.
“It is a very generous offer on the governor’s behalf,” Dietz said.
“This money would not have to be paid back, and the University has not yet responded.”
The debate to move the plant from the river goes back to Jan. 1, which was the University’s deadline for the city to fund the move of the plant. University officials originally said $6 million was necessary to keep the plant off the river. However, the University did not receive the funding and began refurbishing the existing plant after Jan. 1.
Since then, regents have explained moving the plant would cost an additional $5 million to $8 million in accumulated costs, such as removal of hazardous materials.
Thomas Reagan, chairman of the University Board of Regents, said he appreciates the governor’s interest in the matter and realizes he has the best interest of the University at heart, but said the offer is flawed.
“I’m not saying we reject anything,” Reagan said, “and it’s not just the money, but frankly, $17 million doesn’t cover the costs we’ve incurred.”
Reagan said before the deadline passed, the city agreed to provide $6.5 million and clear the land for a new site. The deal also would have provided a permit to build on the land with the blessing of the surrounding neighborhood. The city was not able to provide those provisions for the University.
“Now the problem is they’re not only short with the money, but they don’t have the land permitted or cleared,” Reagan said. “Whatever figures we’ve incurred will continue to add up. The last time we had to get permits it took three years. Now add those figures up.”
Kathleen O’Brien, a city coordinator in the mayor’s office, said the University and the city have discussed the steam plant for six years, but ultimately the decision to move the plant will be up to University officials.
“The University has said it will cost more to move the plant than to renovate it,” O’Brien said. “The governor is putting forward this money to purchase, clean up and help defray costs.” However, the University has the option of continuing its current renovations, she said.
Ultimately, the only thing standing in the way of the current steam plant renovation is pending legislation that would make operating on its existing site illegal.
Sen. Steve Morse, DFL-Minn., said the environment and agriculture bill, with an amendment to prohibit the University from working on the current site, is in the Senate conference committee.
“It is up in the air as to whether or not the bill will pass,” Morse said. “I haven’t heard from (University President Nils) Hasselmo or any of the regents yet (since the Wednesday meeting), but they seem to be willing to examine if there is a way to move the plant off-river.”
Rep. Phyllis Kahn, DFL-Minneapolis, offered her own warning Thursday to the board.
“If the Regents make the decision to thumb their noses at the governor when he has taken a strong stance on this, it would be irresponsible,” Kahn said. “To deliberately set out on a collision course is not a good idea.
“We don’t want to leave this poison well for the new University president.”