Bloomington officials OK tax subsidy for water park near Mall of America

A long-anticipated water park next to the Mall of America is closer to reality following Bloomington's approval of a significant tax subsidy for the $422 million project.

The Bloomington City Council and Port Authority on Wednesday night jointly voted to create a tax-increment financing (TIF) district that would generate $105 million for development of the 320,000-square-foot water park by MOA owner Triple Five.

A portion of the TIF funds, $9.5 million, would go toward a down payment for 31 adjacent acres to host the 2027 World Expo, also known as the World's Fair, if Bloomington is selected for the event. President Joe Biden authorized the city last July in its bid to host the Expo in the United States, which hasn't happened since 1984.

The Mall of America is not involved with the Expo bid, said Port Authority Administrator Schane Rudlang. But Triple Five agreed to use the increased tax revenue generated by the water park project to secure the land temporarily.

The attraction would feature the largest indoor pool hall and longest indoor beach front for a water park in North America, Rudlang said. Admission would cost $60, with a discount of about 25% for Bloomington residents.

Before the COVID-19 pandemic, the water park carried a price tag of about $260 million in private costs. But pandemic-related delays, labor shortages and materials problems sparked a 22% increase in private costs, now put at $317 million, Rudlang said.

The pandemic "certainly slowed the project down," he said.

With TIF approved, financial closings and groundbreaking are expected this summer. The water park is slated to open in 2024 after two years of construction.

The water park would be built north of the mall and to the east of Ikea. A 1,600-stall parking ramp would go on the site with space for a hotel and future commercial expansion, Rudlang said.

Kurt Hagen, Triple Five's senior vice president, told the Port Authority and City Council how "exceptionally good" the water park would be for the Mall of America in striking a balance between retail and entertainment. But the benefits would go beyond the mall, he said.

"How good this would be for the hospitality industry in Bloomington and the region, how good it would be for the state of Minnesota because of how it strengthens and grows tourism, how it grows economic activity, how it creates new jobs," he said.

"And perhaps most importantly ... how important this project is for Bloomington and its residents by strengthening and growing its tax base" while protecting the city's biggest tax generator and its largest industry, hospitality, he said.

Triple Five has been interested in building the water park since the 1980s. Hagen said that Triple Five plans to build in sustainability standards to make it the first LEED-certified water park. "We want to set the bar for water parks," he said.

Hagen said Triple Five used new and improved technology at the DreamWorks Water Park in East Rutherford, N.J., which he said was more efficient than World Waterpark, a 30-year-old facility at Triple Five's West Edmonton Mall in Edmonton, Alberta.

Over the past four years, the Bloomington Port Authority and City Council hosted a dozen joint meetings to discuss financing for the water park project. At one point, developers were going to pursue a unique and complex nonprofit model to finance, build and own the water park.

But after lawmakers passed legislation last year making TIF more flexible to spur development and create jobs, Triple Five worked with Bloomington city staffers on that financing approach. The temporary TIF ruling that allows the transfer of tax-increment funds for specific purposes is similar to 2010 legislation that expanded the use of TIF to stimulate economic recovery after the recession.

Rudlang said the project would not move forward if not for TIF. While Wednesday's vote is significant, he said, no project is certain until the financing closes, which is two to six months away. That's when interest rates and material and labor costs come into play.

The City Council voted unanimously for the TIF subsidy, and Commissioners Rob Lunz and Cynthia Hunt were the only dissenters on the Port Authority. Lunz said he hopes it works as well as Triple Five's other water parks, but expressed doubts because Minnesota has many more lakes than the other water park sites.

"We're different because we have 11,842 lakes with water amenities all over the place," he said.

But Mayor Tim Busse said the water park will move the Twin Cities forward. "There is no doubt in my mind this is going to be a roaring success," he said.