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Home My WebLink About2021-12-09 HRA Regular Meeting PacketAg enda E dina H ousing and R edevelopm ent Author ity City of E dina, Minnesota City Hall, Council Chambers Thursday, Decem ber 9, 2021 7:30 AM Watch the m eeting on cable TV or at EdinaMN.gov/LiveMeeting s or Facebook.com /EdinaMN. To par ticipate in Com m unity Com m ent: Call 800-374-0221. E nter Conference ID 3154058. Give the operator your nam e, street address and telephone number. Press *1 on your telephone keypad when you would like to get in the queue to speak. A City sta8 m em ber will introduce you when it is your tur n. Or attend the meeting to provide testimony, City Hall Council Cham bers, 4801 W. 50th St. I.Call to Ord er II.Roll Call III.Pledge of Allegia n ce IV.Ap p roval of Meetin g Agen d a V.Com m unity Com m en t Du ring "Com m unity Com m en t," th e Edin a Housing and Redevelop m ent Au thority (HRA) will in vite resid ents to sh are new issues or con cern s tha t h aven't been con sid ered in th e p ast 30 da y s b y th e HRA or w h ich a ren't slated for fu ture consideration . Individ u als m u st lim it their com m ents to three m inutes. Th e Ch air m a y lim it the num ber of sp ea kers on th e sa m e issue in th e interest of tim e a n d topic. Gen era lly sp ea king, item s tha t are elsewhere on tod ay's a genda m a y not b e addressed d u ring Com m unity Com m en t. In d ividua ls sh ould not expect th e Ch air or Com m issioners to resp ond to th eir com m en ts toda y . Instead the Com m issioners m ight refer the m atter to sta. for consideration a t a fu ture m eeting. VI.Ad option of Con sen t Agenda All a genda item s listed on the consent a genda a re con sid ered rou tin e and will be en acted by one m otion. There will be no sepa rate d iscussion of such item s unless requested to be rem oved from the Con sen t Agenda by a Com m ission er of the HRA. In su ch ca ses the item w ill b e rem oved from th e Consent Agen d a and con sid ered im m ediately follow ing the a d option of th e Consent Agen d a. (Fa vorable rollcall vote of m a jority of Com m issioners p resent to approve.) A.Novem b er 18, 2021 Regu la r Meetin g Minutes B.Approve Paym en t of Cla im s VII.Reports/Recom m enda tions: (Favora b le vote of m ajority of Com m ission ers p resent to approve excep t where n oted) A.Resolution 2021-14: Approvin g th e Decerti;ca tion of the Sou thda le 2 Ta x In crem ent Fin ancing District B.7001 France Ave - Project Upda te regardin g Ta x In crem ent Fin ancing C.MOTION TO CLOSE SE SSION: as perm itted by MS. 13D.05 su b d ivision 3 to discu ss th e p otentia l Sale of Rea l Prop erty located at 5146 Eden Avenue. D.Motion to m ove b ack in to op en session . VIII.HRA Com m issioners' Com m en ts IX.Executive Director's Com m ents X.Ad jou rn m ent Th e E d ina Housing a n d Redevelop m ent Au thority wa n ts all pa rticip ants to be com fortable b ein g pa rt of th e p u b lic p rocess. If y ou n ee d a ssista n ce in the w a y of h ea ring am pli;ca tion, a n in terp reter, large-p rint docum en ts or som ethin g else, p lease ca ll 952-927-8861 72 hou rs in advance of the m eeting. Date: December 9, 2021 Agenda Item #: VI.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: Minutes F rom:Liz O ls on, Administrative S upport S pecialist Item Activity: Subject:November 18, 2021 R egular Meeting Minutes Action Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve the regular minutes of November 18, 2021. I N TR O D U C TI O N: S ee attached meeting minutes of N ovember 18, 2021. AT TAC HME N T S: Description Minutes HRA 11-18-2021 Page 1 MINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY NOVEMBER 18, 2021 7:30 A.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 7:30 a.m. then explained the processes created for public comment. II. ROLLCALL Answering rollcall were Commissioners Anderson, Jackson, Pierce, Staunton (arrived at 7:40 a.m.) and Chair Hovland. Absent: None. III. PLEDGE OF ALLEGIANCE IV. MEETING AGENDA APPROVED - AS PRESENTED Motion by Commissioner Jackson, seconded by Commissioner Anderson, approving the meeting agenda as presented. