Mall of America nets up to $250 million in tax breaks

  • Article by: JANET MOORE , Star Tribune
  • Updated: May 22, 2013 - 12:25 PM

Legislators OK tax breaks from a controversial funding source.

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A planned $1.5 billion expansion at the Mall of America calls for the Bloomington behemoth to double its size with more stores, movie theaters, hotels, and maybe a water park.

To help ensure the project moves forward, up to $250 million in tax breaks were approved this week by the Minnesota Legislature. In recent years, the megamall’s pleas for public subsidies have failed.

This year, lawmakers supported a controversial new funding mechanism that draws from the region’s tax base to pay for the mall’s roads, water and sewer pipes, and parking that provide the project’s backbone — the sort of features that would thrill engineers more than Prada-seeking power shoppers.

“They’re not the sexy part of the building, but the infrastructure that supports it,” said Schane Rudlang, administrator of the Bloomington Port Authority, which coordinates development for the suburban city.

Mall officials declined to elaborate Tuesday on the expansion’s details, or when construction may begin. But they hope the project will attract an additional 20 million visitors to what is already the nation’s biggest shopping center and one of the state’s top tourist attractions.

“From inception, the plan was to expand Mall of America allowing for an even-grander guest experience,” the 21-year-old mall said in a statement Tuesday. “This legislation will enable Mall of America to do just that.”

This isn’t the first expansion pitched for the megamall, it’s just the biggest.

Earlier this year, a swanky $135 million, 500-room Radisson Blu hotel opened on the south side of the mall. A smaller expansion, called 1C, which includes offices, another hotel and more retail, is already in the works to hug the mall’s main entrance. And Lindau Lane, a main feeder road to the shopping center, is being rebuilt to permit a plaza-like bridge from the mall’s front door.

Without the new tax breaks, the mall could have expanded on its own, but not at the density desired by the city or its owner, Canada-based Triple Five Group, Rudlang said. Now, a series of big-box stores could populate the megamall’s northern flank, which is now an unsightly patch of surface parking that was once home to the Met Center arena. But Bloomington already has its share of that type of retail, he noted.

The $250 million for the proposed project would come from the Twin Cities Metropolitan Area Fiscal Disparities Program, a regional pool of commercial and industrial tax money that is designed to reduce the imbalance between wealthy and poorer communities.

“Bloomington is the biggest giver to the fund, and the money is redistributed to everyone else but us,” said Rep. Ann Lenczewski, DFL-Bloomington, who sponsored the Mall of America bill. Money for the expansion doesn’t come from the general fund, she said, noting Gov. Mark Dayton supports the funding mechanism.

But opponents of the idea say subsidizing a private business for the first time since the fiscal disparities program began in 1971 is a bad idea that sets a questionable public-policy precedent.

“We’re concerned that it not become a precedent of any kind,” said Bob DeBoer, project director with the Citizens League. “You’re essentially taking tax base from the pool and using it to subsidize one project. That doesn’t seem right.

“Do we really need more offices and retail?” he asked.

 

Janet Moore • 612-673-7752

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