When relatives come to the Twin Cities for a visit, natives usually have to endure at least one trip to the Mall of America. The largest shopping mall in the US sports three levels of retail stores and restauarants, and a walk around each level will put three-quarters of a mile on the pedometer. With the revenue that the mall generates, one could feed a small nation — and yet, when the owners want to add more parking as part of an expansion project that will generate even more revenue, where to they go to cover the cost?
This year, the megamall wants $181 million from state taxpayers to build an 8,000-space parking garage. That’s the centerpiece of a package of state and local subsidies worth about $234 million, money the Mall of America says it needs for a $1.9 billion expansion that would double its size.
Last year, state legislators didn’t vote on a measure that would have redirected more than $200 million of its future property tax bill toward construction. This time, the mall wants city and state taxpayers to share the burden.
In meetings with legislators, lobbyists representing the mall have insisted that taxpayers will more than earn back these subsidies through higher sales tax revenues, more jobs and extra tourism generated by an even larger megamall. The proposed expansion is known as Phase II.
It will include four hotels, an National Hockey League-size skating arena and a 6,000-seat performing arts center.
“As the biggest beneficiary of this economic development project, the state of Minnesota has the most to gain or lose if this project does not go forward,” Bloomington Mayor Gene Winstead and Bloomington Port Authority President Robert Erickson wrote in a Feb. 26 letter to lawmakers.
One part of me almost shrugs at this request. After all, the state will build and then give away at least one stadium to a professional sports team over the next few years, and almost certainly two of them. Legislators gave all sorts of strange reasons to give away hundreds of millions of dollars in taxpayer money to the Minnesota Twins, a private enterprise owned by a billionaire who employs millionaires to play 83 games a year here in Minnesota. Why not give hundreds of millions to a multi-billion-dollar developer whose property employs thousands of ordinary Minnesotans?
Well, one reason would be that the government shouldn’t use tax money to subsidize private enterprise, unless the government owns a stake in the enterprise itself. Minnesotans will “subsidize” the mall as they see fit by shopping there, if they desire; if they do not, then the government doesn’t need to bail out the developer. All of the citizens of the state would have to see their tax money go to expand the already-massive MOA, regardless of whether they like the mall — and regardless if the mall competes with their own business.
Proponents of the subsidy justify it as an investment in future tax earnings by the state. Perhaps that might even be true — I’d like my friend and super-economist King Banaian to judge that — but that’s true of every significant private commercial construction project in the state. If the state should foot the bill for MOA’s new parking structure, why shouldn’t taxpayers pay the bill for every single new build or remodel of commercial property?
Government should use taxes for public projects: roads, schools, security, and the like. If we have enough money in the budget for subsidizing stadiums and parking garages for private enterprises, then we have collected too much money in taxes. Let the Mall of America pay for its own expansion, and then lower the taxes all of us have to pay. Let the individuals choose which enterprises they want to “subsidize” through a free market and normal competition. That makes much more sense and will have a much better effect on the state economy in the long run.
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Subsidies For Mall Of America Expansion
The biggest mall in America needs to get bigger with taxpayer money? I remind my children all the time that there’s a big difference between wanting and needing.
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