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, and Chair Hovland Absent: Commissioner Staunton Motion carried. V. COMMUNITY COMMENT No one appeared. VI. CONSENT AGENDA ADOPTED – AS PRESENTED Member Jackson made a motion, seconded by Member Pierce, approving the consent agenda as presented: VI.A. Approve minutes of the Regular Meeting October 28, 2021 Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VII. REPORTS/RECOMMENDATIONS VII.A. 5146 EDEN AVENUE – REDEVELOPMENT PLANNING – REVIEWED Economic Development Manager Neuendorf said this item pertained to the redevelopment planning for the vacant site at 5146 Eden Avenue. He said staff continued to dialogue with United Properties and Jester Concepts to prepare concepts to redevelop the site then presented an update on the initial concept for the northern portion of the site for discussion among the HRA Board. He reviewed the tentative schedule and noted the HRA was not under any contract then explained the presale requirements should the project move forward, which would last into 2023. He outlined future work of construction documents and bid award as well as full financing and real estate closing with groundbreaking and occupancy dates yet to be determined. Mr. Neuendorf outlined the land development needs which included infrastructure and Arcadia Avenue widening then shared renderings that showed permanent public space, restaurant, public versus private use, elevation change accommodations, future public art and open area for special events. The Board asked questions and provided feedback. Minutes/HRA/November 18, 2021 Page 2 VII.B. PROJECT MANAGEMENT AGREEMENT WITH FRAUENSHUH INC. – 5146 EDEN AVENUE – APPROVED Mr. Neuendorf said this item pertained to the redevelopment of the vacant site at 5146 Eden Avenue which included the need for skilled expertise to navigate the various options to maximize the value and use of the space. He said as conversations with United Properties and Jester Concepts advanced, a project manager skilled in land development was needed and the professionals at Frauenshuh Inc. had this expertise. Mr. Neuendorf noted due to the knowledge of the site, staff recommended that Frauenshuh be engaged to provide project management services in the pre-design and preliminary zoning phases that would culminate in a sketch plan submittal for input from the neighbors, Planning Commission and City Council and follow up submittal to secure preliminary rezoning of the site. He said cost of this service was estimated to be $41,100 plus expenses and should the development concept advance past the pre-design phase, this service could be continued as needed. He said staff recommended approval of the Project Management Agreement for 5146 Eden Avenue with Frauenshuh Inc. He clarified Frauenshuh was not involved in equity in the project but would be acting only as a broker with housing through United Properties and the restaurant as a concept. He confirmed that Frauenshuh was an independent party and in essence worked for the City. The Board asked questions and provided feedback. Member Staunton moved to approve the project management agreement for 5146 Eden Avenue with Frauenshuh, Inc. Member Pierce seconded the motion. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VIII. HRA COMMISSIONERS’ COMMENTS – Received IX. EXECUTIVE DIRECTOR’S COMMENTS – Received IX.A. AWARD FROM AMERICAN PLANNING ASSOCIATION – MINNESOTA IX.B. REQUEST FOR TIF ASSISTANCE – 7001 FRANCE AVENUE X. ADJOURNMENT Motion made by Commissioner Staunton, seconded by Commissioner Pierce, to adjourn the meeting at 8:40 a.m. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. Respectfully submitted, Scott Neal, Executive Director Date: December 9, 2021 Agenda Item #: VI.B. To:C hair & C ommis s ioners of the Edina HR A Item Type: C laims F rom:Alis ha Mc Andrews , F inance Director Item Activity: Subject:Approve P ayment of C laims Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: M otion to approve payment of claims for H R A Check Register 10.2021-11.2021 T O TAL $1,471,714.39. I N TR O D U C TI O N: P ayment of claims are attached. AT TAC HME N T S: Description HRA Check Register 10.2021-11.2021 TOTAL $1,471,714.39 City of Edina, MN INVOICE LIST BY GL ACCOUNT Report generated: 12/01/2021 15:03 User: LJefferson Program ID: apinvgla Page 1 YEAR/PERIOD: 2021/10 TO 2021/11 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION 26026000 HRA Administration 26026000 2066 HRA Admin - OthrEscrow 100049 EHLERS AND ASSOCIATE 88450 0 2021 10 INV P 2,500.00 20211105 466297 100049 EHLERS AND ASSOCIATE 88620 0 2021 10 INV P 7,500.00 20211105 466297 10,000.00 100730 DORSEY & WHITNEY LLP 3697756 0 2021 10 INV P 802.50 20211105 466294 100730 DORSEY & WHITNEY LLP 3697757 0 2021 10 INV P 21,527.00 20211105 466294 22,329.50 132810 ECM PUBLISHERS INC 857264 0 2021 10 INV P 202.30 20211105 466296 ACCOUNT TOTAL 32,531.80 26026000 6102 HRA Admin - Contr Svrs 142458 EDINA MARKET STREET 06 0 2021 10 INV P 745.00 20211112 466498 Water Meter ACCOUNT TOTAL 745.00 26026000 6131 HRA Admin - PrfSvLegal 100730 DORSEY & WHITNEY LLP 3697755 0 2021 10 INV P 3,520.50 20211105 466294 ACCOUNT TOTAL 3,520.50 26026000 6136 HRA Admin - PrfSvOther 100438 STANTEC CONSULTING S 1847077 0 2021 11 INV P 1,600.00 20211119 466769 100438 STANTEC CONSULTING S 1849908 0 2021 11 INV P 3,619.04 20211126 467002 5,219.04 123129 TIMESAVER OFF SITE S M26824 0 2021 11 INV P 187.00 20211126 467020 10/14 HRA Minutes ACCOUNT