Lawmakers mull mall expansion
ST. PAUL - Hard hats mingle with hard-nosed politics in the Minnesota Capitol these days as the Mall of America seeks legislators' blessing to expand.
It was especially evident Tuesday, when hundreds of construction workers rallied in support of a $2.1 billion mall expansion with an impact that supporters say reaches far from its Twin Cities' home.
With less than three weeks left in the 2008 legislative session, lawmakers are considering whether to grant the mall's request to let Bloomington and other local governments fund projects such as parking ramps, water, sewer and street improvements needed for the expansion to proceed.
The state did not spend money on the first part of the mall, finished in 1992, and would not under this year's proposal.
Senate Taxes Chairman Tom Bakk, DFL-Cook, pledged to demand the mall project be involved in final negotiations among legislative leaders and Gov. Tim Pawlenty.
It is obvious that Bloomington and other communities near the mall stand to gain taxes and jobs if the mall expands, but supporters say all Minnesotans and those in neighboring states also would benefit.
For instance, mall figures project that the 5.6 million-square-foot expansion would produce $43 million additional sales tax and $12 million more income taxes for the state each year.
Businesses - in some cases those far from the mall - also benefit from the 40 million annual mall visits, and supporters say that would increase when up to 20 million more mall visitors come after an expansion.
Mall officials estimate that current visitors pay $1 billion a year for hotel rooms and purchases from other places than the mall, including trips to tourism destinations across the region.
Of the 40 million visitors - more than all other Minnesota tourism destinations combined - the mall says 5.8 million come to the state just to visit the mall.
The mall owners - Canada-based Ghermezian family's Triplefive - propose to expand on the north of the mall. The mall's Phase 2 would more than double its size, with more entertainment and hotel facilities. It would feature at least one large retailer, probably a Bass Pro Shops store.
Daniel Jasper of the mall said that if the state does not approve its plans, owners may only build a couple of stores and hotels, which would bring far less money to the state.
Rep. Dean Simpson, R-Perham, said he sees only spotty opposition among legislators. Simpson, the top House Taxes Committee Republican, said he sees nothing but pluses for rural Minnesota if the mall expands.
Bakk said tourists pay much of the tax collected at the mall.
"The best tax is one you can export to someone else," Bakk said.
House Minority Leader Marty Seifert, R-Marshall, said the mall project has the potential of bringing more money to the state than anything else lawmakers are considering.
Despite heavy legislative support, Republican Pawlenty remains uncommitted.
"We believe that this year's Mall of America financing proposal is better than last year's, but we still have some questions and concerns," Pawlenty spokesman Brian McClung said, not specifying those concerns. "In addition, the governor will be looking at the Mall of America proposal in the broader context of our state's priorities and whether legislators are serious about appropriately solving our budget challenges."
Some legislators do not like the mall proposal, including a key representative.
Rep. Ann Lenczewski, DFL-Bloomington, opposes all corporate subsidies and sees the mall plan as a subsidy. As chairwoman of the House Taxes Committee, her feeling carries sway.
Rep. Sandy Wollschlager, DFL-Cannon Falls, represents another kind of opponent. She told the Taxes Committee last week that she has trouble supporting the mall plan because she fears it, like Target and Wal-Mart, would hurt local businesses.
The timing is great, Simpson said. With a weak American dollar, foreign tourists are eager to visit this country - and spend money in places like the megamall.
Unemployment is high, especially among union members who would build the mall.
"If you want to move the state forward, you have got to put people to work," Bakk said, adding that would provide more state revenue to fix a looming deficit.
Like when the first part of the mall was built, PCL Construction Service's Terry Brickman said, today's sluggish economy would receive a strong boost from construction. Brickman's Burnsville company built the first part of the mall and likely would be general contractor for the expansion.
About 16 percent of Minnesota construction trade workers - people such as electricians, plumbers and carpenters - are unemployed. The 7,000 construction jobs needed to expand the mall would put a major dent in that number.
Construction on the four-year project could begin this fall.
Brickman said the mall addition would help workers from across Minnesota and into adjoining states in at least two ways:
-- Tradesmen would be willing to drive a long ways from home to work on the mall.
-- Twin Cities tradesmen now working across the region likely would return home to work on the mall, leaving jobs they now fill for local workers.
Brickman said the original mall involved 200 subcontractors from the region, and the expansion should do the same.
"It means a lot for the state in general," Bakk said. "I don't want to have the 13th largest mall in the world, I want the biggest."