Fiscal Rarity

In 2007, the mall tried but failed to finance its expansion by exempting the existing mall and the expansion from the fiscal disparities pool. That effort stirred opposition from the Citizens League, a St. Paul–based public policy group, and the Minnesota Chapter of the National Association of Industrial and Office Properties (NAIOP), a trade association for developers and owners of commercial real estate. They teamed up to produce a slick brochure that talked up the law, and distributed 25,000 copies of it to elected officials, policymakers, and business leaders throughout the state.

This year, both sides clashed at a five-and-a-half-hour hearing that Lenczewski convened in April.

MOA Makes Its Case

Leaders from the AFL-CIO, 11 trade unions, the Associated General Contractors of Minnesota, and minority and women’s contracting associations backed the proposal for MOA exemption. So did Bloomington’s mayor. Workers, polite but concerned about job losses, filled the hearing room.

Mall attorney Bill Griffith and Tony Armlin, a mall consultant, argued that 17 percent of the $2.1 billion mall project would be “public infrastructure” that had to come from public financing. About $200 million of the public’s $366 million share would go for an 8,000-vehicle parking ramp. Taxes to be generated by the expansion justified public support, they argued. Griffith cited studies showing that the mall is by far Minnesota’s biggest tourist attraction, drawing 40 million visitors annually, with a third of them coming from more than 150 miles away.

“Just like Disney is to Central Florida, the Mall of America is to Minnesota,” said Maureen Bausch, a spokeswoman for the mall.

Widespread Tax Impact

Lenczewski’s most powerful argument seemed to come from tax research studies. House researcher Steve Hinze testified that exempting the Mall of America from the fiscal disparities pool would mean slightly higher taxes for all property taxpayers across the state. All property taxes in the metro area would rise a little bit because new tax revenue would be needed to offset the revenue lost if the mall was exempted. Property taxpayers beyond the metro area would see their taxes edge up because the lower tax base in the metro area would steer more of the state’s finite local government aid to the metro area.

Sam Grabarski, president of the Minneapolis Downtown Council, an organization that promotes downtown’s businesses and amenities, was blunt. Downtown retailers, whose customers must pay for parking, would be subsidizing their rivals by helping to finance free parking at the Mall of America.

Exempting the mall from the fiscal disparities pool “is really objectionable to a vast majority of the business community,” Grabarski said. Representatives from the Minnesota Business Partnership, a nonprofit that works to keep the state’s economy competitive, the Minnesota and TwinWest Chambers of Commerce, and NAIOP agreed with him.