This will be a unique way to finance this project that will be one of the largest indoor waterparks in North America.
Published by Miguel Otarola/Star Tribune
Published date: October 2018
The city of Bloomington thinks it can build what could be the continent’s largest indoor water park next to the Mall of America, while protecting local taxpayers if it’s a financial flop.
The city and Triple Five, the mall’s ownership group, have decided that a nonprofit should own the water park and borrow the money for its construction.
Documents released by the city this week offer more details about the water park, a 250,000-square-foot indoor facility that was first announced in March. It would be open to the public and cost up to $250 million, more than the $200 million proposed back then.
The city’s Port Authority will give an update to the City Council on Thursday.
“We wouldn’t be bringing this to the council and Port Authority if we thought it wasn’t going to be a success,” Port Authority Administrator Schane Rudlang said Tuesday.
The city plans to choose the nonprofit within six months, Rudlang said. Construction could start in late 2019 and the water park could open by fall of 2021, according to the project update.
The water park would be built on the parking lot directly north of the Mall of America and east of the Ikea store. A new parking structure next to the water park would replace the lost surface lot. The land, which is owned by Triple Five, would be leased by the city and subleased to the nonprofit.
The nonprofit would take on tax-exempt debt, at lower interest rates than what’s available to a for-profit company, and contract with an operator for the water park for 30 years.
The city would own the water park once the debt is paid off after those three decades, and could hire a new management company. Ticket sales would pay for the operation costs and the project’s debt. If sales are low, the city could impose new sales taxes on Mall of America customers to cover the shortfall. The city’s update says that “the biggest risk is probably the water park not meeting revenue expectations.” Rudlang said there was a “low risk” of that happening. He said the city would not raise property taxes to pay for the project.
The city could collect about $1 million annually in admission taxes at the water park, in addition to up to $400,000 a year in lodging taxes from visitors staying at surrounding hotels, the Port Authority estimated.
Many factors could keep the project from moving forward, including the costs of construction materials such as steel, labor and rising interest rates, Rudlang said.
A ‘tropical paradise’
The water park will create over 1,000 construction, design and engineering jobs, said Dan Jasper, the vice president of communications for the Mall of America, in a statement.
Once open, it would employ up to 700 people and offer a “tropical paradise throughout the year.”
The majority of the park consists of a 215,000 square-foot space for the main pool. A new rendering by DLR Group shows the park with a transparent roof and connecting to the JW Marriot hotel at the north end of the mall.
Council Member Patrick Martin, who represents the district that includes the Mall of America, called nonprofit ownership a “clever structuring model.”
Martin said he’s pleased “that it’s been a priority to make sure the Bloomington taxpayers aren’t on the hook for a project pretty much to benefit Mall of America and the surrounding community.”
Martin said it’s important that the mall consider expanding into entertainment ventures as online shopping continues to grow. He still wants to know if entry into the water park would be offered to locals at a discounted rate. Bloomington Mayor Gene Winstead said the city has talked about building a water park for more than a decade, and has now identified a model. “It looks like we found a viable solution,” Winstead said.