Quick facts about the water park project
Triple 5 (owner of Mall of America) has been interested in developing a large indoor water park at or near Mall of America since the mall project was conceived in the 1980s. In 2018, the City Council and Port Authority started work in earnest to find a way to deliver the water park project.
Bloomington has a long history of making bold decisions. When faced with an empty Met Stadium in the late 1970s, Bloomington leaders considered their options and seized on the bold vision for that site – the grand venture that is Mall of America (MOA). It has grown and evolved even as retailing and traditional malls have faced challenges. MOA is thriving today.
Beyond MOA itself, the growth of Bloomington’s economy over the past 30 years is vindication that the bold decision was the right one. Unique amenities in and around MOA, including now the proposed water park at MOA, continue to pay dividends by attracting many new businesses, hotels, and restaurants to entertain and service our Bloomington’s large number of visitors.
Hospitality is the largest industry in Bloomington and a significant contributor to City revenues. A healthy and thriving hospitality industry significantly reduces the overall tax burden for Bloomington residents and businesses. The vitality in our South Loop District has, in fact, been essential to the City’s ability to successfully attract other businesses to diversify our economic base. Bloomington has one of the strongest economic development track records in the region. Bloomington’s strength in hospitality has been essential to the overall Twin Cities metropolitan region’s ability to attract events like the Super Bowl, the Ryder Cup, the Women’s Final Four, All Star games, and the Big Ten Women’s and Men’s Basketball Tournaments.
The proposed water park will be a regional amenity that will be visited by people from all over and bring tax dollars to the area. Nearly 32 million people go through the doors of MOA every year. The proposed water park will add to the entertainment and tourism mix for the city, which we are proud to say includes the existing Great Wolf water park (think clustered amenities like Wisconsin Dells).
How the City is reviewing the MOA water park project
- Hospitality and Mall of America have a significant impact on City revenues.
- When the hospitality industry is healthy, it offsets the expenses paid by all taxpayers in Bloomington.
- Without lodging and admissions sales taxes, the majority of which are paid by visitors, flowing to the City’s general fund, property taxes in Bloomington would be much higher.
- Robust entertainment amenities keep Bloomington and MOA a dynamic destination.
Tax Increment Financing or TIF can only be used for reinvestment in these MOA projects per state statute, and it is a portion of the property taxes that MOA currently pays (and water park would pay).
- The Minnesota Legislature has passed laws for reinvestment of MOA TIF for projects such as this and only for projects like this in the South Loop District like the water park or MOA expansion.
- The public funding being used for the water park are taxes in the form of TIF paid by MOA and reinvested into the water park project.
About TIF:
Tax increment can be collected by a city, port authority, or housing and redevelopment authority and used to reinvest additional property taxes paid by the new project back to support that new project.
- The new design of the water park project in South Loop is approximately 143,000 square feet . The water park would cost approximately $250 million. ($375M total development costs including parking infrastructure and financing costs). The water park features will include a wave pool, lazy river, children/family splash pad, 30 different slides and rides, and several pools and spas.
- The West Edmonton Mall (WEM) in Canada (which the MOA is somewhat modeled after and is also owned by Triple 5) has a 215,000 square foot integrated/attached water park that brings in more than 500,000 users annually. The WEM water park, opened in 1986, adds to the vibrancy and resiliency of that large mall. Not only does the WEM water park have slides and other rides, its large wave pool hosts evening beach-themed gatherings and surfing leagues, allowing for greater use of the venue.
- The new Mystic Cove water park would not only add a new amenity to Bloomington, but to the entire Twin Cities metropolitan region. It would also create new demand for hotel rooms. The proposed South Loop water park would be open to the public.
Prior to the pandemic, the City and Port Authority studied a nonprofit ownership and financing mode, and on March 9, 2022, the City Council and Port Authority approved moving forward with a model that is privately financed. In 2024, staff is exploring a similar privately-financed model, utilizing MOA TIF funds.
This funding concept, which uses tax increment, is similar to many other projects the City and Port have completed. The TIF investment reinvests property taxes generated by MOA.
Triple 5 (owner of MOA) was a pioneer in building large retail malls which were also diversified with entertainment and restaurants. Retail continues to change in the age of online retail, and new projects that Triple 5 is building have about a 50% non-retail component. MOA has performed much better than most brick and mortar retail developments due in part to its entertainment and tourism focus. Continuing to diversify the MOA destination with new traffic generators (e.g., attached hotels and offices, as well as more entertainment opportunities) is a top priority for Triple 5. MOA is about 70% retail today.
Triple 5 has been interested in having a water park attached to the MOA project since the original 1980s. It’s proven to be an asset to the West Edmonton Mall, helping that mall stay competitive. Triple 5 also has a water park as part of the American Dream New Jersey project (a large retail and entertainment project similar to West Edmonton Mall and Mall of America).