TOTAL 5,406.04 ORG 26026000 TOTAL 42,203.34 26026001 HRA Affordable Housing 26026001 1245 HRA Aff Hs - Loans Receivable 124942 WEST HENNEPIN AFFORD 5928EWING 0 2021 10 DIR P 259,300.00 20211004 4 draw on $1.3M LOC f 124942 WEST HENNEPIN AFFORD 6432JOSEPHINE 0 2021 10 DIR P 365,700.00 643 625,000.00 139396 WATERMARK TITLE AGEN 5924 France Ave S 0 2021 11 DIR P 420,966.93 11 ACCOUNT TOTAL 1,045,966.93 26026001 6102 HRA Aff Hs - Contr Svrs 103252 VEAP INC (VOLUNTEERS 211322 0 2021 10 INV P 100,000.00 20211105 466434 VEAP Grant City of Edina, MN INVOICE LIST BY GL ACCOUNT Report generated: 12/01/2021 15:03 User: LJefferson Program ID: apinvgla Page 2 YEAR/PERIOD: 2021/10 TO 2021/11 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION 103300 CENTER FOR ENERGY AN 20296 0 2021 11 INV P 84,730.72 20211126 466842 CEE For Home Rehab ACCOUNT TOTAL 184,730.72 26026001 6718 HRA Aff Hs - CapLand 101503 HENNEPIN COUNTY 30-117-21 22 0122 0 2021 10 INV P 1,807.92 20211015 465535 Property Tax paid b ACCOUNT TOTAL 1,807.92 ORG 26026001 TOTAL 1,232,505.57 26126103 Southdale 2 TIF 26126103 6131 SoDa 2 TIF - PrfSvLegal 132810 ECM PUBLISHERS INC 859460 0 2021 10 INV P 95.20 20211119 466680 ACCOUNT TOTAL 95.20 26126103 6136 SoDa 2 TIF - PrfSvOther 100049 EHLERS AND ASSOCIATE 88451 0 2021 10 INV P 4,462.50 20211105 466297 ACCOUNT TOTAL 4,462.50 ORG 26126103 TOTAL 4,557.70 26126106 Grandview 2 TIF 26126106 6713 Grnd 2 TIF - CapBldStrc 105690 PRO-TEC DESIGN INC 103052 0 2021 11 INV P 2,354.00 20211126 466979 ENG 21-6 Grandview 124002 KIMLEY-HORN AND ASSO 19723828 0 2021 11 INV P 9,452.00 20211105 466337 Engineering Service ACCOUNT TOTAL 11,806.00 26126106 6715 Grnd 2 TIF - CapInfrast 100643 BARR ENGINEERING CO 23271827.01-10 0 2021 10 INV P 425.00 20211119 466647 100643 BARR ENGINEERING CO 23271827.01-9 0 2021 10 INV P 572.50 20211029 466006 Edina LS-9 Design 997.50 100664 BRAUN INTERTEC CORPO B270007 0 2021 10 INV P 1,216.50 20211112 466473 ENG 21-6 Eden Ave/B 100995 SHORT-ELLIOT-HENDRIC 413328 0 2021 10 INV P 30,620.69 20211105 466421 ENG 21-6 Eden Ave/B 124002 KIMLEY-HORN AND ASSO 160603028-0921 0 2021 11 INV P 15,162.50 20211105 466337 ENG 21-6 Grandview 140989 S M HENTGES & SONS I 03R 0 2021 10 INV P 132,102.09 20211112 466591 ENG 21-6 Eden Avenu ACCOUNT TOTAL 180,099.28 ORG 26126106 TOTAL 191,905.28 City of Edina, MN INVOICE LIST BY GL ACCOUNT Report generated: 12/01/2021 15:03 User: LJefferson Program ID: apinvgla Page 3 YEAR/PERIOD: 2021/10 TO 2021/11 ACCOUNT/VENDOR INVOICE PO YEAR/PR TYP S CHECK RUN CHECK DESCRIPTION 26126107 50th and France 2 TIF 26126107 6131 50 & F TIF - PrfSvLegal 100730 DORSEY & WHITNEY LLP 3578164 0 2021 10 INV P 542.50 20211015 465510 ACCOUNT TOTAL 542.50 ORG 26126107 TOTAL 542.50 FUND 2600 Housing & Redvlpmt Authority TOTAL: 1,471,714.39 ** END OF REPORT - Generated by Lonnia Jefferson ** Date: December 9, 2021 Agenda Item #: VI I.A. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:R es olution 2021-14: Approving the Decertification of the S outhdale 2 Tax Increment F inancing Dis tric t Ac tion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: Approve R esolution 2021-14 approving the decertification of the Southdale 2 Tax I ncrement Financing District. I N TR O D U C TI O N: T his item pertains the the Southdale 2 T I F District. T his D istrict was established in 2012 and is scheduled to terminate in 2021. T his R esolution formally decertifies this D istrict. S taff will present a summary of the redevelopment outcomes achieved with this T I F D istrict. S taff recommends approval of this Resolution. AT TAC HME N T S: Description HRA Resolution 2021-14 Staff pres entation RESOLUTION NO. 2021-14 APPROVING THE DECERTIFICATION OF THE SOUTHDALE 2 TAX INCREMENT FINANCING DISTRICT WHEREAS, on April 17, 2012 the City of Edina (the “City”) and its Housing and Redevelopment Authority (the “HRA”) approved the establishment of the Southdale 2 Tax Increment Financing District (the “District”), an economic development district, within its Southeast Edina Redevelopment Project Area (the “Project Area”) all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.1794, inclusive, as amended (the "Act"); and WHEREAS, by Resolution 2021-079 duly adopted September 21, 2021 the City approved Modification #4 to the Southdale 2 Tax Increment Financing Plan (the “TIF Plan”); and WHEREAS, by Resolution 2021-105 duly adopted November 16, 2021 the City approved a Spending Plan for the District in accordance with the Act (the “Spending Plan”); and WHEREAS, the HRA is the administrative authority for the District; and WHEREAS, as of the date hereof the HRA anticipates that all bonds and obligations to which tax increment from the District have been pledged will be paid in full or defeased and sufficient money has been set aside to pay all other costs authorized under the TIF Plan and Spending Plan; and WHEREAS, the HRA has determined that an amount of $195,000 of tax increment from the District to be surplus remaining in excess of the costs authorized under the TIF Plan and Spending Plan; and WHEREAS, the HRA desires by this resolution to cause the decertification of the District after which all property taxes generated by property within the District will be distributed in the same manner as all other property taxes beginning January 1, 2022. