By Heather J. Carlson
Post-Bulletin, Rochester MN 

The public-private funding of the interchange serving the Elk Run development in Pine Island is being touted as a model for future transportation projects.

Gov. Tim Pawlenty on Monday announced an initiative to boost these types of partnerships statewide.

The $36 million interchange would serve the 2,325-acre Elk Run development, which is slated to include a Biobusiness Park, commercial space and residential homes. To get the interchange built, Elk Run developers donated an estimated $13 million in right-of-way for the project.

Pawlenty said that in the past, Minnesota has been hesitant to ask private businesses to help pay for infrastructure that would benefit them. But the Republican governor said that needs to change.

"Now we're much more aggressively and proactively looking for areas of improvement that would benefit existing or future commercial or private interest and then asking those interests to join us," Pawlenty said.

Pawlenty also proposed spending $3 million to $5 million in greater Minnesota for safety upgrades and looking at other metro freeways where the MnPASS high-occupancy toll lane network could be set up.

A leveraged approach

Pine Island City Administrator Abraham Algadi said it makes sense for the state to use these public/private partnerships to help pay for costly improvements. In the past, he said, the government would spend taxpayer dollars on large projects, and businesses would move to the area to take advantage of the upgrade.

"That model frankly is somewhat unaffordable anymore from a government standpoint because we don't have money lying around. So the investment we make has to leverage more than what it has traditionally leveraged," Algadi said.

But some question whether Pawlenty's proposal will hurt efforts to get road upgrades in rural areas with limited economic development. J.D. Burton, a spokesman with the U.S. Hwy 14 Partnership, said his organization is frustrated that residents have been waiting decades for the roadway to be upgraded from a two- to four-lane road from North Mankato to Dodge Center. Over the next 20 years, the state transportation department still does not have the funding needed to finish the project. The stretch from Dodge Center to Owatonna is slated to cost $151 million.

"If the governor is suggesting now we need to have a multi-billion company to support us and that is the only way we are going to get our projects done, then I think that is unwise for the future of transportation in our state," Burton said.

Interchange on the fast track

Before the Elk Run project, the Minnesota Department of Transportation had no funding set aside for the interchange, making it unlikely it would be built in the near future. But the project got fast-tracked thanks to the Elk Run proposal by Tower Investments and Burrill & Co and the developers' willingness to donate land for the interchange. Algadi said the state is looking for a return on its investment. It is negotiating an agreement with the developers to guarantee that at least 182 jobs would be created within the Biobusiness Park over the next few years.

MnDOT spokeswoman Kristine Hernandez said the public/private partnership could potentially be used to build a new interchange at 65th Street Northwest and U.S. 52. The city of Rochester has long been pushing for that interchange to move ahead. But Hernandez said MnDOT is awaiting the completion of a study of the interchange, which will not be done until mid-2010.

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