Bloomington's City Council and Port Authority voted to nearly double the amount of money available to subsidize development near the Mall of America — such as its long-planned waterpark — while opening the door to other major projects.
The move gives Bloomington the ability to spend up to $95.2 million in tax-increment financing near the mall, and lets developers know there are subsidies available for the development of facilities like a sports venue and an event center — near the area where Bloomington hopes to host a World's Fair in 2027.
Back in March, Bloomington authorized the new tax-increment financing (TIF) district around the mall, and the City Council and Port Authority voted to approve spending up to $55 million to support the hoped-for waterpark.
With a unanimous vote from the council and Port Authority on Wednesday, Bloomington added $40 million to the subsidies, raising the funds available to support development to $95.2 million — the total amount of money projected to be in the TIF account by the end of 2022.
Each subsidy would still have to be separately approved by city leaders, and the vote does not commit Bloomington to spending on any projects. The city can also choose not to spend the money.
A state law passed in 2021 lets cities and port authorities spend tax-increment financing directly on development projects in those TIF districts.
The law requires city leaders to submit a "spending plan" to the Minnesota Office of the State Auditor by Dec. 31.
The Bloomington plan's approval Wednesday set a ceiling for how much the city and Port Authority can spend. In this case, the city and Port Authority decided they want to make it possible to use all the available Mall of America TIF money — $95.2 million — to subsidize developments in the mall area.
The spending plan included a suggestion that the funding could support the water park. But city staff added other ideas to the plan, including a sports complex, entertainment venue or event center.
Some City Council members and Port Authority commissioners said they were surprised to see the new development ideas.
"I'm really struggling for clarity," said Commissioner Rob Lunz as he lobbed questions at city staff about the changed plan.
Mayor Tim Busse and Port Authority President Bob Erickson repeatedly asked council members and commissioners to focus on the increased flexibility that would be possible if Bloomington could offer more subsidies to development in the coming years, and less on the idea of a sports complex or entertainment venue or any other specific venture.
Port Authority Assistant Administrator Jason Schmidt said the new venue ideas were added after city staff considered what major developments might make sense in the area. Port Authority counsel Julie Eddington said the city would not be limited to using the money for those kinds of developments, but said the State Auditor's Office preferred to see plans with a sense of what projects might be approved. She said the city could choose to use the funds for affordable housing or other job-creating development projects, so long as the projects are in the specific geographic area of the Mall of America TIF zone.
Council Member Lona Dallessandro asked Schmidt what had changed since the spending plan was approved in March.
Schmidt said staff had been too focused on the water park, and realized only later in the year that the water park was not the only project that could benefit from the TIF subsidies.
Dallessandro also asked if it was possible that all the increase in available subsidies would go to the water park, because the project is already expected to run well over its initial budget. Busse said it was.
But, he said, the council and Port Authority would hold more public hearings and public votes before committing to any spending of the TIF funding.
Expo bid in the background
Pieces of the development zone could become part of the city's bid to host a World's Fair Expo in 2027. Bloomington represents the United States in the global competition for the mega-trade show, with four other countries vying to attract the event.
The planned expo campus has some overlap with the tax-increment financing district, said Schmidt.
Organizers of the expo bid hope the event could attract 14 million visitors to Bloomington and the Twin Cities over the three-month fair, with an economic impact of $2.5 billion.
Bloomington's bid was presented in Paris last month to the Bureau of International Expositions, the international governing body for these fairs. The bureau is expected to choose a 2027 expo host bid in June.