Taxpayers take a bath on water park deal

If boosters of Bloomington would like a motto for their city, recent news suggests an obvious choice: "Land of Endless Handouts."

Putting up public money for private gain. Bloomington is at it again.

The city has approved $105 million in taxpayer dollars for the 320,000-square-foot splashy new attraction next to the Mall of America: a water park, with pool and surrounding amenities, that would be the largest in the nation. Big, big, big!

The financial bet would be just as outsized. The project is expected to cost $422 million. Well, that's the projected cost now. An earlier estimate was $57 million less. But, hey, who's counting? Apparently, not most of the leaders of Bloomington government, who've already poured hundreds of millions of tax dollars into the mall since the early 1990s. Somehow, taxpayers are told all that "investment" has been a success.

Maybe so. But how come the mall's Canadian owners still had an outstanding mortgage of $1.4 billion at the start of last year — almost three decades since the shopping/food/entertainment/subsidy magnet opened?

Add another couple hundred million in private debt for a water park? Why not?

"There is no doubt in my mind this is going to be a roaring success," Mayor Tim Busse told the Star Tribune recently.

Well, maybe Busse is the kind of guy who doesn't mind risk. But what else would you call a public bet of another $100 million or so to expand a business in a distressed industry? Shopping malls are not the brightest stars of capitalism in the age of Amazon, COVID and choked supply chains.

One other detail: Water park entrance fees of $45 for Bloomington residents and $60 for everyone else may not be considered "popular prices."

Did we mention that another water park — Great Wolf Lodge, across the highway from the mall — charges $30 for a half day and $40 for a day pass?

Every member of the Bloomington City Council approved the deal. But two Port Authority commissioners, Rob Lunz and Cynthia Hunt, didn't buy the developer's pitch that water parks routinely are hits.

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

It seems Lunz and Hunt have allies in their wariness of risk. Port Authority administrator Schane Rudlang told the Star Tribune the water park would come up dry without fresh Bloomington taxpayer subsidies.

Let's see: Without taxpayer money, the mall's water park will be too risky for private investors. Does that sound like a show of confidence in the concept?

The mayor doesn't sound so faint of heart. Busse awaits a "rousing success."

Assume he's right. Then why would such a splendid water park need public money?

Sink or swim, one way or another, the deal could take on water. The plan also raises questions, too often ignored, on how public money could be better spent.

Public money is better spent on education, hospitals, roads and bridges, among many enterprises that benefit all, not just the relative few who have the wherewithal to spend hundreds for a day at an artificial beach.

True, every patron visiting the future mall water park creates jobs for lifeguards, pool cleaners and bartenders. But what about the customers drawn away from the Wolf Lodge water park across the street? Seems those jobs, such as they are, will be in peril.

Whether or not they ever go swimming at a new mall watering hole, Bloomington taxpayers are about to be soaked.

Art Rolnick is associate economist, University of Minnesota, and former director of research at the Federal Reserve Bank of Minneapolis. Mike Meyers is a retired economics writer for the Star Tribune.