It's taken a while, but the $325 million expansion of the Mall of America is finally under way. But is the timing right?
The long-awaited Phase 2 will add high-end retail, a food hall, restaurants, a tourist center, JW Marriott hotel and office tower to the project's north end.
"This is a major milestone for Mall of America," said Paul Ghermezian, COO for developer Triple Five Worldwide, in an announcement. "For more than 20 years, it has been our dream to increase the size of the Mall, firmly establishing it as a world renowned attraction. Today, I couldn't be more pleased to say that dream is becoming a reality."
A second phase for the 4.2 million-square-foot retail and entertainment complex had been planned from the moment the complex opened in 1992. Smaller additions have been built over the years, including IKEA and a Radisson hotel, but didn't come into fruition as real estate cycles rose and fell and partners changed (Simon Property Group, the original partner, lost its interest in the project after litigation, then Ryan Cos. dropped out as the development partner for the addition.)
The expansion is a development of Triple Five, Mortenson, a US-based construction and development services company, Hotel Development LLC, an enterprise of the Shakopee Mdewakanton Sioux Community, and the City of Bloomington, MN. The project will receive some $250 million in incentives from the state to fund road improvements and other infrastructure. The retail will open in August 2015, the hotel two months later, and the office a couple of months after that, reports the Grand Forks Herald. And believe it or not, a third phase is possible, if the developers can finance city-approved plans for a water park, dinner theater and more hotel and office space.
But how much is too much? Back in the 1990s, a lot of people wondered whether Mall of America would succeed, given its size (520 stores) and proximity to the well-established Southdale. And this expansion comes at a time when retailers are only cautiously expanding. The Bloomingdale's at Mall of America closed in 2012. Then again, doubting Mall of America wouldn't have made anyone any money 20 years ago.
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