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the HRA as follows: 1. HRA staff is authorized to take such action as is necessary to cause the decertification of the District, inclusive of filing a copy of this resolution in the City's District files, filing a copy of this resolution with the County Auditor of Hennepin County along with instructions to adjust the records for the District accordingly, and filing a copy of the resolution with the Minnesota Department of Revenue and the Minnesota Office of the State Auditor. 2. The HRA has determined that $195,000 in surplus tax increment revenue remains in the Southdale 2 TIF Fund in excess of the costs authorized by the TIF Plan and Spending Plan, and staff is directed to return any such surplus to Hennepin County for distribution to the taxing jurisdictions in which the District is located. Edina HRA Resolution No. 2021-14 Decertification of Southdale 2 TIF District Page 2 Approved by the Board on December 9th, 2021. ATTEST: ____________________________ James B. Hovland, Chair ____________________________ James Pierce, Secretary STATE OF MINNESOTA ) COUNTY OF HENNEPIN) SS CITY OF EDINA ) CERTIFICATE OF EXECUTIVE DIRECTOR I, the undersigned duly appointed and acting Executive Director for the Edina Housing and Redevelopment Authority do hereby certify that the attached and foregoing Resolution is a true and correct copy of the Resolution duly adopted by the Edina Housing and Redevelopment Authority at its Regular Meeting of December 9, 2021, and as recorded in the Minutes of said Regular Meeting. WITNESS my hand and seal of said City this ______________ day of ___________________, 2021. Executive Director The CITYofEDINADecertification of Southdale 2 Tax Increment Financing DistrictReport to:Edina Housing and Redevelopment AuthorityDecember 9, 2021www.EdinaMN.gov The CITYofEDINA2The Great Recession of 2008 accelerated the decline of the shopping mall and many surrounding parcelsTIF District established in 2011 to encourage redevelopment, job creation and reinvestment8-year Economic Development TIF DistrictBackground Declining Retail Area The CITYofEDINA3Southdale Center MallEconomic Decline and Growth 197 M119 M221 M3.9 M2.2 M4.0 M050,000,000100,000,000150,000,000200,000,000250,000,0002005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Estimated Market ValueTax CapacityAssessed Value The CITYofEDINA4Southdale Center MallEconomic Decline and Growth 197 M119 M221 M3.9 M2.2 M4.0 M050,000,000100,000,000150,000,000200,000,000250,000,0002005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Estimated Market ValueTax CapacityAssessed Value The CITYofEDINA518Redevelopment Projects in TIF District since 2012 N E W•PLUS many tenant remodels•AND more anticipated in future The CITYofEDINA6 The CITYofEDINAProjectProjectProjectProject Est. CostEst. CostEst. CostEst. CostTaco Bell $800k ($0 TIF)Aria Apartments $34.8M ($0 TIF)Onyx Apartments $44.9M ($0 TIF)Millennium Apartments $45.5M ($0 TIF)Bank of America $4.3M ($0 TIF)Aurora on France Senior $42.3M ($0 TIF)6565 Medical Office $19.6M ($0 TIF)6565 Medical Parking $12M ($0 TIF)ProjectProjectProjectProject Est. CostEst. CostEst. CostEst. CostSouthdale Center $45M ($5 TIF)($5 TIF)($5 TIF)($5 TIF)One Southdale Apartments$36M ($0 TIF)Homewood Suites $14.4M ($0 TIF)Shake Shack $1.8M ($0 TIF)Metro Transit Center $875k ($0 TIF)RH Gallery $15M ($0 TIF)Lifetime Fitness $26.5M ($0 TIF)Lifetime Sport & Work $16.5M ($0 TIF)Galleria East Expansion $22M ($0 TIF)Shoppes at Estelle $2.8M ($0 TIF)Additional investment was made in remodeling several offices and retail facilities ($0 TIF)7 The CITYofEDINA8TIF for affordable housing in EdinaProject NameProject NameProject NameProject Name TIF AmountTIF AmountTIF AmountTIF Amount66 West Apartments $250,000Sound on 76thApartments $2,400,000Amundson Apartments $700,0004040 70thSenior Apartments $3,650,000Metro HRA single family $2,000,000Villa Nova NOAH $350,000Total To Date = Total To Date = Total To Date = Total To Date = $9,350,000$9,350,000$9,350,000$9,350,000Additional funds available for Housing Trust Fund The CITYofEDINA9TIF for economic developmentSpending Plan approved to use unobligated funds- Support private investment- New construction or renovation- Create jobs- Fill financing gap- Deliver long-term public benefits- Approx $8.6 M available- Expires Dec. 31, 2025 The CITYofEDINA10Staff RecommendationIn accordance with Minnesota TIF Statute, staff recommends that the Southdale 2 TIF District be decertified on December 31, 2021.Staff also recommends that $195,000 be identified as “surplus” for redistribution among City, County and Schools.