A Mall of America official disclosed last week that lenders are likely going to take a 49% equity stake in the Bloomington megamall after the pandemic hampered its operations elsewhere.
Why it matters: Valued at $1.9 billion, MOA is perhaps the largest real estate asset and tourism driver in the state — and lenders are likely have a very large voice in what happens to its future.
- "We have to wait and see if there is any impact [to Bloomington]," Bloomington Port Authority administrator Schane Rudlang told Nick. "We continue to monitor the situation."
How it happened: MOA owner Triple Five Group took out a $1.67 billion construction loan to build the American Dream Mall in New Jersey.
- As collateral, Triple Five put up a stake in MOA and the West Edmonton Mall in Canada.
- American Dream opened last March, but has been hampered by pandemic capacity restrictions, causing cashflow issues, Kurt Hagen, senior vice president of development for MOA, told Bloomington's city council.
- Triple Five, he added, will lose hundred of millions of dollars by the time the pandemic is over.
More mall problems: MOA is similarly struggling with reduced capacity and 45 tenants have closed in the past year, said Jill Renslow, MOA's senior vice president of business development.
- Triple Five missed mortgage payments early in the pandemic but worked out a deal with lenders in January.
- Both mall officials and Bloomington city staff pushed the idea of asking for state approval for flexibility to use tax increment financing and liquor tax revenues to help boost Bloomington tourism.
- City council members rejected the idea on a 4-3 vote, with some questioning why the city would use tax dollars for private projects.
This story first appeared in the Axios Twin Cities newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard.
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