Bloomington to research private financing, nonprofit model for $260M water park at Mall of America

Bloomington city officials are moving ahead with steps to create a $260 million water park at the Mall of America after the coronavirus pandemic put the project on hold.

At a Wednesday night joint meeting of the City Council and Port Authority, city officials voted to update the feasibility study of a previously talked about nonprofit model for financing and completing the water park. They also gave city staff authority to research another type of funding method that would combine private financing with tax increment financing (TIF).

"This looks like it would be a worthwhile kind of thing. It would work. And I think if not for the pandemic, frankly I believe that they would be coming up out of the ground at a pretty quick rate right now," said Bloomington Mayor Tim Busse. "I do believe it's worth keeping the staff work moving forward."

Plans to build a massive indoor water park on a parking lot next to the mall have been in talks for years. The water park is designed to be the largest indoor pool structure in North America and have the longest indoor beach.

In 2018, after exploring other financing options, Bloomington city staff began looking at an unusual model in which a nonprofit entity would take on the debt to build the park and then own it. Mall of America owner, Triple Five, would then manage the water park.

The model was seen as a way for the city to face less financial risk.

In 2019, Louisiana-based Provident Resources Group was chosen to act as the nonprofit. In addition to other details, the City Council also approved the zoning and entitlements for the water park.

The City Council and Port Authority had expected to vote on the final aspects of the financing deal at the end of 2019, but some details such as how much Triple Five would be paid for its land had caused delays that persisted indefinitely when the pandemic hit in 2020.

The pandemic caused disruptions for governments at all levels, and restrictions caused Mall of America to close during the spring and then reopen with capacity restraints. MOA faced financial bumps as a result.

This past summer, traffic levels and sales at the Mall of America have begun to recover to around 80 to 85% of 2019 levels.

"It's been a difficult year for Triple Five and for Mall of America," said Kurt Hagen, senior vice president of Triple Five.

Earlier this year, as a way to spur economic development, Minnesota passed legislation that allows cities and port authorities more flexibility with how they use tax increment financing. Bloomington city officials are considering an option where a developer would finance the majority of the project, the Port Authority funds infrastructure improvements and an additional investment of about $30 million in TIF funds would be utilized.

They also considered keeping the project on hold or possibly killing it for good.

Updating the feasibility study and ground lease appraisal on the nonprofit model to factor in the pandemic is estimated to cost about $100,000 and take three months to complete.

While council members and Port Authority commissioners voiced various arguments on Wednesday on which financing model might be best for the project, many showed support that the water park would be a major attraction for the city and Mall of America.

"We need to support the mall," said City Council member Jack Baloga.