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DNR park plan would borrow from lottery

Minnesota's Department of Natural Resources wants to buy park land in northeastern Minnesota -- and other land around the state -- with state lottery revenue.

Natural Resources Commissioner Mark Holsten on Tuesday released a proposal calling for borrowing $97.5 million, to be repaid over 22 years with money used to buy lottery tickets. Some lottery proceeds are earmarked for natural resources projects, but never have been used to repay loans like the DNR proposes.

A legislator-citizens' commission and the full Legislature would have to approve the concept.

If approved, the plan would remove $60 million the DNR already has requested to buy land from the regular public works bill, which is funded by tax money, and use lottery proceeds to replay the loans instead.

The state has asked U.S. Steel to sell 2,500 acres of land on Lake Vermilion. The company had planned to use it for a housing development.

Gov. Tim Pawlenty proposed the new park in July, but U.S. Steel and the state have yet to negotiate a sales price, Holsten said. There has been talk that the land would sell for $40 million.

Holsten said any development costs would come on top of the sale price, and would be funded by loans repaid by tax money.

Stiff legislative opposition is expected.

Sen. Keith Langseth, chairman of a committee that deals with public works projects, opposes Holsten's idea on two counts.

First, he said: "The lottery proceeds would (otherwise) be going for other things."

Also, the Glyndon Democrat added, once a new park is approved, the state needs to pay for on-going operations.

"When we are under-funding what we have got, should we be adding to that?" Langseth asked.

A leading Republican lawmaker on outdoors issues said he has several problems with the DNR's proposal.

Sen. Dennis Frederickson of New Ulm said he is concerned about paying off the borrowed funds with lottery proceeds, which already support many natural resources initiatives.

Frederickson said he would prefer using cash to fund a new state park. But the veteran lawmaker also said he is not ready to support the Lake Vermilion park project.

"I could be convinced that it's a good thing to do, but I want some commitment for new funding for the rest of the state park system," he said.

Many lawmakers question the proposal.

"I'm sure there's going to be a lot of questions," Frederickson said.

Holsten said Pawlenty ordered him to come up with an innovative way to fund projects, and a governor's spokesman said Pawlenty supports the proposal.

Tuesday was the deadline for organizations to suggest how the Legislative-Citizen Commission on Minnesota Resources divide up the lottery-funded Environment Trust Fund. The commission makes recommendations to the full Legislature.

Holsten said he realizes the plan will have plenty of opponents. However, with the Minneapolis bridge collapse and southeast Minnesota flooding, he said, competition for loan repayment funding could squeeze out DNR land purchases.

Besides the Vermilion site, the $97.5 million would buy land across the state for wildlife management areas, natural areas, state forests, trails and other parks lands.

(State Capitol Bureau reporter Scott Wente contributed to this story.)

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.