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Mall of America owners facing opposition on request for tax aid

State legislators are divided on whether to help MOA.

Like many other businesses during the coronavirus era, the Mall of America (MOA) is seeking tax relief — but it could be facing an uphill battle for assistance from Minnesota.

This week, the city of Bloomington — home of the megamall — notified state lawmakers that it formally opposes allocating tax funds to MOA. 

The conflict stems from a state senate bill that temporarily allows city governments to use tax increment financing (TIF) funds to issue loans to private business as they see fit, 

The legislation says that any loan money that's "used to retain employees, satisfy payroll obligations, satisfy rent or mortgage debt obligations, or make utility payments... shall be forgiven in accordance with the terms of such loan."

This is where Bloomington objects. 

In a Tuesday letter to state legislators who represent the city, City Manager Jamie Verbrugge notes that, during hearings for the aforementioned bill, he testified that it should have given cities the ability to "require repayment of the loans."

The current wording of the legislation does not give them that power. 

Verbrugge also says that "it is unknown whether a loan would or could be repaid, in which case the funds would not be available for future projects."

However, the Mall of America, and specifically its owners, Triple Five Group, have support from Senate Majority Leader Paul Gazelka (R-Nisswa).

According to the Star Tribune, Gazelka has asked Gov. Tim Walz and House Speaker Melissa Hortman (both DFLers) to "work with the senate on addressing the issue before the session ends Monday."

“We didn’t have all the information when we passed our tax bill, but I do think it’s something we should pay attention to,” Gazelka said, per the paper, adding that Triple Five would only be borrowing the funds and not "asking for free money.” 

He also told FOX 9 that "only 5 percent of the mall's rents came in" last month due to coronavirus shutdown orders, and that "there is virtually no money coming in, but they still have all their debt obligations." 

However, Bloomington would still oppose bailing out MOA even if the legislation is amended to allow cities to recoup TIF funds.  

In the aforementioned letter to lawmakers, Verbrugge said, "even with these (proposed) changes, the City of Bloomington does not support legislation that would allow loans of tax increment to Triple 5, at this time." 

"We simply have no assurance or confidence that a loan will help the long-term viability of the project."

The proposal is also facing opposition because the mall's owners have much deeper pockets than many of the businesses seeking aid during the pandemic, as noted by DFL state Rep. Michael Howard in a Facebook post:

Nonetheless, MOA is scheduled to open on Monday, June 1.

BringMeTheNews has reached out to Triple Five for comment. 

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