The luxury Radisson Blu is poking into the Bloomington skyline, part of a surge in hotel building in the city and Minnesota. Summary.
Once the new $137 million Radisson Blu hotel opens at the Mall of America next year, the number of hotel rooms in Bloomington will swell beyond 8,000.
The 500-room hotel is making fine progress, thanks to a warm winter that steadily kept more than 1,000 workers busy, said Troy Blizzard, a senior project manager for Mortenson Construction, an equity partner and general contractor on the project.
Should the 20-year-old mall expand further, up to two additional hotels may be in the mix, according to spokesman Dan Jasper.
Hotel development is picking up throughout Minnesota -- particularly along interstate highways, which historically have been difficult sites to buy and sell at a premium, according to a recent Northmarq Real Estate Services report. That activity will continue as the economy improves, the report states.
Bloomington is an example of that trend. With roughly 85,000 residents, the city is either home to or near Minneapolis-St. Paul International Airport, the Mall of America and at least 10 companies employing 500 people or more each. All are likely to generate hotel patrons at one time or another.
"One of the top comments I get [is], 'I wish there was a hotel attached to the mall,'" says Jasper. Equal parts shopping and tourist experience -- the nation's biggest shopping mall draws 40 million people annually, 40 percent of whom hail from out of state.
Next week, Golden Valley-based Mortenson will place the last piece of structural steel on the "upper-upscale" hotel that is part of a megamall expansion. Then, work on the 13-story structure will turn to finishing guest rooms, public spaces and a skyway connecting it to the mall. The higher-end Radisson concept, akin to W Hotels and the Westin chain, will feature a full-service spa and custom-designed rooms.
And just north of the mall, sidling up to Interstate 494, the former Thunderbird Motel (now the Ramada Inn Mall of America) is being renovated after it was sold to a Canadian concern for $14.4 million earlier this year. The buyer was AP2 Developments, which specializes in rehabbing older hotels.
"It's one of the best locations in the world for a hotel," said Joseph Paletta, vice president of the Winnipeg-based firm. He declined to say how much AP2 is investing in the Ramada, which remains open during renovation.
Keeping things fresh
Hotel expert Kirby Payne said all theses construction projects will create clear winners and losers for the Bloomington hotel market. He predicts the new Radisson concept and its connection to the mall will prove to be a novel draw. The losers will be older hotels in the area that haven't been updated regularly, said Payne, president of Rhode Island-based HVS Hotel Management.
Jen Helm, Northmarq's director of brokerage services, agrees. "The great thing about the hotel business is that hotels are always changing to keep it fresh."
Schane Rudlang, administrator of the Bloomington Port Authority, said the upscale hotel market in the city is under-penetrated. "With all the rooms we have, it wouldn't seem that way, but we looked at a lot of market research," he said.
Despite difficult financial markets in construction, Golden Valley-based Mortenson successfully partnered with Carlson Rezidor Hotel Group to pitch the Radisson Blu, a new concept. The megamall hotel is part of a $1.5 billion plan by the Minnetonka hospitality and travel company to build five luxury hotels and upgrade other properties. The Chicago Blu hotel opened last year, and a property in St. Martin has been converted to the concept, said spokesman Benjamin Gardeen.
The MOA project was funded by $40.3 million in tax-free bonds issued by the Bloomington Port Authority, plus $40 million in private-equity investment raised by Mortenson and Carlson. The bonds were created by the 2009 federal economic stimulus bill. Revenue from the hotel will pay down the bonds.
A three-level parking garage will be financed with $15 million in tax increment financing paid by the mall's property taxes.
Janet Moore • 612-673-7752