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These comments are responses to the statements listed below,
which were generated in regard to the
Schane Rudlang, Larry Lee and Matt Gersemehl Interview of 05-04-2014.
 

State assistance for Mall of America expansion will prove beneficial to region

OVERVIEW

The 2013 Legislature passed a law diverting the Mall of America's (MOA) Fiscal Disparities contribution from the regional property-tax-base sharing pool to the Mall's two tax-increment financing (TIF) districts. According to Bloomington city officials Matt Gersemehl, Larry Lee and Schane Rudlang, the Fiscal Disparities (FD) diversion will last for 20 years and should fully fund public investment in infrastructure for the second half of the Mall-area expansion project.

Gersemehl says in supporting the 2013 legislation, Bloomington officials and State Rep. Ann Lenczewski (DFL-Bloomington) argued the Mall actually benefits the entire region and state through the payroll, property and sales taxes generated there. So, rather than having Bloomington taxpayers shoulder the burden of paying for the MOA's Phase 2 infrastructure through TIF, Lenczewski and city officials maintained using the portion of the regional FD revenue generated by the Mall to pay those costs would be more appropriate.

Lee says without this public subsidy for infrastructure, i.e., parking, roads, water and sewer, the Mall-area expansion would be built, but it would be less dense. He asserts that developing at a lower density would underutilize public investments already made in the area, such as the airport and the light-rail transit line. Rudlang points out that two important factors in increasing the density of the development are building publicly-funded parking ramps, rather than surface parking, and reducing the number of parking spaces needed by using shared parking and access to transit.

For the complete interview summary see:  link to interview

Response Summary: Average response ratings shown below are simply the mean of all readers’ zero-to-ten responses to the ideas proposed and should not be considered an accurate reflection of a scientifically structured poll.

To assist the Civic Caucus in planning upcoming interviews, readers rated these statements about the topic on a scale of 0 (strongly disagree) to 5 (neutral) to 10 (strongly agree):

1. Topic is of value. (7.4 average response) The interview summarized today provides valuable information or insight.

2. Further study warranted. (5.5 average response) It would be helpful to schedule additional interviews on this topic.

Readers rated the following points discussed during the meeting on a scale of 0 (strongly disagree) to 5 (neutral) to 10 (strongly agree): 

3. MOA benefits entire region. (6.3 average response) The Mall of America (MOA) brings greater benefits to the metro region and the state than it brings directly to the City of Bloomington.

4. Subsidies needed for expansion. (4.5 average response) Taxpayer assistance is needed to subsidize expansion of the MOA.

5. Metro taxpayers should help. (4.6 average response) Taxpayers in the entire metro area, not just the City of Bloomington, should help finance the MOA expansion.

6. Law change aiding MOA is warranted. (4.5 average response) It was appropriate for the 2013 Legislature to change the Metropolitan Tax-Base Sharing Law, also known as the "Fiscal Disparities Law," to divert Bloomington's prescribed contribution from the regional property-tax sharing pool benefitting other metro communities and direct that contribution instead to subsidize the MOA expansion.
 

Response Distribution:

Strongly disagree

Moderately disagree

Neutral

Moderately agree

Strongly agree

Total Responses

1. Topic is of value.

18%

0%

0%

45%

36%

11

2. Further study warranted.

18%

9%

9%

64%

0%

11

3. MOA benefits entire region.

18%

0%

18%

45%

18%

11

4. Subsidies needed for expansion.

27%

18%

18%

27%

9%

11

5. Metro taxpayers should help.

27%

18%

18%

18%

18%

11

6. Law change aiding MOA is warranted.

27%

27%

9%

18%

18%

11

Individual Responses:

Kevin Edberg  (10)  (7.5)  (0)  (0)  (0)  (0)

1. Topic is of value. Very lengthy, but a good exposition and primer on TIF and related development subsidies, especially as pertains this project.

3. MOA benefits entire region. Not buying the argument.  Bloomington businesses got the initial benefit of reduced property taxes to support education; Bloomington schools got the full benefit of that policy. (As did schools and businesses in the rest of the state).  The fact that this created a hole in somebody's development budget isn't a "shared problem". Instead, the use of FD diversion further disproportionately benefits Bloomington taxpayers and community, and sets a VERY BAD precedent that undermines the role that Fiscal Disparities was originally created to address (the beggar-thy-neighbor approach to competing for certain major developments).  While more business gets done at MOA, it comes largely at the expense of expenditures at other retail locations; we are not creating new wealth in the region (at least not commensurate with the total increases cited), we are merely recircluating existing dollars to the benefit of Bloomington and SW metro.

4. Subsidies needed for expansion. These projects disproportionately benefit wealthy investment- driven owners.  The true wealth creation comes from some marginal increase of new travel from outside the state that shops/recreates at Mall property.  All else is a concentrated recirculation of existing funds to the benefit of a specific community, to the benefit of investor owners, and to the detriment of other communities.  (Article didn't address: are jobs created subject to a requirement for livable wages? Or expansion of low-wage retail?)

