Mdewakanton Sioux may invest in Mall of America hotel

Financing for another luxury hotel at the Mall of America could come from the Shakopee Mdewakanton Sioux Community, which operates the Mystic Lake and Little Six casinos in the Twin Cities area.

"We've reached out to a number of potential partners to work on the hotel, and [the tribe] was one potential partner," said mall spokesman Dan Jasper on Friday. "But we have a number of options and opportunities."

Either way, the Bloomington megamall is set on building a second luxury hotel, the brand or "flag" of which is under negotiation, too.

The mall's planned $230 million expansion on its northern side between the main entrance and Lindau Lane includes the 330-room hotel, 150,000-square-feet of upscale retail space, an office building, a center for international visitors and event space. Despite its talks with the Sioux tribe, no casino is planned, and the entire project will be privately financed.

The tribe confirmed in a statement Friday that it "is exploring a partnership with Mall of America and Mortenson Development to finance a new luxury hotel."

Jasper said the mall will break ground for the expansion project this fall and complete it in two years.

In March, a $138 million luxury 500-room Radisson Blu hotel opened on the southern flank of the mall, ushering in a new era of expansion for the nation's biggest shopping center. The swanky 13-story structure is linked to the mall by skyway.

But Kirby Payne, president of Rhode Island-based HVS Hotel Management, said a second hotel at the mall "would definitely work, but probably at a different price point." Payne said the mall should be careful not to overbuild the luxury hotel segment.

Still, the recent addition of the Radisson Blu to the Bloomington market means the southern suburb now has in excess of 8,000 hotel rooms — serving all sorts of customers and wallet sizes. The nearby Minneapolis-St. Paul International Airport is considering building a hotel on site as well, said spokesman Patrick Hogan. "We're still in the exploration stage."

The Mdewakanton Sioux, which has had a Mystic Lake store at the Mall of America since 2001, said mall officials "approached us about the potential to work together on this project."

"We are still conducting the necessary due diligence to ensure that the investment is a good fit for our community," the tribe said. "However, it is in our market, and we believe it would help diversify our investments and further strengthen our relationship with MOA."

Said Jasper: "We've had a great relationship since 2001 with the SMSC [the Shakopee Mdewakanton Sioux Community], they've been great partners."

Hotel development by Indian tribes isn't unusual, according to Payne. The Mandan, Hidatsa & Arikara Nation is the lead investor in a hotel project planned for Bismarck, N.D. The Four Bears, N.D.-based tribe recently said it has provided $33 million in equity for the hotel, which will be on the campus of United Tribes Technical College.

Steve Alexander • 612-673-4553

Janet Moore • 612-673-7752