There's at least one prominent opponent to the Mall of America's plans for a massive water park in Bloomington: another water park in Bloomington.
The plans to create the largest indoor waterpark in North America on land northeast of – and owned by – the MOA have raised plenty of eyebrows since they were first revealed last year.
Perhaps unsurprisingly, it's prompted an objection from Murray Hennessy, the CEO of Great Wolf Resorts, which operates the Great Wolf Lodge waterpark and hotel – formerly the Waterpark of America – just across Hwy. 77 from Ikea.
In a letter sent to the city this week, Hennessy lists several concerns about the project, including about how it's being funded, and the possibility that there won't be enough visitors to make it a success.
But ultimately, the construction of a significantly larger, open-to-the-public waterpark within a few hundred yards of Great Wolf's own resort (which is for guests only), represents a titanic threat to Hennessy's business.
And he feels like the city is rolling out the red carpet for MOA owners Triple 5, offering incentives and funding to build an attraction that would directly benefit the MOA, which it would arguably not provide smaller businesses.
"As the City takes steps to provide public support to a Mall of America waterpark – whether through special debt financing, property tax avoidance or sales taxes to support waterpark operations – you will also change the economics for other properties in this area," Hennessy wrote.
"Our operation in Bloomington will have direct competition from an indoor waterpark that will abide by a different set of economic rules than Great Wolf Resorts or any other local business does.
"Future developers will have little incentive to build new amenities knowing the Mall of America will always have an economic advantage in an otherwise open market.
"Cannibalizing existing business enterprises in order to add a new attraction for the Mall of America is bad strategy for long-term business development and tax stability – even if the Mall’s waterpark succeeds, the rest of the City doesn’t."
Bloomington Port Authority Administrator Schane Rudlang, in a response reported by the Business Journal, said that there is plenty of space for two competing businesses.
"The water park project provides an recreational amenity and attraction to the metro area that does not exist today,” he wrote.
"Many water parks co-exist in the same area, with the closest example being the Wisconsin Dells."
Concerns over the funding
It was revealed in city documents in October that the planned water park would cost between $230 million and $250 million.
The city has proposed creating a nonprofit so the park is exempt from property taxes, and it's allowed to access lower-cost construction loans to fund the project.
It would lease the land from Triple 5, while Triple 5 would sign a 50-year lease to operate the water park.
The city says that the revenue generated from the water park would be enough to pay off the debt taken on to build it, while any shortfall would be made up by additional taxes on the Mall of America.
But Hennessy thinks there's a real chance that the water park fails, arguing there's not enough traffic to sustain a 365-day-a-year water park.
This would result in the aforementioned extra tax levies on the MOA.
This in turn could be passed on to customers, making the MOA a less attractive destination for the 40 million-plus visitors is attracts each year, leading to a negative knock-on effect for other local businesses that rely on MOA traffic.