6. Law change aiding MOA is warranted. No. This was rent-seeking by a privately owned group of enterprises, facilitated by publicly employees from the City of Bloomington, and a state senator from Bloomington who held a position of influence, and used that position to bring bacon home to her district.  And it sets in motion a terrible policy precedent that undermines a multi-jurisdictional approach/regional solution to development policy.

Dave Broden  (7.5)  (2.5)  (7.5)  (2.5)  (5)  (2.5)

1. Topic is of value. Useful information regarding expanding the Mall of Armerica site but not any attention to overall economic development.

2. Further study warranted. Not unless the guest has something to say about overall growth. Speaking of attracting people rather than jobs and specific skill etc. is not a strategy.

3. MOA benefits entire region. A reasonable statement but if so then the overall economic growth should be emphasized more.

4. Subsidies needed for expansion. This was not conviencing

5. Metro taxpayers should help. Perhaps but more solid arguments pro and con first.

6. Law change aiding MOA is warranted. Fiscal Disparties must serve all communities not a single unit.

Robert Freeman  (10)  (7.5)  (10)  (10)  (10)  (10)

3. MOA benefits entire region. The Mall is the largest tourist draw (by visitors) in the country and is probably Minnesota's best known landmark outside of the country.

6. Law change aiding MOA is warranted. This is an innovative approach and makes sense.

Steven Peer  (10)  (5)  (10)  (7.5)  (10)  (10)

1. Topic is of value. It would have been nice to see a more extreme polar view -- e.g. the downside of such innovative FD use, etc.  Though off-topic a bit, I would like to have known how the MOA taxes paid compare to ther local businesses and other US malls.

6. Law change aiding MOA is warranted. I believe this would be the first "withdrawals" made by Bloomington since the inception of FD?

Anonymous   (7.5)  (7.5)  (5)  (7.5)  (2.5)  (2.5)

Don Anderson  (0)  (0)  (0)  (0)  (0)  (0)

3. MOA benefits entire region. I don't see how it benefits the northern part of the region in anyway.

4. Subsidies needed for expansion. Not metro wide assistance.

Lyall Schwarzkopf   (9)  (6)  (6)  (4)  (3)  (4)

Wayne Jennings   (9)  (8)  (9)  (8)  (8)  (7)

John Adams  (na)  (na)  (na)  (na)  (na)  (na)

I don't agree with much of this analysis. I recall the original development of the Mall of America, accomplished with a variety of subsidies, had as one effect the draining of capital values from Southdale, among other centers. The gain in sales at one location occurred in part by transferring sales (and capital values) from other locations. It would not have been bad had this set of events been accomplished without public subsidy of several kinds.

"Real estate development" is not the same as "economic development". Economic development occurs only when the overall balance sheet for the region improves.

I have never understood why people believe that subsidizing retail development at a specific location guarantees economic development of any kind.  In the case of MOA, expanding the mall will probably enhance Bloomington's tax capacity, but what does doing so mean for the tax capacity of neighboring jurisdictions.

For another view see: Transportation as Catalyst for Community Economic Development

Tom Spitznagle   (10)  (8)  (8)  (5)  (7)  (9)

Chuck Lutz  (8)  (8)  (9)  (5)  (5)  (5)

Chris Wright  (0)  (0)  (5)  (0)  (0)  (0)

Taxpayers shouldn’t be paying for the Mall of America corporate welfare expansion.  If it’s profitable, the Mall of Canadian owners will expand the Mall of America with their own money. The enormous myriad of subsidies, bailouts, giveaways, tax loopholes, debt revocations, loan guarantees, discounted insurance and other benefits conferred by government on business is a function of political corruption.  When money is spent on corporate welfare it is not available to meet the pressing needs of the people. Any Bloomington City officials who votes to spend the City's money on corporate welfare should be voted out of office for official corruption, fined and jailed for giving the taxpayers money to privateers.

    

The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Interview Group  includes persons of varying political persuasions,
reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

  John S. Adams, David Broden, Audrey Clay, Janis Clay, Pat Davies, Bill Frenzel, Paul Gilje (coordinator), Randy Johnson, Sallie Kemper, Ted Kolderie, Dan Loritz (chair),
Tim McDonald, Bruce Mooty, John Mooty, Jim Olson, Paul Ostrow, Wayne Popham, Dana Schroeder, Clarence Shallbetter, and Fred Zimmerman


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The Civic Caucus, 01-01-2008
2104 Girard Avenue South, Minneapolis, MN 55405.  civiccaucus@comcast.net
Dan Loritz, chair, 612-791-1919   ~   Paul A. Gilje, coordinator, 952-890-5220.

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