Minnesota Legislature clears the way for Mall of America water park subsidy

Mystery Cove, an elaborate indoor water park, is coming to the Mall of America, and mall owners can thank the Minnesota Legislature for helping with financing for the long-awaited project.

Lawmakers on Monday passed an omnibus tax bill that lets Bloomington pump public dollars toward a $160 million subsidy for the project.

That key provision, tucked into a 123-page document, gives the city more time to pay for the water park through tax increment financing (TIF), a method that will use property taxes the Mall of America generates to subsidize Mystery Cove. It also affords cities across Minnesota additional time to fund various projects through TIF.

A Mall of America spokeswoman thanked Legislators in a statement shared with the Minnesota Star Tribune.

“We are incredibly excited about this project and the lasting economic benefits it will bring to the entire region — by boosting tourism, generating tax revenue, and creating jobs,“ the statement reads. ”This new concept will add a fresh and innovative experience to our offerings, further enhancing our appeal for both tourists and our local community."

Bloomington Mayor Tim Busse said in a statement that the city supports the TIF extension.

“We welcome the additional time due to the complexity of the project and challenging development environment,” Busse said.

The bill extends pandemic-era rules that loosened restrictions on the types of projects that cities can fund with TIF. Bloomington can now funnel property taxes that the Mall of America generates directly into the water park, so long as construction on the amenity begins before December 2027.

The development marks a significant victory for the sprawling mall, which has sought to open a water park inside the 5.6 million-square-foot establishment for decades.

It’s also an economic win for Bloomington, with the water park likely to draw more tourism to the city.

“A successful waterpark will build on Mall of America’s history of positive economic impact on Bloomington and the region,” said Bloomington Port Authority Administrator Holly Masek in a statement.

Kurt Hagen, the senior vice president of development for mall owner Triple Five Group, previously said Mystery Cove is expected to attract 750,000 annual guests, plus generate $9 million in yearly state and regional taxes and $3 million in annual city taxes.

The subsidy for the water park, with renderings showing a lazy river snaking through palm trees, has nearly tripled since 2019 while the square footage of the project has shrunk.

The bill has implications for communities beyond Bloomington, giving all Minnesota cities until December 2026 to fund projects with TIF pursuant to the relaxed pandemic-era rules.

St. Louis Park and Marshall, two cities that previously lobbied the legislature to extend the tax increment financing window, now have more time to finance planned affordable housing projects.

But it’s the Mall of America’s strident push for the TIF extension that’s attracted the most attention — and not all of it positive.

Rep. Nathan Coulter, DFL-Bloomington, previously told the Star Tribune that excitement for using public money to finance a costly indoor water park has waned over the years.

“We’re getting to the point where the potential public support for this is not really, I think, the best direction and the best use of these public dollars,” Coulter previously said.

This isn’t the first time lawmakers have helped the country’s largest mall.

In 2013, the Legislature and then-Gov. Mark Dayton exempted the mall from the regional tax-sharing pool, allowing Bloomington to subsidize mall infrastructure with money that would have helped reduce property taxes elsewhere in the metro.

In 2008, the mall appealed to lawmakers for help subsidizing a proposed expansion — a situation reminiscent of the one that played out this session, though politicians ultimately opted to deny the mall state funding.

In the years since it opened, the mall has received $164 million in tax increment financing. It generated $150 million in taxes last year.

It’s unclear when construction on the water park will begin.