# # Date: December 9, 2021 Agenda Item #: VI I.B. To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:7001 F rance Ave - P roject Update regarding Tax Increment F inancing Disc ussion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: T his item is for discussion only; no action is required a this time. I N TR O D U C TI O N: T his item pertains to the potential use of tax increment financing (T I F ) to support redevelopment of the underutilized commercial site at 7001 France Avenue. T he developer has revised the site plan to better align with the current marketplace. T his updated site plan was granted preliminary zoning approvals on N ovember 16, 2021. As discussion with the H R A on August 12, 2021, the use of tax increment financing continues to be an essential part of the project financing. S taff has been meeting with the developer to better understand the financing pro forma and the long term public benefits that could be delivered with the construction of this project. S taff has prepared a general strategy for preliminary review and discussion. No formal action is required at this time. Staff seeks input regarding the potential use of public financing on this project. T his input will be incorporated in the upcoming preparation of a Term Sheet and T I F R edevelopment Agreement. AT TAC HME N T S: Description Staff Report Staff pres entation Housing & Redevelopment Authority December 9, 2021 Chair Hovland and Commissioners of the Edina Housing and Redevelopment Authority Bill Neuendorf, Economic Development Manager 7001 France – Project Update regarding Tax Increment Financing Information / Background: On May 27, 2021 and August 12, 2021, staff provided a preliminary recommendation and update regarding the use of Tax Increment Financing (TIF) to support full redevelopment of the commercial property at 7001-7025 France Avenue. Since the developer initiated financing discussions with City staff in Spring 2021, commodity prices have escalated tremendously while rents and office market demand have not kept pace. This resulted in a redesign of the site plan. Staff remains generally supportive of the use of TIF to allow this site to be fully redeveloped following a bold outlook that is consistent with the Southdale Design Experience Guidelines. The recommended details regarding the use of TIF are pending. Project Summary: The developer submitted updated site plans consistent with the expectations to re-scale the project. The office building on Site B was fully redesigned and the apartments on Site C were eliminated. The stand-alone parking structure on Site C will serve the office building and is also intended to function as shared/District parking. Compliance with the affordable housing policy will be achieved with a financial contribution to the Affordable Housing Trust Fund instead of providing affordable units on the site. This redesign provides a less dense site and lowers the total construction cost. The City Council approved the preliminary rezoning on November 16, 2021. The developer is currently pursuing equity investors and reviewing the best options for construction and long-term debt to fund the project. As anticipated, they have requested that TIF be pledged as part of the capital stack to support a bold redevelopment vision for this prominent site. STAFF REPORT - 7001 France – Project Update regarding TIF Page 2 Public Benefits Achieved with TIF Participation There is a wide array of public benefits potentially delivered on the site with the pledge of future TIF support. The developer indicates that without a full TIF pledge, this project is unable to move forward. The public benefits include:  First project to subdivide a “superblock” and create a more walkable district with four building pads surrounded by public realm space o New public sidewalks o New public streetscaping with public art and street furniture o New landscaping o Dedicated public easements  First Class A office building in 30 years o Office space specifically designed for a post-pandemic economy o Public plaza with public art and street furniture o Job creation and attraction  New structured parking for shared use o Short-term and long-term use for the general public o Vehicle and bicycle parking o Subject to reasonable time limits and other regulations o Possibility for future land ownership if parking structure no longer needed  First project to abide by new sustainability policy o LEED and/or Park Smart designations o Commitment to on-site solar energy generation o