The May 22 issue of the Sunday Star Tribune had an opinion page commentary by former Star Tribune business reporter Mike Meyers: Downtown Minneapolis: Spreading seeds, getting weeds.
Meyer cited the problems with City Center, Riverplace, Gaviidae Common, Dain Plaza, LaSalle Plaza, and Block E, which were all backed with public subsidies.
He cited a successful one—the downtown Target store—which for him, raises some questions:
In at least one case, city officials got what they expected — when they backed a downtown Target store. For a decade, downtown dwellers and workers have had a place to buy socks, dinnerware and toilet paper at discount prices. And, by all accounts, Target is satisfied with the traffic.
But the success of the Target store raises the paradox of public subsidies. If retailers cannot survive without public aid, why is the city investing in potential failure? If, on the other hand, customers flock to a downtown store, was the public subsidy really needed?
Public subsidies for the Mall of America (MOA) in Bloomington became an issue in 2007 when the Mall of America requested state money for a parking ramp as part of its planned Phase II development.
Then Gov. Pawlenty vetoed the subsidy in 2007 but, according to the Wikipedia entry for the Mall of America:
On May 18, 2008, the Minnesota State Legislature passed a bill granting the city of Bloomington the right to raise property and sales taxes to pay for the MOA expansion. The expansion was originally scheduled to begin to take place in 2007, and open in 2012, but no construction has yet to begin, due to the economic recession.
The pros and cons of subsidies for development (MOA and others) was discussed on MPR’s Midmorning show in March of 2007: The lure of subsidies (Real Audio player required). Guests included:
- Ann Lenczewski: DFL representative from Bloomington and then chair of the House Tax Committee
- Gene Winstead: Bloomington Mayor
- Art Rolnick: Then Senior vice president and director of research for the Federal Reserve Bank of Minneapolis
- Bill Griffith: attorney for the Mall of America
Via the blog comments feature below, chime in with your reaction to Meyers’ opinions, as well as your comments about the pros and cons of public subsidies for retail development.