The Louisa Street extension project grant application failed to make the list of final projects funded by the Minnesota Department of Employment and Economic Development (DEED). This leaves Winona without state funding for a $24 million capital improvement project.
During a press conference late Thursday morning, Minnesota Governor Mark Dayton gave the final word, eliminating the extension project.
The long-sought project is not off the table yet, as city officials have planned for a potential one-half cent local sales tax to fund it.
“We’re just disappointed,” Winona City Manager Judy Bodway said. “We knew going into this process that our application was a long shot but it was an important enough project in Winona to try for it.”
The project was one of 90 capital improvement projects vying for a portion of the $47.5 million allocated by DEED.
The city submitted the application in June asking DEED for $4.7 million to help pay for roughly 50 percent of the first phase of the project, with the remainder to be funded through a bond.
The city's capital improvement plan (CIP) includes a first phase, costing $9.5 million, to extend Louisa Street along Mills Fleet Farm property to connect with Highway 61. The second phase would be the construction of a nearly $14 million railroad overpass at Louisa Street.
The Louisa Street extension project has been nearly 15 years in the making. In 2004, Eric Sorensen, then the Winona City Manager, said city officials had already been discussing the extension for nearly seven years. Sorensen said the project was labeled top priority based on congestion and safety issues in the immediate area, likely caused by the presence of three big box stores in the area.
The mega stores were built after Winona voters agreed in 1998 to pass a local sales tax so the land could be developed for what was billed as an industrial park. The $4 million project was presented as a generator of industrial businesses and high paying jobs. However, the land use was zoned in a broad category that allowed the retail development.
In 2006, the city compiled a list of 10 projects to be funded by another proposed local sales tax, with the Louisa Street extension project near the top. But that time, voters denied the sales tax request and the project was put back on the shelf.
Throughout the years, several more unsuccessful attempts had been made to secure funds. In late 2011, Winona’s CIP indicated the city would pay for the project using $10 million in local sales tax revenue, a request that had been denied once. The second phase of the project, which is to construct a $14 million railroad overpass, was also to be funded through a similar local sales tax.
Officials also predicted it could take up to 10 years to accumulate the amount of money needed to complete the project.
Without the DEED grant, Bodway said the city could be discussing the sales tax notion yet again.
“The sales tax option is just one of many,” Bodway said. “I’m not saying we’re going to do it, I’m not saying we’re not. But, this is an option that we may give a second look at during the capital improvement discussion for budgeting next year.”
According to the CIP, construction of the extension route would begin in 2014; but Bodway said without the grant, the project would be on hold for at least three more years.
“It all comes back to finding a funding source and right now we don’t have one,” Bodway said. “We will be on the lookout for other funding sources and grant opportunities in the future and we believe that this project has the potential to be completed.”