Improvement to storm water system  Other typical benefits (not related to TIF pledge) o Park dedication fees paid to City o SAC/WAC fees paid to City o Contribution to affordable housing trust fund o Long term investment to enhance the tax base for generations to come Staff Recommendation and Request for Direction Staff remains generally supportive of pledging TIF to make this massive investment and bold vision viable. Abiding by Edina’s policy and practice of using TIF to deliver long-term public benefits, an updated Public Financing Strategy has been prepared for consideration (attached). Many of the details are still being discussed. Staff is proceeding cautiously to avoid setting an expectation that TIF will be used on all future projects that strive to comply with the Southdale Design Experience Guidelines. Staff is also being cautious due to the speculative nature of this project. Full consider of TIF is being withheld until the developer creates the capital stack and is on track to lock in the best investment conditions from the private sector. TIF could then be used to fill in the remaining financial gap. Guidance is requested before a TIF Term Sheet is prepared. STAFF REPORT - 7001 France – Project Update regarding TIF Page 3 Discussion Questions: Staff seeks guidance from the HRA Board regarding the potential use of public financing for this project. Input is required before staff proceeds with preparation of a complete Term Sheet. This input is important so that the developer has a good understanding on how to proceed with this proposed project. 1) Is the HRA Board satisfied with the overall degree of public benefit potentially delivered by this project? 2) Is HRA Board comfortable pledging up to 15 years of incremental taxes ($20 to $23.5 million) and not to exceed 10% of total development costs to support this redevelopment concept? STAFF REPORT - 7001 France – Project Update regarding TIF Page 4 UPDATED REDEVELOPMENT AND PUBLIC FINANCING STRATEGY 7001 FRANCE AVENUE FOR DISCUSSION ONLY 1) Establish one new TIF District a. Maximum 15-year Renovation District b. Subject to HRA and City Council review after public hearings 2) Prepare Term Sheet in pre-development phase (Q1 2022) 3) Prepare TIF Agreement based on approved terms after equity in place (Q1-Q2 2022) 4) Developer to bear all financial risk, including pre-development costs, equity investment and debt, and construction-related contracts 5) No direct TIF support for the single story bank building (Site D) 6) No direct TIF support for the private elements of the luxury residential high rise (Site A) 7) No direct TIF support for the private elements of commercial high rise (Site B). 8) No direct TIF support for private parking 9) Project delivered must be the same scale as approved in November 2021 zoning documents as measured by square footage, number of units, and caliber of design and construction a. Three market rate elements (Sites A, B, & C) b. Minor architectural or engineering revisions are acceptable provided approval granted by City staff, Planning Commission and/or City Council as appropriate c. Any major change in project scope is subject to re-evaluation and reconsideration of TIF terms 10) Issue TIF Note(s) upon final completion of Sites A, B, & C. Each building shell must be completed and be capable of occupancy. Note(s) will be withheld until the site is completed and all documentation verified by City staff and recorded. The Note(s) may be issued prior to full occupancy of each completed building. 11) Notes to be pay-as-you-go and interest bearing. A single or multiple TIF Notes may be issued. 12) Notes to be sized upon certification of final development costs, including appropriate use of contingency funds and total grant funds received. STAFF REPORT - 7001 France – Project Update regarding TIF Page 5 13) Minnesota Statutes identify a wide variety of construction expenses that are potentially eligible for TIF. Staff recommends that only a subset of these potentially eligible costs be recognized as reimbursable. 14) TIF Assistance should be considered in an amount not to exceed the estimated cost to deliver exceptional public benefits on the site. The recognized public benefits include:  Designing, clearing, subdividing and preparing the large site to deliver four separate building pads in a walkable environment that accommodates cars, bicycles and pedestrians  Public realm improvements including sidewalks, streetscaping, landscaping, lighting, public art, public plazas, and public seating areas  Delivering shared public parking that is owned and maintained by the developer  Possible future conveyance of parking structure land for public use and benefit  Incorporating renewal energy and other sustainability design elements to reduce the carbon footprint of the site  Constructing