Millions of tax dollars going to Mall of America

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Meanwhile, Minnesota’s small Black businesses struggle to survive without help.

The Mall of America (MOA) owners lobbied the Minnesota Legislature this session for $300 million in public funding for expansion purposes. DFL Rep. Mike Nelson (Brooklyn Park) sponsored a bill (HF 2237) that originally called for $370 million for the MOA, using a complex plan including a one-percent hotel-motel tax in Bloomington as well as diverting state aid from other Minnesota cities.

Lawmakers later changed the bill, calling instead for the city of Bloomington to use new admissions, entertainment, and food and beverage taxes to pay for the MOA expansion project.

The mall opened in August 1992. According to its website, between 11,000 and 13,000 persons work at the mall, which has generated over $800 million in total tax revenues to the State of Minnesota.

“The state hasn’t invested any money into Mall of America since we opened,” claims MOA spokesman Dan Jasper. “It was built with private and [the City of] Bloomington money.”

When this year’s state legislative session closed on Sunday, May 18, Nelson’s bill was included in the bonding bill that Minnesota Gov. Tim Pawlenty is expected to sign.

Jasper considers it a win-win situation for both the mall and the state: “It means 14,000 jobs at a time when we need jobs, and it doesn’t take any State dollars to do it,” he says, adding that a portion of these proposed jobs “will go to minorities. We have a diverse work force at Mall of America now, and that will continue to grow.”

Many argued against the Minnesota Twins when they asked for and eventually received public funding to build their downtown Minneapolis stadium, believing that rich owners shouldn’t be subsidized by public dollars. However, little has been said against the MOA proposal, which also stands to benefit its rich owners.

“This is a different argument than stadiums, the Twins, or anyone else,” responds Jasper, “because we are relying on self-imposed taxes on our property.” He estimates that the project, when completed, “will generate $90 million a year in new tax revenue. [Minnesota] taxpayers benefit from the tax revenue that is generated from this property, not to mention the thousands and thousands of jobs and increased tourism to our state.”

Nonetheless, the question remains, “Is using public funds to support big businesses such as the MOA a good thing?” Last week the MSR asked several Black small business owners about the issue.
“I don’t think we should fund stadiums, and I don’t think we should fund the Mall of America,” says Barbara Davis, president of Ken Davis Enterprises and president of the Minnesota Black Chamber of Commerce.

Gloria Freeman of Olu’s Homes, which operates six group homes in Minneapolis, Brooklyn Park and Robbinsdale, believes this will set a bad precedent: “I would even expect small business owners to start wondering why aren’t they getting a piece of the pie,” she said, adding that small businesses “don’t get those types of breaks such as big businesses like this get.”

Kilo Kisongo, who opened Umoja Shop, a women’s and men’s fashion apparel shop on 38th and Chicago in South Minneapolis a month ago, supports the MOA expansion plan. “It will help other people get jobs,” he says, but added that “it would be good for the state to help us small businesses [as well].”

Joseph Bailey, owner of Millennium Connect, a wireless communication store located next door to Umoja, says, “If they [big businesses] are going to provide more jobs, of course you have to support expansion.”

Deril Hood, owner of All Star Barbers located just around the corner, says, “You have these multimillion-dollar companies making millions of dollars every year and still act like they need support. They get compensated for making money.”

However, MOA’s Jasper argues, “In order to build a project of this density and enormous size, there needs to be some public support of the infrastructure. None of the money [MOA asked for] goes into the building itself, [but] it goes into the parking ramps and the sewers.”

Also, he adds that potential private lenders want to see if the state has given “a vote of confidence in this project. That’s how we can get favorable loan rates when we have to borrow [private] money in order to build the project.”

Davis points out that if state lawmakers could help her, it would be for the same reason as MOA: “[to] expand my business so that I could get more revenue, and therefore pay more taxes.” Still, she argues against the state helping out a private business of any size.

“I can’t think of a time since we have been in business that the state helped us, even when we were trying to get started and [were] trying to borrow money,” Davis recalls.

“If [the state] is going to give money to them, there should be the same amount of funds for the smaller guys,” notes Bailey, adding that he’d like to see small businesses get “tax breaks for the first five years [of operation].”

“This is an absolute win for taxpayers in the state of Minnesota,” the MOA’s Jasper asserts, but 38th Street Business Association Secretary Emmett Bryant doesn’t see it that way.

“I think those businesses in the Bloomington area [where the MOA is located] are really the ones to benefit,” Bryant says. “It is not going to bring a widespread profit to the Minneapolis community.”

Charles Hallman welcomes reader responses to challman@spokesman-recorder.com, or read his blog: www.wwwchallman.blogspot.com.