STAR Gazing

Critics say St. Paul's STAR program is being mismanaged

A little more than a year ago, state Sen. Richard Cohen asked for a sit-down with representatives from the St. Paul mayor's office, including Tim Marx, then Norm Coleman's chief of staff. The topic of conversation was what Cohen saw as the Coleman administration's mismanagement of a city-wide redevelopment fund. The mayor's appointees, he complained, didn't represent all the neighborhoods, but instead were predisposed to favor projects proposed by City Hall insiders and deep-pocketed downtown developers.

In 1993, the St. Paul Civic Center was badly in need of revamping. The half-cent sales tax created by the state Legislature to pay for the remodeling and expansion generated more money than the city needed to overhaul the arena. So in 1994, St. Paul's City Council created the Neighborhood Sales Tax Revitalization (STAR) program to deliver the remaining 60 percent of the city's new sales tax to St. Paul neighborhoods. Businesses, individuals, and organizations were encouraged to apply for loans and grants to further residential, cultural, and economic development throughout the city.

But after two funding cycles (the grants and loans are reviewed annually), Cohen was concerned about complaints he was hearing from his constituents. Many of them believed STAR's board--appointed by the mayor and approved by the City Council--was giving short shrift to applications submitted by nonprofits, especially arts organizations. When Cohen aired his concerns in the December 1996 meeting with city officials, Marx and company defended STAR, copping to a few logistical glitches but maintaining that the program's spirit was intact.

After two more meetings with the City Hall delegation, Cohen, who had threatened to take his concerns to colleagues in the Legislature, agreed to a wait-and-see cease-fire. The truce was short-lived.

In 1997 the STAR program approved a $1.1 million loan to construct a municipal parking ramp for Lawson Software in downtown St. Paul. Cohen saw it as a purely political move, designed to help Mayor Coleman ink a suspect business deal. To his way of thinking, tapping STAR funds to woo Lawson across the river contradicted the '93 tax statute's purpose. To add insult to injury, the money used for the now-controversial Lawson deal was taken from the STAR program's cultural fund: a 10 percent slice of the pie cooked up for buildings and projects designed to further cultural activities in St. Paul.

"I left those meetings believing the [cultural] money would be available for nonprofits and only carefully for for-profit ventures," Cohen said outside of Minnesota Senate chambers last week. "If I knew they were going to use the money for deals like Lawson, I would've stepped in earlier." After three cycles, STAR loaned nearly $1.15 million and gave away $1.9 million in grants from its cultural fund. Lawson's chunk was more than double the size of any other project that received support, including the Science Museum of Minnesota, the Hillcrest Rec Center Theater, and the Great Waters Outdoor Plaza.

In a letter sent from Coleman's office to Cohen on February 11, the mayor's director of intergovernmental relations, Bill Huepenbecker, says the Lawson ramp fit within the parameters of STAR's cultural program because quality urban design is essential to the vitality of downtown and, especially, the cultural district. Cohen wasn't buying: "Based on what happened last year, I have no sympathy. I was blindsided."

Two weeks ago, Cohen submitted a bill to the '98 Legislature that he says will make sure the 10 percent of STAR money set aside for cultural improvements ends up where it was meant to go. If the current wording were to become law, 80 percent of the cultural funds each year would be awarded to nonprofit arts organizations, libraries, and museums located in the cultural district of downtown St. Paul. The remaining 20 percent could be awarded to businesses within the cultural district (such as Lawson) or to nonprofit art organizations outside the area.

Not surprisingly, Cohen's DFL St. Paul colleagues in the Senate--including Ellen Anderson and Coleman's last mayoral challenger, Sandy Pappas--have entered the fray. Both have submitted amendments geared to tighten up the logistics of STAR and to ensure the half-cent sales tax gets directly to St. Paul's neighborhoods. To guarantee this, and to make sure the mayor-appointed STAR board does more than pay lip service to citizens' wishes, Pappas has submitted an amendment to Cohen's bill that would create a neighborhood review panel made up of representatives from each City Council ward. These individuals would review funding requests and make recommendations to the STAR board and City Council. Pappas says she became convinced this was necessary after the Council, just three months ago, stepped outside of STAR's yearly funding cycle to approve $4 million in loans and $4.9 million in grants for projects that hadn't gone through the program's annual competitive process. In 1998, STAR's total share of the half-cent tax is expected to generate just $4.2 million.

"This is state money," Pappas says. "Some people on the City Council don't seem to understand that. I'm hoping this legislation will make that clear."

Current members of the St. Paul City Council met to discuss changes in the STAR program on February 18, and will propose further changes during a meeting March 4. At the first meeting they heard from neighborhood activists, businessmen, and volunteers such as Midway Chamber of Commerce board member Bob Wicker--individuals who worry STAR's luster has been dimmed by downtown interests and behind-the-scenes deal-making. "This is money that doesn't exist for us otherwise," Wicker says. "These other entities have other pots. Money's a temptation, and it's easy picking, especially if they do some political maneuverings and paint the neighborhood activists as crybabies. And that's just B.S. In the past, we've been patronized by city staff and in some cases by the City Council."

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