Mall of America shops for a subsidy
Fifteen years after opening, the Mall of America remains one of the regions top destinations, drawing 40 million visitors a year. But it's no longer the nation's largest mall, and the Mall wants to regain that title.
Maureen Bausch, the mall's vice president for business development, told state lawmakers the expansion is needed to keep the mall and Minnesota ahead of competing states.
"We know our competitors are right on our heals," Bausch said. "There are many projects close to us in different parts of the country, and they're after travelers that come to Minnesota right now. They covet our tourists. That's why keeping Mall of America fresh and exciting has always been our number-one priority."
Bausch says the $1.7 billion expansion includes a water park, two hotels, an event center, ice skating rink and a retail addition anchored by a Bass Pro store. Officials from the mall and the city of Bloomington are asking the state to pay for a new parking ramp, estimated to cost $181 million.
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"I think we've got a gem here in Bloomington, said Sen. Geoff Michel, R-Edina. "And we've got an ownership that wants to do more. And if someone wants to bring nearly $2 billion of investment to Minnesota, I think the state should be at the table."
Supporters say the mall expansion will create thousands of jobs, increase tourism and and boost income and sales tax revenue. But the legislation would also extend Bloomington's property tax exemption for the mall. The city's contribution to the first phase of the mall will reach $158 million by 2015. The contribution for the second phase will be $136 million more.
Sen. Dan Larson, DFL-Bloomington, says he supports the project but opposes the city's tab.
"Bloomington taxpayers stuck their neck out and continue to, and will be paying for a long time without actually receiving a full tax benefit for still a number of years," he said.
Larson says he's at odds with his own city council and mayor on the issue. He's also running counter to the chairman of the Senate tax committee, who's carrying the legislation.
"A lot of people visit the mall. A lot of people when they have friends or family in the state take some time to visit it. It's our state's largest tourist attraction. And I'd like to see the investment made in Minnesota rather than in some other state or some other country," said Sen. Tom Bakk, DFL-Cook, says expanding the Mall of America is good for Minnesota.
Bakk says Gov. Pawlenty's support could be critical to the success of the project. The governor's spokesman Brian McClung would not make a commitment either way, saying the legislation is a work in progress. He says the governor supports the idea of a mall expansion and is interested in finding a reasonable way for the state to assist the project.
But the mall's biggest challenge could come from a powerful legislator who also represents the mall's home town.
Rep. Ann Lenczewski, DFL-Bloomington, chairs the House Taxes Committee. Lenczewski says she's no fan of corporate subsidies.
"I'm just skeptical of these proposals in general, whether it's Bloomington or any other city," she said. "In general, the money I think is better spent on providing tax benefits to all Minnesota businesses, whether it's better roads, higher education, better infrastructure. I don't think we should target public resources to help an individual company."
Lenczewski says she will reluctantly hear the bill in her committee, sometime after the Legislature's break for Passover and Easter.
