By BRIAN JOHNSON
BridgeTower Media Newswires
MINNEAPOLIS — The city of Bloomington is expected to take some big steps in the next few months toward planning, designing and building the proposed South Loop Waterpark at the Mall of America.
A big milestone could be reached on Monday, when Bloomington’s Port Authority and City Council will consider choosing Provident Resource Group to be the nonprofit owner and operator of the 250,000-square-foot attraction.
Provident — out of Baton Rouge, Louisiana — was among the five entities that responded to the city’s request for proposals for a nonprofit organization to be the leasehold owner and borrower for the water park, which is to be built on land leased by the city from Triple 5.
An affiliate of Triple 5, which owns the Mall of America, is overseeing the development along with the Bloomington Port Authority. If built as planned, the water park would be one of the largest attractions of its kind in the U.S.
According to the project’s financing proposal, the nonprofit group would borrow money and build the water park using a lease from the city, according to city documents. Excess profits from the water park would primarily be used to pay off the project debt, the city said.
The “nonprofit model” would benefit the project in part because it would allow for financing at a low interest rate and exemption from property taxes, according to a city staff report.
City employees are recommending Provident because of its “organizational structure, extensive project experience, capacity to do the project and reasonable fee structure,” the staff report said.
In the memorandum, Provident said it has financed $4 billion in “project-based transactions” in 20 states and the District of Columbia.
“In a nutshell, they have the experience to do this, probably the most experience of any of these nonprofits. Their staff is very knowledgeable about how it works. … They had an impressive proposal and an impressive team,” Schane Rudlang, Bloomington Port Authority administrator, said in an interview.
Once an nonprofit entity is enlisted, the next steps will include the selection of an underwriter for the debt. City staff employees are drafting a request for proposals for the underwriter, which is expected to be chosen in August.
Work on schematic designs is expected to wrap up in September, followed by financial closing in February 2020. Shortly after the closing, the project team will break ground on an existing surface parking lot across from the megamall’s front entrance.
According to a development-services deal approved in April, the city has agreed to put $7.5 million toward the project’s $10.1 million worth of design costs. Triple Five would cover the remaining cost, according to city documents.
Plans for a water park at the megamall have been in the works for more than a year. According to a plan introduced last fall, a nonprofit group would own the water park throughout the project’s 30-year financing period; then the city would take over.
Some residents and business owners have been skeptical about the project. Critics have questioned the need for a water park and have raised concerns about the city’s involvement and what it all might mean for taxpayers.
Murray Hennessy, the CEO of the Great Wolf Resorts hotel and water park, at 1700 American Blvd. E. in Bloomington, said in March that the proposed Mall of America attraction has a “substantial” risk of failure.
A staff report says the water park would add a “new amenity” to the region while creating demand for hotel rooms. The water park would be open to the public and would not have a contractual relationship with any particular hotel, the city said.
Bloomington property taxes would not be at risk, the city said. If revenue from the water park is less than expected, the city would tap into sales-and use-taxes at the Mall of America to ensure it had a “backstop,” city officials said.