Mall of America has splashy plans for water park upgrade; nonprofit financing proposed
BLOOMINGTON, Minn. - Plans for a large water park attached to the Mall of America have been updated for a special meeting Thursday at which the Bloomington Port Authority and City Council will discuss the project.
Dubbed the South Loop Water Park, it would cover more than 250,000 square feet and be one of the largest in North America. A hotel would also be built as part of the project. The water park would be open to the public and not just hotel guests.
Pending any unforeseen splashes, construction could begin as soon as 2019 and wrap up as quickly as 2021, according to documents outlining an agreement between Bloomington and the mall’s developers.
The city would sign a 50-year lease with Triple 5 — the Mall of America’s owner that owns the land the park would be built on.
The idea of a water park has been talked about since at least 2004. An earlier version of the current plan was presented to the Bloomington City Council in March.
In a statement, Bloomington Mayor Gene Winstead said: “The city is looking forward to reviewing with the port authority new ownership and financing models for the proposed waterpark attached to MOA. I believe we have found a model for the project that both brings this exciting project to our city and protects the city financially.”
In March, the park was expected to cost between $150 and $200 million — now it is between $230 million and $250 million, according to city documents.
The park would be located at the large surface parking lot east of the IKEA store.
Originally the park was going to be owned by the city, but financing costs raised concerns. Now the idea is to have a nonprofit own the water park to gain access to lower interest rates for construction loans and an exemption from property taxes. The city would own the park after the debt used to pay for the construction is paid off, the city documents say.
While a nonprofit would own the park, its development would be led by the Port Authority and Triple 5.
Under the new nonprofit model the park is expected to be able to support itself with revenues from ticket sales and admission. However, if that does not work “sales and use taxes would be enacted at MOA to pay for any shortfalls.”
The city says no Bloomington residents’ property taxes would be at risk for the project.
To make up for the lost parking space, the city would use between $45 and $55 million in tax-increment financing to build a new parking ramp.
In the city’s report it cites a changing retail environment that requires the Mall of America to think of nonretail based ways to generate new traffic. It said with the growing popularity of online shopping it is becoming increasingly difficult for brick and mortar malls to stay afloat.
The mall’s current entertainment and tourism features have been great assets for the mall, the report said.
The West Edmonton Mall in Canada, also owned by Triple 5 and what the Mall of America is loosely modeled after, is home to a more than 200,000-square-foot water park that attracts more than a half-million people every year. That success has fueled much of the talk of such a park in Minnesota.
Keeping the Mall of America alive and competitive is “important to the reputation of the City as well as directly impacting the amount the City needs to levy in property taxes to operate,” the report said. The mall makes up about 10 percent of Bloomington’s tax base.