The state of Minnesota is offering disappointed communities a second shot at millions of dollars for local projects.

When the Legislature borrowed $496 million for capital improvement projects this year, it left a lot of high-profile projects off its list. St. Paul didn't get the $27 million it wanted to build a new minor league ballpark for the Saints. Mankato, Rochester and St. Cloud didn't get funding for their civic centers. Regional chambers of commerce didn't get the $25 million they requested for a new Southwest light-rail corridor.

But lawmakers did offer one consolation prize: A $47.5 million pot of money turned over to the Department of Employment and Economic Development to award as it saw fit. The Republican-led Legislature essentially ceded a chunk of its bonding authority to a DFL administration as an experiment to see whether it was possible to take some of the politics out of the bonding process.

"We're going to try it," said Senate Majority Leader Dave Senjem, R-Rochester, who worked with his staff to develop the new bonding grant program. "We'll see hopefully in a couple of years whether it's a good idea."

On Thursday, DEED opened the application process for the new Business Development Through Capital Projects grant program. Grants will be awarded to the communities that can show their project will create the most jobs, attract the most out-of-state dollars and have the strongest community support.

"This is a collective punt by the Legislature," said Brad Jones, executive director of the Rochester Convention and Visitors Bureau, who hopes to have Rochester's grant application for a $25 million expansion of its Mayo Civic Center submitted to the state within the next two weeks. "It's an attempt not to get into the politics around local projects."

Nevertheless, after lobbying the Legislature unsuccessfully for years, Jones likes the Mayo Civic Center's odds of winning a share of the pie based on merits. If the project couldn't pass the Legislature in a year when the area's senator was the ranking Republican and chairman of the bonding committee, then maybe the bureaucratic route is the way to go.

"We really felt good going into the session," Jones said with a laugh. "This is probably an easier process for us; it should be more black and white. We've not had very good luck with bonding. I guess we'll try this way."

Gov. Mark Dayton was less impressed by the Legislature's experiment, which he said put the state agency in "a very, very awkward situation."

"I've never seen it done before this way, and I don't think it's well-advised and I think this will prove why it's not," Dayton told reporters last week. "It's sort of a back-door way of projects that were denied by the Legislature and now they're all descending upon DEED, and understandably so."

Communities began making their pitch for a slice of the bonding pie before DEED opened the application process. St. Paul bought land for a ballpark and informed the agency that it was as shovel-ready for a capital improvement project as it is possible to be. Five chambers of commerce sent the agency a letter to remind it how eager the business communities are to see a new light-rail line in the southwest corridor.

"I'm not going to suggest to DEED that it's an easy job," said Senjem, who struggled to walk the line between unhappy DFLers who wanted more projects in the bill and unhappy conservatives in his own party who didn't want any. Conservatives took to the floor in the House and the Senate to blast the DEED funds as a "slush fund."

But maybe, Senjem said, this new fund will create a bonding process based more on merit than on local clout. The Legislature set out an 11-point blueprint for DEED to follow as it picks and chooses among the dozens of applications it's likely to receive.

"Hopefully, they'll work within the framework of those criteria, and we'll have a system that will work," Senjem said. "And maybe longer term it will take the politics out of these local projects."

Communities will have until 4:30 p.m. June 26 to apply for the grants.

Jennifer Brooks • 651-925-5049