Mall of America seeks tax subsidies to expand in Bloomington

03/27/2008

By Bill Salisbury
Pioneer Press
03/26/2008


The Mall of America returned to the state Capitol on Wednesday to revive a request for tax subsidies it contends it needs to more than double the size of the sprawling Bloomington shopping complex.

Mall officials and a parade of building-trades union leaders urged the Senate Taxes Committee to provide tax breaks to trigger $1.8 billion in private investment in the second phase of the retail and entertainment center. They said the project would generate 7,000 construction jobs, another 7,000 permanent jobs and $80 million a year in tax revenue.

With double-digit unemployment in the construction trades, "our union needs this to happen," Kyle Makarios, of a carpenters union, told the committee.

The panel didn't act on the request, but Taxes Committee Chairman Tom Bakk, DFL-Cook, said he plans to offer a revised mall-subsidy proposal today and will try to tack it onto the major tax bill for this session. Last year, the Senate included Bakk's measure in a tax-increase bill that Gov. Tim Pawlenty vetoed.

In 2007, Bakk asked the state to borrow $181 million through the sale of bonds to pay for an 8,000-car parking ramp at the mall. He said he has dropped that controversial proposal this year.

Instead, Bakk is negotiating to authorize Bloomington to impose sales, food and beverage taxes to help pay for roads, bridges, utilities and parking at the mall. He also would authorize the use of tax-increment financing, which devotes the additional property taxes a development generates to pay up-front construction costs. And Bakk was considering a proposal to exempt the new part of the mall from the metro area's fiscal disparities tax-sharing program, under which cities with large industries subsidize cities without.

Bill Griffith, the mall's attorney, told the committee there would be "no state dollars" in the latest request. "It's a user-financed package," he said.