The Mall of America and the booming district around it are now considered "economically distressed" in the eyes of the federal government, qualifying the area for new tax breaks intended for the country's poorest neighborhoods.
The eastern corner of Bloomington is one of the state's 128 "Opportunity Zones" under a program Congress created in the 2017 tax code overhaul. The program aims to revive certain low-income areas by offering tax breaks to people who invest in them.
"Opportunity Zones have the potential to bring much needed investment to some of Minnesota's lowest-income areas to spur economic development," Shawntera Hardy, the state's commissioner of the Department of Employment and Economic Development (DEED), said when Minnesota submitted its choices among eligible census tracts to Washington last year.
The list included some of the poorest communities around the state, such as Minneapolis' Phillips area and the Red Lake Indian Reservation.
But the nation's largest mall and its "South Loop" environs — boasting five new hotels and four more on the way — also made the cut. That new status is already aiding existing and potential developments there.
The census tract was eligible largely because of lower-income people living in older apartment buildings south of the mall, including some about a mile away. Areas nearest the mall are most likely to see redevelopment, however, based on five "opportunity sites" that Hennepin County officials submitted when recommending the zone to DEED. The mall owns two of them.
"Without knowing more about the facts on the ground [in Bloomington], we can say pretty unequivocally that there are many other places in the state of Minnesota that look far more deserving," said John Lettieri, CEO of the Economic Innovation Group, the Washington, D.C.-based advocacy organization behind the Opportunity Zone idea. Lettieri said the public should examine why the decision was made and how state and local leaders will ensure it benefits the area's lower-income residents.
The program, still in its infancy, has drawn criticism as a potential driver of gentrification. And the zones themselves have attracted scrutiny around the country. Minnesota chose other zones where high-profile development is already occurring, including the areas around Mayo Clinic in Rochester and St. Paul's new soccer stadium.