The only thing worse than stadium subsidies is mall subsidies

[Minnesota Raindog]

This was sent out by Sen. John Marty, one of the legislature's most outspoken critic of corporate welfare for stadiums and shopping malls. Senate Tax Committee Chair Tom Bakk, one of the Senate's biggest anti-environmentalists, has been carrying the water for this one. Bakk wants to be governor and seems to think that anything that creates a few construction jobs is worthy of taxpayer subsidies.


Shopping Mall Parking Ramp to get Public Money?
by Senator John Marty
April 21, 2008
Using public money to build a parking ramp for the Mall of America is wrong.

There are many urgent needs that deserve public funding, but a parking ramp for a shopping mall is not one of them. Yet the Senate tax bill contains provisions allowing for the use of local and metro-wide tax revenue to finance a $186 million parking ramp as part of a new "Phase II" expansion of the Mall of America in Bloomington.

Proponents of the parking ramp subsidy argue that this project will create construction jobs at a time when many construction workers are out of work. But we could create just as many construction jobs building schools, or libraries, or roads. In fact, we could create just as many jobs repairing or replacing bridges.

Unlike a mall parking ramp, construction of public facilities serves a public purpose, something that is the responsibility of government.

The advocates for the parking ramp argue that it is part of a $1.8 billion expansion that would more than double the size of the Mall of America (MOA), making it once again the world's largest shopping mall. This expansion might create as many as 7000 construction jobs and perhaps 7000 retail and entertainment jobs. The lobbyists for the project claim that unless taxpayers pay for a new parking ramp, the developers will decide not to expand the MOA.

But that is not a realistic claim. You could search throughout Minnesota, Wisconsin, North and South Dakota, Iowa -- the entire upper Midwest, and you would not find a piece of property more desirable to a developer than the Mall of America property.

The Mall owners and developers are fully aware of the economic gains they will get from the expansion; they can't afford not to build. They are going to expand regardless of the taxpayer subsidy.

This is not the first time that taxpayers have subsidized the developers here. Several years ago, lobbyists for the MOA succeeded in pressuring politicians to essentially give them the valuable property north of the current Mall. The MOA traded it for a piece of real estate that they had previously purchased for one dollar. Taxpayers essentially gave this property to the developers for free, and now taxpayers are asked to pay $186 million to put a parking ramp on it.

It's not as if the developers don't have enough money. They are expanding the Mall of America to increase their profits. That's great; but not at taxpayer expense.

There would be a public outcry over this if it was widely known. However, these payments are hidden by complex financing arrangements that obscure what is happening. Even some politicians agreeing to the deals may not fully understand what they are doing.

In this case, the parking ramp would use tax increment financing (TIF) and an exemption from the fiscal disparities pool. Few people understand the fiscal disparities pool or TIF, and most people's eyes glaze over if you try to explain them. In short, both subsidies shift the tax burden to others.

It is not too late to block this government subsidy for the MOA parking ramp from passing the legislature. Picture how refreshing it would be if Minnesota let shopping mall developers pay for their own projects and invested instead in building affordable housing, or improving the facilities at our schools, colleges and universities.

The lobbyists for the MOA might complain, but you can bet their expansion project will move forward anyway. Meanwhile, Minnesota could once again become a national leader through our investments in education, truly building for the future.

[mediaman007]

1. I can agree with this!

We can't get the governor to commit to taking care of children's health. How can we support this idea?