Radisson plans posh hotel at megamall

The name of a new luxury hotel at the Mall of America -- the keystone in a project that became possible only recently because of federal stimulus money -- is a mystery no more.

Carlson Hotels of Minnetonka said Wednesday it will team with Mortenson Development Inc. on a $130 million development that will include a swanky Radisson Blu hotel and parking ramp.

The $115 million, 501-room hotel will anchor the south side of the Bloomington mall, between Macy's and Bloomindale's, and will be the first to be connected to the mall via skyway.

It is only the second Radisson Blu concept in the United States, part of Carlson's recently announced $1.5 billion plan to build five "upper upscale" hotels in major U.S. cities and to upgrade existing hotels.

The first Radisson Blu is expected to open in fall 2011 in Chicago's Millennium Park.

Construction of the Mall of America hotel is set to begin in December and the plan is for it to open in late 2012. The project is expected to create about 250 full-time construction jobs and about 240 hotel jobs.

The hotel is key to the mall's efforts to move forward with expansion plans that have been in the works for five years or more. At one point, officials talked about a 5.6 million-square-foot expansion.

But the Great Recession put a damper on financing, both from reluctant legislators at the State Capitol and through more traditional means, as credit for construction projects dried up. Now the mall has "broken it down into smaller, bite-sized pieces," said Kurt Hagen, senior vice president.

"I'm hopeful that this was the hardest piece ... [and that] moving forward with Phase II will only get easier," he said.

The next piece likely will be an arm of the Mayo Clinic, though plans "are still fluid," he said. The Rochester-based medical facility plans to offer diagnostic screenings, telemedicine and other services. Construction likely won't begin for another year.

The mall's expansion plans also call for a water park and a Bass Pro Shops store.

The Hennepin County Board of Commissioners voted in August to give the Bloomington Port Authority the right to issue $40.3 million in tax-free bonds to help build the then-unnamed hotel. The bonds were created by the 2009 economic stimulus bill, and revenue from the hotel will be used to repay the money.

In addition to the tax-free bonds, financing for the hotel will include another $40 million in private, taxable bonds. About $35 million will come from private equity from Carlson and Mortenson.

A three-level parking garage will be financed with $15 million in tax increment financing paid for with the mall's property taxes.

The Radisson Blu hotels will be modeled after 200 existing high-end Carlson Blu hotels around the world, as Carlson bets on a rebound in upscale travel.

The hotel complements the mall's strategy to create a luxury wing of retail shops on its south side that includes a $5 million face-lift completed this summer, Hagen said.

In addition to a restaurant, spa and fitness center, the Radisson Blu Mall of America will include more than 23,000 square feet of meeting space.

Carlson Hotels global chief operating officer Thorsten Kirschke said the mall's tourism traffic was a draw.

Mall officials claim 42 million annual visitors, including 4 million who come from abroad. About 40 percent travel from more than 150 miles away.

"Our whole strategy for rolling out Radisson Blu in the U.S. is looking at gateway destinations," Kirschke said, adding that the Twin Cities is the 16th-largest metropolitan market. "That makes it qualify ... but the Mall of America is a destination in its own right. The two in combination is the recipe here for the true upper upscale expansion."

Jackie Crosby • 612-673-7335