Just as soon as the Mall of America opened on Aug. 11, 1992, it seemed as though everyone began clamoring for a second phase, according to Kurt Hagen, senior vice president of development for mall owner Triple Five Group.
But for many reasons, including the inflexibility of the financial markets in recent years, the second phase of the nation's largest shopping mall has instead come in "bite-size pieces," Hagen told members of the Bloomington, Eden Prairie, Edina and Richfield chambers of commerce at a lunch last week.
Most recently, a pedestrian bridge connecting the $135 million Radisson Blu hotel to the mall opened. And the 500-room hotel itself, which opened last March, was part of a major expansion, too.
Looking forward, reconstruction of Lindau Lane is ongoing -- the submersion of the important feeder road will pave the way for Phase 1C, as it's called. This will involve expanding the main entrance on the northern side of the mall, in a $275 million to $300 million project expected to begin next month or early January 2014.
Three levels of retail stores, topped with a luxury hotel, office space and two levels of underground parking are part of that expansion. MOA spokesman Dan Jasper says mall officials are actively leasing space for the office tower, and they're "very close" to announcing a flag for the hotel. In addition, the current third-floor food court will be demolished to make way for a higher-end European-style food hall.
Hagen said Phase 1C will be paid for by revenue generated through existing tax-increment financing dollars, plus money from Triple Five and the hotel owner.
The pricetag for future expansion is about $1.5 billion.
Phase 2 will be paid for, in part, by about $250 million in tax breaks that were approved by the state legislature last year. That will include a "recreational sporting goods anchor, additional retail and entertainment, an NHL-sized indoor ice rink, a water park resort and a dinner theater," Hagen said.
"We really couldn't do Phase 2 all in one fell swoop," Hagen explained. And it's important to offer something different in subsequent phases of mall expansion, as opposed to replicating the current mall, he added.
Interestingly, when Hagen recently Googled "biggest malls," the Bloomington behemoth came up as the 19th largest in the world on Wikipedia. "Competitors throughout the world have seen our success," he said.
Janet Moore covers commercial real estate for the Star Tribune.