New ice arena for St. Paul?

St. Paul city officials want to build a new ice arena downtown, and they think they’ve identified a funding source: $33 million the city owes to the state.

Sponsored by Rep. Tim Mahoney (DFL-St. Paul), HF1263 would forgive the bulk of a $48 million loan St. Paul took out in 1998 to help build the Xcel Energy Center. The city would divert the money to finance the Pond — a proposed 120,000-square foot, three-level ice arena across the street from the Xcel.

Mayor Chris Coleman said St. Paul is looking to expand its downtown event district, which has become a regional attraction. He said the Pond project would be good for the state’s economy as well as the city.

“It creates jobs, it’s shovel ready, and it’s good for our economic future,” Coleman said.

Mahoney said the request is fair, given the unusual arrangement that was made to pay for the Xcel. He said that while the state often provides direct aid for other cities’ projects in the form of bonding dollars, it made St. Paul take out a loan instead.

“There’s always a need for more ice time in the state of hockey,” Mahoney added.

While supporters see the project as a stimulus, Rep. Keith Downey (R-Edina) characterized it as a “bailout package.”

“The city of St. Paul should honor their loan. It was a good deal. No one forced them to come into it in the first place,” Downey said. He suggested the city submit a bonding request to the Legislature, if it is serious about funding the Pond.

The House Higher Education and Workforce Development Finance and Policy Division laid the bill over March 12 for possible inclusion in its omnibus finance bill.

Sen. Richard Cohen (DFL-St. Paul) sponsors the companion, SF1115, which awaits action by the Senate Economic Development and Housing Budget Division.