high quality commercial and multi-family non-combustible structures that will enhance the property tax base for many decades 15) The approximate cost of items that are recognized by TIF Statutes and deliver long-term public benefits are summarized below. Description of costs that yield public benefit Approx Cost 1 Demolition of existing obsolete structures TBD 2 Remediation of environmental contamination TBD 3 Site improvements to achieve the 4 parcel arrangement, including soil stabilization, water table impacts, general site preparation, utilities, France & 70th street improvements, internal roads, surface parking, driveways, sidewalks, landscaping and streetscaping, etc TBD 4 Public plaza and other public easement improvements, including public art in multiple public realm locations TBD 5 Public parking structure – open air, sloped floor, pre-cast concrete TBD 6 Professional costs to prepare TIF study, plan and agreements TBD Total = approximately $20 to $25 million CURRENT ESTIMATE IS $23.5 M STAFF REPORT - 7001 France – Project Update regarding TIF Page 6 16) The total principle amount of TIF Notes is currently anticipated to be in the range of $20 to $25 million. The final sizing of the TIF Note(s) will be fully articulated in the TIF Term Sheet and TIF Redevelopment Agreement. 17) The TIF Note(s) will also be subject to the following limitations: a. TIF Assistance shall not exceed 10% of actual total Site A, B & C development costs. Costs for Site D bank, including proportional share of site preparation costs, are not eligible. b. TIF Note(s) will be sized at time of Certificate of Completion upon verification the anticipated stabilized project returns do not exceed typical market rate returns. These are currently anticipated to be approximately 6.00% return on cost for Site A (residential building) and market-based (7.50 to 8.50% return on cost for Site B (commercial building). 18) TIF payments will be subject to lookback/clawback provisions at the earlier of (a) sale of any element or (b) 10-12 years into the term of the TIF District to reduce TIF payments should the project generate above-market returns (to be defined in Term Sheet) 19) Throughout the process of sizing the TIF Notes and making TIF payments, the developer must continue to confirm that the “But For” finding is satisfied and that a project of this scale, scope and caliber would not be possible without TIF Assistance. 20) Fees charged by developers and affiliated companies must be typical for the service delivered 21) The project pro forma must include reasonable contingency funds for a project of this scale. Final use of contingency funds must be focused on delivering the project of the anticipated scope, scale and quality. Contingency funds may not be used to solely increase developer or contractor profit. Contingency funds may not be used to upgrade interior or exterior finishes, including furniture and fixtures (FFE) beyond a level typical for this market-based project. 22) Developer to identify equity partners prior to preparation of TIF Redevelopment Agreement. Final approval of this Agreement will be withheld until proof of financing is in place. 23) Developer to provide permanent public easements at no expense to the City on the public parking structure, public plaza and other perimeter and interior area used to traverse the site. a. Developer to maintain these easement areas and the constructed improvements in good condition, including future repair and replacement. b. Developer can apply reasonable rules and regulations on the public parking and public plaza including restrictions on the hours of operation, prohibit use for purposes detrimental to the operations of the adjacent private buildings (ie loud noise, unruly behavior) and limit the time a vehicle can be parked in public stalls without paying. Rules and regulations subject to acceptance by City Manager. STAFF REPORT - 7001 France – Project Update regarding TIF Page 7 24) Staff Note: This item is still under discussion. [Developer to convert public easement on Site C to fee title land ownership with long term land lease for parking structure. Lease would terminate when parking structure is determined to no longer be needed or viable. Developer to be responsible for maintenance and operations during the lease period.] 