No. The project will be funded with TIF dollars and private equity. If the project does not perform as Triple 5 has projected, the private debt holders are responsible, not the other Bloomington taxpayers.
March 6, 2018
Staff and representatives from Triple 5, owners of Mall of America, updated the City Council and Port Authority on the status of development for future phases of MOA. The focus of that meeting was on the potential to develop and construct a large indoor water park, which would be connected to Mall of America. At that time, City, Port and Triple 5 were exploring several different ownership and financing structures for the water park, including one where the City would own and issue debt for the project, using revenues from the water park to pay for the water park’s debt payments. In the aforementioned financing model, which was not ultimately advanced, Bloomington residential property taxes would not have been at financial risk for the project. Work continued in the summer and fall of 2018 to find a financing model where the City and Port further limited their risk; this included numerous staff and developer meetings, and extensive legal analysis.
November 1, 2018
Staff presented a proposed water park financing model using a nonprofit as the borrower and owner. Triple 5 would develop the water park with the Port Authority. They would also manage the water park through a contract with the nonprofit. The Council and Port directed staff to continue studying the nonprofit model outlined.
March 6, 2018
Staff presented a further refined version of the nonprofit model, and the Council and Port directed staff to perform further due diligence and bring back a Development Services Agreement for consideration at the next concurrent meeting of the City Council and Port Authority.
April 17, 2019
Staff presented options to the Council and Port. Options presented were to move forward with the Development Services Agreement (DSA) to fund $7.6M of $10.1M in development, design, contracting, and contract pricing, or to continue due diligence before doing so. The Council and Port chose to move forward with the DSA.
July 1, 2019
The Council and Port passed resolutions moving forward with Provident Resource Group as the nonprofit entity that would create the special purpose Minnesota nonprofit entity to borrow, construct and own the water park.
August 12, 2019
Provident attended a concurrent meeting to review Provident’s business model. Staff provided the Council and Port an update of the ongoing project feasibility review process. No action was taken by the Council or Port.
September 9, 2019
The City Council passed a resolution to concur with Provident, in the selection of a syndicate of underwriters as follows: Barclays Capital, Inc. to serve as the bookrunning co-senior manager; Citigroup Global Markets, Inc. to serve as co-senior manager; and Piper Jaffray & Co. to serve as co-manager.
October 29, 2019
The City Council and Port Authority passed a resolution approving the Nonprofit Agreement. The agreement formalizes the relationship between the City/Port and Provident for the project. Key points of the agreement include establishing the members of the Board of Directors for the Nonprofit Entity (Provident-4 and City-1), outlines members of the Project Advisory Committee (BCVB-1, City-1, Port-1, Management Company-1, and Provident-4).
November 12, 2019
The City Council voted to change the ordinance and pass resolutions necessary to allow the Special Taxes to be a backstop for the water park debt. This does not obligate the City to any action except to ‘turn on’ the taxes if the water park does not produce the revenue is it projected to generate.
December 16, 2019
The City Council approved the zoning and entitlements for the waterpark on December 16, 2019. These zoning and entitlement approvals are the standard approvals any real estate project needs in order to ultimately get a building permit to construct a building in Bloomington.
The City Council and Port Authority were originally scheduled to consider the remaining development documents on December 17, 2019. Those documents and related background materials and studies are still being developed and drafted and will not be ready for consideration by the Council and Port until the documents are complete. Delays like this are not uncommon for large development projects.
April 8, 2020
The World Health Organization declared a pandemic on March 11, 2020. The waterpark project was put on hold.
September 8, 2021
The City Council and Port Authority passed motions directing staff to work with Triple 5 to study a private financing option that would use legislation signed into law in Minnesota in 2021 that provides a temporary easing of restrictions on the use of TIF due to COVID-19. The boards also wanted to continue to keep the nonprofit option on the table and directed staff to continue consulting studies.
November 10, 2021
The City Council and Port Authority, in closed session, discussed terms to either purchase or buy an option on the adjoining lands (31 acres directly east of MOA, currently a parking lot) to provide a core site for EXPO 2027 and to provide liquidity for Triple 5 for investment in the privately financed waterpark project.
December 9, 2021
The boards approved the water park financing and adjoining lands option term sheet and directed staff to develop agreements and documents based on the term sheet using TIF as a subsidy to MOA and the water park.
March 9, 2022
The City Council and Port Authority approved key development agreements allowing for the investment of TIF into the water park project and shared public infrastructure.
December 7, 2022
The boards approved amending the MOA TIF Spending Plan to increase the amount to $95.2M in the account and expand the list of potential projects. The 2022 project concept was stalled by the market adjustments in 2022-2023 with the increase in interest rates and construction costs.