25) Developer must make reasonable efforts to obtain grants in 2022 cycle from Hennepin County, Metropolitan Council and State of Minnesota as a condition of TIF support. a. Developer shall be responsible to abide by the terms of applicable grant programs. b. Grant proceeds to be reflected in the final Sources and Uses calculation c. The final sizing of TIF Note(s) is anticipated to be reduced by the level of grant funds received. d. Developer to bear the cost of preparing the grant applications, including an administrative fee for each grant application and each grant award to the City for review and monitoring 26) Developer to bear financial responsibility for all third-party costs incurred by City/HRA related to this TIF request. END The CITYofEDINA7001-7025 France AvenueRequest for Tax Increment FinancingProject UpdateReport to:Edina Housing & Redevelopment AuthorityDecember 9, 2021www.EdinaMN.gov The CITYofEDINARevised Site Plans2Site BOfficeSite AResidentialSite CParking The CITYofEDINARevised Site Plans3 The CITYofEDINARevised Site Plans4 The CITYofEDINARevised Site Plans5 The CITYofEDINARevised Site Plans6 The CITYofEDINAPreliminary Financing Strategy-Public Benefits Delivered7•FIRST project to abide by new Sustainability Policy•- LEED and ParkSmart•- EV chargers•- PV solar energy•FIRST project to subdivide superblock per new Southdale Design Experience Guidelines•- walkable street grid•- public sidewalks•- public street furniture•- public art•- public landscaping•- public easements The CITYofEDINAPreliminary Financing Strategy-Public Benefits Delivered8•NEW structured parking for shared use•- public easement (limited)•- possible conversion to fee title ownership if parking no longer needed•Other Contributions•- property tax base•- park dedication fees•- housing trust fund•FIRST new office building in 20+ years•- Class A•- post-pandemic design•- attract new tenants and new employees•- job creation The CITYofEDINAPreliminary Financing Strategy-Expenses NOT eligible for TIF reimbursement9Description of InDescription of InDescription of InDescription of In----eligible Workeligible Workeligible Workeligible WorkA Private (executive) parking for office buildingB Private (residential) parking for residential high riseC Construction costs of office buildingD Construction costs of luxury high riseE Design & other soft costs of private buildingsF Any costs of the single-story banknoT I Fused for these items The CITYofEDINAPreliminary Financing Strategy-TIF eligible expenses considered for reimbursement10Description of WorkDescription of WorkDescription of WorkDescription of Work ApproxApproxApproxApprox CostCostCostCost1 Demolition of obsolete buildings TBD2 Remediation of contamination TBD3 Site improvements to achieve 4 pad layout TBD4 Public plazaTBD5 Public parking – stand-alone structure TBD6 Professional costs related to TIF agreement TBDApprox. Total = $20 to 25 MApprox. Total = $20 to 25 MApprox. Total = $20 to 25 MApprox. Total = $20 to 25 MCurrent Estimate is $23.5 MCurrent Estimate is $23.5 MCurrent Estimate is $23.5 MCurrent Estimate is $23.5 M The CITYofEDINASummary111)Staff generally supportive of using TIF to achieve compliance with Southdale Design Guidelines2)Staff being cautious to use TIF sparingly, to deliver outstanding long term public benefit and to supplement the best possible private financing termsStaff seeks input and guidance from the HRA Board before it proceeds with preparation of TIF Term Sheet and TIF Redevelopment Agreement The CITYofEDINADiscussion Questions1)Is the HRA Board satisfied with the overall degree of public benefit delivered by this project?2)Is HRA Board comfortable pledging up to 15 years of incremental taxes ($20 to $23.5 million) and not to exceed 10% of total development costs to support this type of redevelopment concept?12 Date: December 9, 2021 Agenda Item #: VI I.C . To:C hair & C ommis s ioners of the Edina HR A Item Type: R eport / R ecommendation F rom:Bill Neuendorf, Economic Development Manager Item Activity: Subject:MO T I O N TO C LO S E S ES S I O N: as permitted by MS . 13D.05 subdivision 3 to disc uss the potential S ale of R eal P roperty located at 5146 Eden Avenue. Disc ussion Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: No action required; for discussion only. I N TR O D U C TI O N: T his item pertains to the potential sale of a portion of the vacant property to be used as a restaurant with indoor and outdoor seating. T he H R A's land broker, F rauenshuh C ompanies, will update the H R A Board on the negotiations with J ester C oncepts. Due to the sensitive nature of real estate negotiations, this discussion will take place in a closed section as permitted by M innesota Statute 13D .05 subdivision 3. N o action will take place during this closed meeting. AT TAC HME N T S: Description Date: December 9, 2021 Agenda Item #: VI I.D. To:C hair & C ommis s ioners of the Edina HR A Item Type: O ther F rom:Liz O ls on, Administrative S upport S pecialist Item Activity: Subject:Motion to move back into open s es s ion. Action Edina Housing and Redevelopment Authority Established 1974 C ITY O F E D IN A HO US I NG & R EDEVELO P MENT AUT HO R I T Y 4801 West 50th Street Edina, MN 55424 www.edinamn.gov A C TI O N R EQ U ES TED: M otion to move back into open session. I N TR O D U C TI O N: