HomeMy WebLinkAbout2022-12-20 HRA Special Meeting PacketAg enda
E dina H ousing and R edevelopm ent Author ity
City of E dina, Minnesota
City Hall, Council Chambers
Tuesday, Decem ber 20, 2022
7:00 PMSpecial Meeting - Im m ediately following the City Council Meeting
Watch the m eeting on cable TV or at EdinaMN.gov/LiveMeeting s or
Facebook.com /EdinaMN.
To Participate in Com munity Com ment or Public Hearings
Call 786-496-5601
E nter Conference PIN 3694853#
Press *1 on your telephone keypad when you would like to get in the queue to speak.
An operator will introduce you when it is your turn.
I.Call to Ord er
II.Roll Call
III.Ap p roval of Meetin g Agen d a
IV.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.
V.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.Approve Ta x In crem ent Fin ancing Policy
VI.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 No. 2022-11, Settin g 2023 Tax Levy a n d Adop tin g 2023 Operating
Budget
VII.Executive Director's Com m ents
VIII.HRA Com m issioners' Com m en ts
IX.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 20, 2022 Agenda Item #: V.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:Approve Tax Inc rement F inanc ing P olic y 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 the updated Tax Increment F inancing P olicy.
I N TR O D U C TI O N:
T he T I F policy was approved by the H ousing and Redevelopment Authority (H R A) on N ovember 17, 2022.
T he City Council requested that a few non-technical clarifications be provided at this time.
T he policy is proposed to be updated to clarify the expectations for site plans in all districts of the city (not just
Greater S outhdale) and to clearly articulate that T I F can also be used by the C ity to fund eligible public
infrastructure improvements.
A red-line comparison is shown to readily identify the changes.
S taff recommends that the updated policy be approved by H R A for immediate implementation.
AT TAC HME N T S:
Description
TIF policy 12-20-2022
TIF policy redline compared to 11-17-2022 version
☒City Council Approved: 2011
☐City-Wide Revised: 12/20/2022
☐Department
City of Edina Policy
Tax Increment Financing Policy
BACKGROUND
The City of Edina has statutory authority to use Tax Increment Financing (TIF) pursuant to Minnesota State
Statutes Section 469.174-469.1799 (the TIF Act). TIF uses the increased property taxes generated by new real
estate development within defined geographic districts to pay for certain costs associated with new development
(including but not limited to affordable housing) as well as related public infrastructure and public realm spaces.
The City’s mission is “…to provide effective and valued public services, maintain a sound public infrastructure,
offer premier public facilities and guide the development and redevelopment of lands, all in a manner that sustains
and improves the health and uncommonly high quality of life enjoyed by our residents and businesses.” (Source:
2015 Vision Edina).
The land within the City boundaries has been substantially built-out for more than a decade and many of the older
properties are in the “redevelopment” phase. In order to construct a new structure, an older structure that is
unsound, outdated, or obsolete must typically be removed.
In most cases, development projects in Edina are privately funded using traditional debt and equity sources. From
time-to-time, however, the City has found it necessary to provide financial support for development projects that
deliver outstanding benefits to the community and that could not be accomplished without public financial
involvement.
As early as the 1970s, the City used TIF to help deliver desired commercial and multifamily development served
by public infrastructure elements including roads, sidewalks, utilities, public parking, and public realm spaces like
parks and plazas. TIF was essential to construct the commercial, residential and public elements at Edinborough
Park and Centennial Lakes Park (including affordable housing). TIF was also essential to fund public parking at 50th
and France and to transform the Grandview District from an industrial area to a mixture of residential,
commercial and civic uses with public parking. Historically, Edina has taken a more restrictive view on the use of
TIF than allowed by Minnesota Statute.
City of Edina
Tax Increment Financing Policy
Page 2
PURPOSE OF POLICY
While most redevelopment projects in Edina are privately financed, on certain occasions, the City may
find it necessary to provide financial support in order to overcome unusual hurdles and to achieve
extraordinary benefits to the general public. The purpose of this policy is to:
Limit the use of TIF to only projects that deliver permanent benefits to the general public that are better than
the minimum established in City Code
Clarify that the use of TIF in Edina will be more limited than allowed by Minnesota Statute
Establish criteria and guidelines for where new TIF Districts are established and how incremental taxes are
utilized in Edina.
Ensure that TIF is used in a transparent, consistent and equitable manner to provide value to the community.
Ensure that TIF is used to deliver both short-term and long-term improvements that are a benefit to the
general public in Edina.
This policy provides guidance to developers, property owners, staff, and the community at large regarding Edina’s
use of Tax Increment Financing as a public finance tool to attract and support high quality development that
contributes to a strong property tax base and to the high quality of life in Edina. For the purpose of this policy, the
“City” shall also mean the Edina Housing and Redevelopment Authority (HRA), which assists in a variety of
housing, redevelopment, and economic development activities for the City of Edina.
PUBLIC BENEFITS PURSUED WITH TIF
In addition to the Minnesota TIF Statutes, Edina applies an additional expectation that the use of TIF will deliver
permanent benefits to the general public other than tax base growth. Edina’s Comprehensive Plan establishes
guidance for the anticipated changes in land use and related systems for the next decade. Most land use changes
are anticipated to occur in commercial and industrial areas. Many of the preferred outcomes identified in the
Comprehensive Plan include changes to transform single use sites to mixed uses that provide a strong tax base,
improved connectivity and access for drivers, bicyclists and pedestrians. When necessary, TIF can be used to
achieve many benefits to the community, including:
Transformational change of properties in a manner compatible with Comprehensive Plan, Small Area
Plans, Development Framework, Sustainability Policy, New Multifamily Affordable Housing Policy and
other Guidelines adopted by the City
Improvements to the multi-modal transportation network, including roads and infrastructure for motor
vehicles, pedestrians, bicyclists and transit
City of Edina
Tax Increment Financing Policy
Page 3
Public realm improvements, including green space and placemaking elements including landscaping,
streetscaping and public art
Public parking facilities that provide shared parking resources for more than one property
Improvements to public utility networks; including potable water, fire protection, storm sewer and
sanitary sewer
Stormwater retention and detention systems that benefit more than one property
Removal of substandard buildings (as defined in MN Statute) that may have a blighting effect on the
community
Preservation of buildings that are historically or culturally significant to the community
Remediation of environmental contamination
Creation and retention of long-term affordable housing at a variety of below-market price points
Creation and retention of permanent employment opportunities
I. PROCEDURAL CONSIDERATION OF TIF
1) Authority rests with City Council. Consideration to establish a new TIF District shall be at the sole
discretion of the City Council. Administration and determine of specific uses of incremental property
taxes generated therein shall be at the discretion of the City Council or HRA. Since each development
project is unique, the use of TIF shall be considered on a case-by-case basis.
2) Preparation of TIF documents. The Edina Housing and Redevelopment Authority shall provide initial
direction regarding the potential use of TIF, shall review the Term Sheet that identifies the proposed use
of TIF on each project and shall review and approve the contractual documents such as TIF Agreements.
3) Eligible Applicants. Only current property owners or developers that have site control are eligible to apply
for TIF. Evidence of site control shall be provided in the TIF Application.
4) Negotiation of TIF terms. After the TIF Application is submitted, the developer shall negotiate financing
terms only with the City Manager, HRA Executive Director or designee. The prepared terms and
proposed contract shall then be presented to the HRA Board and the City Council as a whole.
5) Application Form. Developers that request TIF shall submit a completed application in a form approved by
the City Manager or HRA Executive Director. The application shall identify the anticipated financing
sources, including equity, type of debt, external grants/contributions, and the amount and type of TIF
support requested to resolve the financing gap. A complete development sources and uses pro forma shall
City of Edina
Tax Increment Financing Policy
Page 4
be submitted, as well as an operating pro forma based on a stabilized project. The application shall include
calculations that identify the financing gap. This information is required to determine the “but for” test
required under the TIF Act. The application shall also identify extra-ordinary costs to develop the project
in Edina and shall also identify the exceptional public benefits that could be delivered if the project is
completed. The Application shall also address other criteria identified in this document.
6) Application Fee. The application fee shall be $10,000. Fifty percent (50%) of the fee shall accompany the
initial application. The remaining fifty percent (50%) shall be due after the confirmation of a Term Sheet
and prior to the preparation of full contractual documents. Application fees are non-refundable.
7) Use of Third-party Expert Advisors. Expert advisors shall be engaged by the HRA as necessary to ensure
compliance with the TIF Act and to provide expertise to supplement the abilities and capacity of staff.
Typical advisors have expertise in TIF law, public sector development finance, general development
finance, property inspection as it pertains to TIF, and real estate valuation, among other redevelopment
topics. All advisors shall be contracted to the HRA and shall uphold the interests of the HRA and the City
while providing service.
8) Developer Responsible for Fees. The developer shall be solely responsible for the payment of third
expenses pertaining to the developer’s request for TIF support from the time of the request to the
delivery of the Certificate of Completion. Prior to preparation of the Term Sheet, the applicant shall
submit to the City a deposit equal to the total estimated costs for legal and consultant fees. These funds
will be held in a non-interest-bearing escrow and the City will draw upon these funds to pay all related
expenses. Additional funds may be necessary if the scope of the work changes beyond the initial
expectation. Any unused balance shall be returned to the developer upon completion of the process. The
developer shall also be solely responsible for any costs related to requested amendments to the TIF
District or TIF Agreements.
9) Initial Staff Response and Notification of HRA Board. City staff shall review and evaluate the Application
for compliance with the City’s policies. Soon after receipt of a TIF Application, staff should advise the
Edina HRA about the TIF request including the potential public benefits delivered if TIF would be
provided. Staff will then seek approval to engage third party advisors to fully vet the merits of the TIF
request.
10) Preparation of Term Sheet. Staff shall prepare a Term Sheet that summarizes the key terms by which TIF
could be used for the project. The Term Sheet shall be submitted to the Edina HRA for review and
consideration. The Term Sheet should generally be considered simultaneously or soon after preliminary
zoning approval is obtained. The HRA should provide verbal indication whether they are agreeable to
preparation of binding contracts (commonly known as TIF Agreements) based on the Term Sheet.
11) Creation of TIF District. After consideration of the Term Sheet, staff shall begin the process of establishing
a TIF District to achieve the goals outlined in the Term Sheet.
City of Edina
Tax Increment Financing Policy
Page 5
12) TIF Agreement. Staff shall work with legal and financial advisors to prepare complete and binding legal
agreements based on the Term Sheet. The TIF Agreement should be considered by the HRA Board
and/or the City Council after final zoning approval is obtained.
13) Building and Zoning Approvals. The provision of TIF is contingent upon receiving all other necessary
project approvals from the City.
II. FINANCIAL REPORTING AND TRANSPARENCY
1) Mandatory Reporting. The City shall submit all required reports on the use of Tax Increment Financing to
Hennepin County and the Minnesota Office of the State Auditor using the format provided by those agencies.
2) Year in Review Report. Each year, staff shall publish a report that summarizes the use of TIF written in plain
English style. This report shall include the following information for each active TIF District: start and end
dates, debt and contractual obligations, tax collection status, tax base status, and other pertinent information.
This report shall also quantify outcomes when TIF is used to achieve public benefits. This report should be
delivered to the Edina HRA in January and shall be made available to the applicable School District(s) and to
the general public upon request.
3) Website. The City shall post general information on the use of TIF in Edina on the City website.
III. ESTABLISHMENT OF TIF DISTRICTS
1) Preparation of TIF Plan. The HRA’s Financial Advisor shall prepare the TIF Plan to satisfy the requirements of
Minnesota TIF Statutes. The TIF Plan should be written in plain English style. The TIF Plan should describe the
intended redevelopment and/or housing outcomes and should identify how the use of TIF will help achieve
community goals as defined in the Comprehensive Plan and related plans.
2) Type of District. The type of District established shall be determined by the City Council in accordance with
the limitations contained in Minnesota Statute.
3) Boundaries and Term. The boundaries of each new district should be as small as necessary to achieve the
development goals of the subject properties and adjacent public areas. When establishing a new TIF District,
the shortest statutory term to achieve the desired outcomes should be considered. A longer term should be
considered when pooling is desired.
4) Impact on Municipal Services. The impact of the proposed project on the City’s delivery of services, capital
expenditures and operating expenditures shall be taken into consideration prior to the adoption of a TIF Plan.
5) Fiscal Disparities. Projects utilizing TIF are responsible for paying their share of the Fiscal Disparities
contribution from the property taxes generated from the project and within the boundaries of the District.
City of Edina
Tax Increment Financing Policy
Page 6
6) Community engagement. The City shall follow standard protocol and processes for collecting community
input on every proposed TIF district. At a minimum, this typically includes advance notice, online engagement
and in person public meetings.
7) Input from School District and County. A draft of the TIF plan shall be provided to Hennepin County and to
the school district where the district is located for review and comment prior to the public hearing.
8) Establishment of District. Unless unique circumstances apply, establishment of a TIF District should coincide
with the execution of one or more TIF Agreements capable of satisfying the outcomes identified in the TIF
Plan.
9) Early De-certification. Within one year after the 5-year statutory deadline, the City should consider early
decertification of the District if no debts or contractual obligations for the incremental taxes remain. Within
one year after all debts and obligations have been satisfied, the City should consider whether to de-certify the
District early. Consideration should be given to the potential benefits from pooling available funds before the
District is de-certified.
IV. EXPECTATIONS FOR TIF SUPPORTED REDEVELOPMENT PROJECTS
1) Site Plan. The site plan for any project supported with TIF shall be designed to substantially follow the
regulations and guidelines as adopted in Edina’s Comprehensive Plan, Small Area Plans, Development
Framework and Southdale Design Experience Guidelines (where applicable). The expected quality and nature
of site plan improvements is highest when TIF is contributed. Projects supported with TIF shall fully satisfy
each of the following aspects as described in adopted plans and guidelines and as approved through the City’s
typical zoning review / site plan review process:
a. Subdivision of superblocks to establish a transportation grid with walkable, human-scale blocks
appropriate for the size, length and width of the property
b. Creation of new streets, sidewalks and trails to allow through traffic by the general public (recognizing
that redevelopment of neighboring parcels may be necessary to complete the through route)
c. Creation of new public realm spaces including streetscaping, lighting and public art
d. Minimum building setbacks (such as 30 ft and 50 ft in the Greater Southdale District) should be
considered “build to” lines
e. Applicable street room typologies implemented
f. Massing, recessed upper floors, building articulation, and fenestration provided
g. Perimeter spaces that front a public street or similar route with public easement shall be occupiable and
activated. Storage, parking, and utility spaces shall be kept to the bare minimum along public routes
City of Edina
Tax Increment Financing Policy
Page 7
The provisions of this policy are not intended to require an additional site plan review process. The City
Council shall make the final determination of whether the site plans adequately abide by the Comprehensive
Plan and other adopted codes, plans and guidelines to warrant the use of TIF.
2) Exterior Finish Materials. The types of finish materials on portions of the building directly visible from a street
or other public realm space shall comply with Edina’s City Code. For TIF supported projects, a high degree of
stone, brick and other natural materials is preferred.
3) Public Realm Experience. A vibrant and welcoming public realm experience is essential for every project
supported with TIF. Examples of contributing elements include (but are not limited to): sidewalks wider than
required by City Code, public plaza, public seating areas, integrated transit shelters, landscaping, hardscaping,
commercial storefronts and residential walk-up units that directly engage the public realm areas. Under the TIF
Act, reimbursement through TIF for public realm amenities will need to be reviewed on a case-by-case basis,
but will be required even if not subject to TIF reimbursement.
4) Public Art. Projects supported with TIF shall incorporate permanent public art as an integral part of the public
realm experience. Each public art installation shall be secured with an easement that provides for the
maintenance and permanence of the art element by the owner. The public art elements shall be consistent with
those contained in the approved site plans. Additional art elements may be required when TIF is contributed.
Examples of additional art elements include but are not limited to: sculptures, murals, sidewalk poetry, water
features, light and sound displays, and rotating art installations. City Council shall make the final determination of
whether the quantity and type of public art elements warrant the use of TIF. Under the TIF Act, reimbursement
through TIF for public art will need to be reviewed on a case-by-case basis, but public art will be required even if
not subject to TIF reimbursement.
Members from the Edina community shall be engaged as part of the artist-selection process and/or the art-
selection process. The developer shall make the final art selection keeping in mind the recommendation and
input from the community members.
5) Public dedication or public easements. All public benefits in TIF supported projects shall either be owned by the
City or HRA, dedicated to the City or be secured with permanent easements (to the City) or restrictive
covenants to ensure that the public has long-term access to and long-lasting benefits from the improvements.
6) Affordable Housing Units. Multi-family development projects supported with TIF should incorporate any
required affordable units into the site, as opposed to providing the prescribed contribution to Edina’s
Affordable Housing Trust Fund.
7) Public Parking. Only those parking stalls that are available to the general public throughout all times of the day
and year shall be considered to be supported with TIF. Parking stalls that are dedicated for the exclusive use by
residents or tenants will not be eligible for TIF support. The public parking stalls shall be easily identified as
public parking with exterior signage near the entrance and wayfinding signage on the site.
8) Environmental Sustainability. Edina’s Sustainable Buildings Policy shall apply to all projects supported with TIF.
For TIF-supported projects, the applicable Sustainable Building Rating System shall be LEED Silver or better.
Additionally, electrification of heating systems and/or on-site renewable energy generation are preferred in TIF-
City of Edina
Tax Increment Financing Policy
Page 8
supported projects; projects should achieve at least 2 total LEED points between Grid Harmonization and
Renewable Energy credits. Certification of the completed building(s) shall be required and compliance shall be
renewed (by the owner) throughout at least the term of the TIF District at the frequency identified by the
certifying agency.
9) Collaborative Partnerships. The developer should engage local neighborhood groups and other community and
regional organizations to provide the highest reasonable level of collaboration to ensure a successful project.
Community partners could include business and trade associations, private and non-profit groups and
associations, governmental agencies and similar stakeholders and benefactors. Evidence of effective engagement
should be provided in the TIF Application. This collaborative approach is also helpful to secure grants from
other agencies.
10) Mitigation of Construction Disruption. As part of the Go-Ahead letter by which the developer commits to
proceed with the project and prior to the site preparation and construction, a Construction Mitigation Plan
(CMP) shall be submitted to the City that identifies the developer’s and general contractor’s strategies to
address the inconveniences that occur to the neighbors and general public during the construction period.
Topics to be addressed in CMP include: milestones and methods to provide advance notice to neighbors; off-
street parking for contractors and suppliers; delivery routes for construction vehicles; queuing locations for
large vehicles serving the construction site; temporary street, lane or sidewalk closures; temporary detours for
vehicles, pedestrians, bicycles and transit vehicles; construction site security; and strategies to mitigate dust,
vibrations and noise. The CMP must also identify the responsible person to be contacted by neighbors when
questions or problems occur. Phone number and email address of the responsible job site person shall be made
available.
11) Fair Labor standards. The developer and general contractor shall certify that all applicable state and federal
labor laws have been satisfied and shall allow third party inspections or other means of confirming compliance.
Failure to comply with applicable state and federal labor laws shall be considered a default with appropriate
penalties.
12) Actions to Promote Diversity and Equity in Redevelopment. The development and construction of projects
with TIF support shall include best efforts by the developer and general contractor to provide employment
opportunities for people that are under-represented in the construction field, including women and people of
color. Similar efforts shall be made to structure contracts so that businesses owned by people under-
represented in the construction industry (including majority women-owned, majority minority owned, certified
MBE, WBE and VBE) have a fair and realistic opportunity to provide goods and services to the project.
The developer’s plan and strategy to achieve these goals (commonly referred to as Equity and Inclusion
Outreach Plan or EIOP) shall be included in the TIF Agreement. The plan shall identify employment and
contracting goals for women and people of color. The plan must also include an intentional strategy to pursue
and achieve these goals to the greatest extent practical. The plan shall also include the developer’s and general
contractor’s practices to pursue equity, including how they participate in workforce development programs and
similar activities in the Twin Cities.
City of Edina
Tax Increment Financing Policy
Page 9
Standards and recommendations from State of Minnesota Department of Human Rights, Hennepin County and
similar local and regional agencies and trade associations shall be considered as guidance when identifying these
goals and strategies.
As a condition of the Certificate of Completion, the developer shall report on the implementation of the plan
as well as the outcomes. Penalties shall apply when the developer fails to make a good faith effort to implement
this plan.
V. USE OF TIF IN EDINA
1) TIF to deliver public benefits. TIF will only be used to enable a developer to complete a project that delivers
exceptional public benefits. An increase in property tax base alone is not sufficient to warrant the use of TIF.
TIF shall also be used as a means to finance public infrastructure improvements carried out by the City.
2) “But for” Test. Any use of TIF shall be subject to the “but for” test as prescribed in Minnesota Statute; meaning
that “but for” the use of TIF, a project of the size, scale and quality proposed would not occur. The public
benefits delivered by the project would also not occur on the site without the use of TIF.
3) Final Site Plan Approvals. Requests for TIF support after preliminary zoning has been granted may result in
changes to the preliminary site plan to comply with this TIF policy. Any delays or costs due to a re-review are
the sole responsibility of the developer.
4) Financial Gap. TIF should only be considered to fill a financial gap that is unable to be satisfied by traditional
equity and debt sources. TIF assistance will not be provided to projects that have the financial feasibility to
proceed without the use of TIF. TIF will not be provided solely to provide an excessive contingency to the
project or broaden a developer’s profit margins on a project.
5) Developer’s Capital Stack. TIF should be considered the last money into the deal for market-rate projects
provided with TIF support. This includes multi-family housing where 20% or fewer of the units are affordably
priced in accordance with Edina’s multifamily affordable housing policy.
6) Pay as You Go TIF Notes. TIF should only be provided to developers of market-rate projects on a pay-as-you-
go basis. In certain cases, up-front or other forms of assistance may be considered by the City but will be at the
sole discretion of the City Council or HRA. Bonding or any other appropriate means of financing, supported
with TIF revenue should be used by the City to carry out public infrastructure improvements within the TIF
District.
7) Interest Rate. The interest paid on TIF Notes shall be consistent with the typical interest rate paid in the
marketplace for the type of project. The interest rate paid on the TIF Note should not exceed the interest rate
underwritten for the permanent financing.
City of Edina
Tax Increment Financing Policy
Page 10
8) Deviations from Policy. The City reserves the right to approve or reject the use of TIF, the amount of TIF, and
the total term, on a case by case basis, taking into consideration established policies, project criteria, and
demand on services in relation to the potential benefits from the project. Deviations from this policy shall be
allowed if specifically approved by the City Council or HRA.
9) Impact on City Services. TIF will not be used to support development projects that place excessive demands on
municipal services or other capital or operating expenditures of the City.
10) Financial Analysis. The applicant shall provide to the City and its financial advisor all information necessary to
conduct a financial analysis of the proposed project. This information must be complete and accurate.
Falsification or manipulation of the financial information shall be terms for immediate disqualification of
consideration.
11) Financial Returns to Developer. The financial returns to the developer shall be within the typical industry
norms for the type and scale of the project. The use of TIF shall be limited to increasing the returns to the
lower level of the normal range.
12) Projections of Incremental Taxes. The Financial Advisor shall use realistic projections for the value of
incremental taxes generated over time. The amount of TIF pledged shall not exceed the amount projected to
be generated from the completed project.
13) Access to Complete Site and Project Information. Prior to approval of the Term Sheet, the developer shall
provide any surveys, required market and financial feasibility studies, appraisals, environmental studies, soil
boring information for the project, and other information or data that the City or its legal and financial
consultants may require in order to proceed with an independent underwriting. Such information is subject to
the Minnesota Government Data Practices Act and may be public information at the time of submission.
Proprietary information will be kept non-public to the extent allowed by Minnesota statute.
14) Financial Guarantees. In the event that a type of TIF support other than Pay-as-you-go Note is used, the
developer shall provide adequate financial guarantees to ensure completion of the project and the repayment of
the tax increment financing in the event that the project fails to be completed. Types off guarantees may include,
but are not limited to, assessment agreements, insurance, letters of credit, etc.
15) Developer experience and capacity. Any developer requesting TIF shall demonstrate past success in real estate
development as well as specific capability in the type and scale of development proposed. As part of the TIF
Application, the developer shall submit a list of critical members of the development team that identifies
professional qualifications and references.
16) Inflated Fees not acceptable. The developer fees, soft costs and operating expenses included in the pro forma
must be reasonable and typical for the industry. Inflated fees, unreasonable expense categories and excessive
contingencies will not be accepted.
City of Edina
Tax Increment Financing Policy
Page 11
17) Look back. The TIF agreement will include “look back” provisions to ensure that the TIF was actually needed
and shall include early termination of TIF Note payments and/or “claw back” provisions if it is determined that
TIF was not needed at the level identified in the TIF Agreement. The clawback provision may be waived for tax-
credit and similar affordable housing developments.
18) Real Estate Transactions. TIF shall not be used when land acquisition costs exceed market land costs.
Acquisition costs shall be scrutinized to ensure that the purchase price is fair and reasonable in relation to
recent comparable transactions. If deemed necessary by the City, a current real estate appraisal prepared by an
independent appraiser selected by the City shall be provided to validate the fair market value of the land in as-is
condition. A high purchase price alone is not sufficient to warrant the use of TIF.
19) New and Retained Job Opportunities. When jobs are created or retained, preference should be given to jobs
that are not currently located within the City. TIF will not be used for projects that would give a significant
financial advantage over similar businesses located in the City.
20) Maximum TIF contribution. The principal amount of TIF shall be justified by the “but for” evaluation and shall
not exceed the value of exceptional public benefits delivered by the completed market rate project.
21) Delivery of TIF Note(s). TIF Notes shall only be delivered to the developer (and be interest-bearing and
payable) after the completion of the full project, delivery of the public easements, issuance of Certificate of
Occupancy, certification of final costs, documentation of final equity and inclusion outcomes and other key
parameters identified in the TIF Redevelopment Agreement. A Certificate of Completion shall be issued by the
City/HRA to confirm completion of all TIF related requirements.
22) Park Dedication Fees. When TIF is used to support development of new outdoor publicly available spaces such
as public plaza, public courtyard or similar public space, the value of such spaces shall not be deducted from any
Park Dedication Fees due from the market-rate redevelopment project.
23) Grant Funding. Grant funding from other agencies shall be pursued when TIF is used for a development project.
The amount of TIF provided may be reduced depending on the amount of grant funding received. The total
grant funding received shall be included in the pro formas when the “look back” is calculated.
24) Business Subsidy Laws. The City will require compliance with the State of Minnesota Business Subsidy Laws in
Minnesota Statutes, Section 116J.993 through 116J.997, unless the project meets one of the business subsidy
exceptions.
25) Pooling. When pooled TIF funds are available from a different TIF District, their use should be prioritized to
provide affordable housing in a greater amount, longer term, or lower target income than what is usually
achieved using other City policies. Other uses of pooled funds shall be at the direction of the City Council or
HRA.
# # #
☒City Council Approved: 2011
☐City-Wide Revised: 11/17/2022
☐Department
City of Edina Policy
Tax Increment Financing Policy
BACKGROUND
The City of Edina has statutory authority to use Tax Increment Financing (TIF) pursuant to Minnesota State
Statutes Section 469.174-469.1799 (the TIF Act). TIF uses the increased property taxes generated by new real
estate development within defined geographic districts to pay for certain costs associated with new development
(including but not limited to affordable housing) as well as related public infrastructure and public realm spaces.
The City’s mission is “…to provide effective and valued public services, maintain a sound public infrastructure,
offer premier public facilities and guide the development and redevelopment of lands, all in a manner that sustains
and improves the health and uncommonly high quality of life enjoyed by our residents and businesses.” (Source:
2015 Vision Edina).
The land within the City boundaries has been substantially built-out for more than a decade and many of the older
properties are in the “redevelopment” phase. In order to construct a new structure, an older structure that is
unsound, outdated, or obsolete must typically be removed.
In most cases, development projects in Edina are privately funded using traditional debt and equity sources. From
time-to-time, however, the City has found it necessary to provide financial support for development projects that
deliver outstanding benefits to the community and that could not be accomplished without public financial
involvement.
As early as the 1970s, the City used TIF to help deliver desired commercial and multifamily development served
by public infrastructure elements including roads, sidewalks, utilities, public parking, and public realm spaces like
parks and plazas. TIF was essential to construct the commercial, residential and public elements at Edinborough
Park and Centennial Lakes Park (including affordable housing). TIF was also essential to fund public parking at 50th
and France and to transform the Grandview District from an industrial area to a mixture of residential,
commercial and civic uses with public parking. Historically, Edina has taken a more restrictive view on the use of
TIF than allowed by Minnesota Statute.
City of Edina
Tax Increment Financing Policy
Page 2
PURPOSE OF POLICY
While most redevelopment projects in Edina are privately financed, on certain occasions, the City may
find it necessary to provide financial support in order to overcome unusual hurdles and to achieve
extraordinary benefits to the general public. The purpose of this policy is to:
• Limit the use of TIF to only projects that deliver permanent benefits to the general public that are better than
the minimum established in City Code
• Clarify that the use of TIF in Edina will be more limited than allowed by Minnesota Statute
• Establish criteria and guidelines for where new TIF Districts are established and how incremental taxes are
utilized in Edina.
• Ensure that TIF is used in a transparent, consistent and equitable manner to provide value to the community.
• Ensure that TIF is used to deliver both short-term and long-term improvements that are a benefit to the
general public in Edina.
This policy provides guidance to developers, property owners, staff, and the community at large regarding Edina’s
use of Tax Increment Financing as a public finance tool to attract and support high quality development that
contributes to a strong property tax base and to the high quality of life in Edina. For the purpose of this policy, the
“City” shall also mean the Edina Housing and Redevelopment Authority (HRA), which assists in a variety of
housing, redevelopment, and economic development activities for the City of Edina.
PUBLIC BENEFITS PURSUED WITH TIF
In addition to the Minnesota TIF Statutes, Edina applies an additional expectation that the use of TIF will deliver
permanent benefits to the general public other than tax base growth. Edina’s Comprehensive Plan establishes
guidance for the anticipated changes in land use and related systems for the next decade. Most land use changes
are anticipated to occur in commercial and industrial areas. Many of the preferred outcomes identified in the
Comprehensive Plan include changes to transform single use sites to mixed uses that provide a strong tax base,
improved connectivity and access for drivers, bicyclists and pedestrians. When necessary, TIF can be used to
achieve many benefits to the community, including:
• Transformational change of properties in a manner compatible with Comprehensive Plan, Small Area
Plans, Development Framework, Sustainability Policy, New Multifamily Affordable Housing Policy and
other Guidelines adopted by the City
• Improvements to the multi-modal transportation network, including roads and infrastructure for motor
vehicles, pedestrians, bicyclists and transit
City of Edina
Tax Increment Financing Policy
Page 3
• Public realm improvements, including green space and placemaking elements including landscaping,
streetscaping and public art
• Public parking facilities that provide shared parking resources for more than one property
• Improvements to public utility networks; including potable water, fire protection, storm sewer and
sanitary sewer
• Stormwater retention and detention systems that benefit more than one property
• Removal of substandard buildings (as defined in MN Statute) that may have a blighting effect on the
community
• Preservation of buildings that are historically or culturally significant to the community
• Remediation of environmental contamination
• Creation and retention of long-term affordable housing at a variety of below-market price points
• Creation and retention of permanent employment opportunities
I. PROCEDURAL CONSIDERATION OF TIF
1) Authority rests with City Council. Consideration to establish a new TIF District shall be at the sole
discretion of the City Council. Administration and determine of specific uses of incremental property
taxes generated therein shall be at the discretion of the City Council or HRA. Since each development
project is unique, the use of TIF shall be considered on a case-by-case basis.
2) Preparation of TIF documents. The Edina Housing and Redevelopment Authority shall provide initial
direction regarding the potential use of TIF, shall review the Term Sheet that identifies the proposed use
of TIF on each project and shall review and approve the contractual documents such as TIF Agreements.
3) Eligible Applicants. Only current property owners or developers that have site control are eligible to apply
for TIF. Evidence of site control shall be provided in the TIF Application.
4) Negotiation of TIF terms. After the TIF Application is submitted, the developer shall negotiate financing
terms only with the City Manager, HRA Executive Director or designee. The prepared terms and
proposed contract shall then be presented to the HRA Board and the City Council as a whole.
5) Application Form. Developers that request TIF shall submit a completed application in a form approved by
the City Manager or HRA Executive Director. The application shall identify the anticipated financing
sources, including equity, type of debt, external grants/contributions, and the amount and type of TIF
support requested to resolve the financing gap. A complete development sources and uses pro forma shall
City of Edina
Tax Increment Financing Policy
Page 4
be submitted, as well as an operating pro forma based on a stabilized project. The application shall include
calculations that identify the financing gap. This information is required to determine the “but for” test
required under the TIF Act. The application shall also identify extra-ordinary costs to develop the project
in Edina and shall also identify the exceptional public benefits that could be delivered if the project is
completed. The Application shall also address other criteria identified in this document.
6) Application Fee. The application fee shall be $10,000. Fifty percent (50%) of the fee shall accompany the
initial application. The remaining fifty percent (50%) shall be due after the confirmation of a Term Sheet
and prior to the preparation of full contractual documents. Application fees are non-refundable.
7) Use of Third-party Expert Advisors. Expert advisors shall be engaged by the HRA as necessary to ensure
compliance with the TIF Act and to provide expertise to supplement the abilities and capacity of staff.
Typical advisors have expertise in TIF law, public sector development finance, general development
finance, property inspection as it pertains to TIF, and real estate valuation, among other redevelopment
topics. All advisors shall be contracted to the HRA and shall uphold the interests of the HRA and the City
while providing service.
8) Developer Responsible for Fees. The developer shall be solely responsible for the payment of third
expenses pertaining to the developer’s request for TIF support from the time of the request to the
delivery of the Certificate of Completion. Prior to preparation of the Term Sheet, the applicant shall
submit to the City a deposit equal to the total estimated costs for legal and consultant fees. These funds
will be held in a non-interest-bearing escrow and the City will draw upon these funds to pay all related
expenses. Additional funds may be necessary if the scope of the work changes beyond the initial
expectation. Any unused balance shall be returned to the developer upon completion of the process. The
developer shall also be solely responsible for any costs related to requested amendments to the TIF
District or TIF Agreements.
9) Initial Staff Response and Notification of HRA Board. City staff shall review and evaluate the Application
for compliance with the City’s policies. Soon after receipt of a TIF Application, staff should advise the
Edina HRA about the TIF request including the potential public benefits delivered if TIF would be
provided. Staff will then seek approval to engage third party advisors to fully vet the merits of the TIF
request.
10) Preparation of Term Sheet. Staff shall prepare a Term Sheet that summarizes the key terms by which TIF
could be used for the project. The Term Sheet shall be submitted to the Edina HRA for review and
consideration. The Term Sheet should generally be considered simultaneously or soon after preliminary
zoning approval is obtained. The HRA should provide verbal indication whether they are agreeable to
preparation of binding contracts (commonly known as TIF Agreements) based on the Term Sheet.
11) Creation of TIF District. After consideration of the Term Sheet, staff shall begin the process of establishing
a TIF District to achieve the goals outlined in the Term Sheet.
City of Edina
Tax Increment Financing Policy
Page 5
12) TIF Agreement. Staff shall work with legal and financial advisors to prepare complete and binding legal
agreements based on the Term Sheet. The TIF Agreement should be considered by the HRA Board
and/or the City Council after final zoning approval is obtained.
13) Building and Zoning Approvals. The provision of TIF is contingent upon receiving all other necessary
project approvals from the City.
II. FINANCIAL REPORTING AND TRANSPARENCY
1) Mandatory Reporting. The City shall submit all required reports on the use of Tax Increment Financing to
Hennepin County and the Minnesota Office of the State Auditor using the format provided by those agencies.
2) Year in Review Report. Each year, staff shall publish a report that summarizes the use of TIF written in plain
English style. This report shall include the following information for each active TIF District: start and end
dates, debt and contractual obligations, tax collection status, tax base status, and other pertinent information.
This report shall also quantify outcomes when TIF is used to achieve public benefits. This report should be
delivered to the Edina HRA in January and shall be made available to the applicable School District(s) and to
the general public upon request.
3) Website. The City shall post general information on the use of TIF in Edina on the City website.
III. ESTABLISHMENT OF TIF DISTRICTS
1) Preparation of TIF Plan. The HRA’s Financial Advisor shall prepare the TIF Plan to satisfy the requirements of
Minnesota TIF Statutes. The TIF Plan should be written in plain English style. The TIF Plan should describe the
intended redevelopment and/or housing outcomes and should identify how the use of TIF will help achieve
community goals as defined in the Comprehensive Plan and related plans.
2) Type of District. The type of District established shall be determined by the City Council in accordance with
the limitations contained in Minnesota Statute.
3) Boundaries and Term. The boundaries of each new district should be as small as necessary to achieve the
development goals of the subject properties and adjacent public areas. When establishing a new TIF District,
the shortest statutory term to achieve the desired outcomes should be considered. A longer term should be
considered when pooling is desired.
4) Impact on Municipal Services. The impact of the proposed project on the City’s delivery of services, capital
expenditures and operating expenditures shall be taken into consideration prior to the adoption of a TIF Plan.
5) Fiscal Disparities. Projects utilizing TIF are responsible for paying their share of the Fiscal Disparities
contribution from the property taxes generated from the project and within the boundaries of the District.
City of Edina
Tax Increment Financing Policy
Page 6
6) Community engagement. The City shall follow standard protocol and processes for collecting community
input on every proposed TIF district. At a minimum, this typically includes advance notice, online engagement
and in person public meetings.
7) Input from School District and County. A draft of the TIF plan shall be provided to Hennepin County and to
the school district where the district is located for review and comment prior to the public hearing.
8) Establishment of District. Unless unique circumstances apply, establishment of a TIF District should coincide
with the execution of one or more TIF Agreements capable of satisfying the outcomes identified in the TIF
Plan.
9) Early De-certification. Within one year after the 5-year statutory deadline, the City should consider early
decertification of the District if no debts or contractual obligations for the incremental taxes remain. Within
one year after all debts and obligations have been satisfied, the City should consider whether to de-certify the
District early. Consideration should be given to the potential benefits from pooling available funds before the
District is de-certified.
IV. EXPECTATIONS FOR TIF SUPPORTED REDEVELOPMENT PROJECTS
1) Site Plan. The site plan for any project supported with TIF shall be designed to substantially follow the
regulations and guidelines as adopted in Edina’s Comprehensive Plan, Small Area Plans, Development
Framework and (as applicable) Southdale Design Experience Guidelines (where applicable). The expected
quality and nature of site plan improvements is highest when TIF is contributed. Redevelopment
projectsProjects supported with TIF shall fully satisfy each of the following aspects as described in adopted
plans and guidelines and as approved through the City’s typical zoning review / site plan review process:
a. Subdivision of superblocks to establish a transportation grid with walkable, human-scale blocks
approximately 200 ft by 200 ft or as appropriate for the size, length and width of the property
b. Creation of new streets, sidewalks and trails to allow through traffic by the general public (recognizing
that redevelopment of neighboring parcels may be necessary to complete the through route)
c. Creation of new public realm spaces including streetscaping, lighting and public art
d. Minimum building setbacks (such as 30 ft and 50 ft in the Greater Southdale District) are should be
considered “build to” lines
e. Applicable street room typologies implemented
f. Massing, recessed upper floors, building articulation, and fenestration provided
g. Perimeter spaces that front a public street or similar route with public easement shall be occupiable and
activated. Storage, parking, and utility spaces shall be kept to the bare minimum along public routes
City of Edina
Tax Increment Financing Policy
Page 7
The provisions of this policy are not intended to require an additional site plan review process. The City
Council shall make the final determination of whether the site plans adequately abide by the Comprehensive
Plan and other adopted codes, plans and guidelines to warrant the use of TIF.
2) Exterior Finish Materials. The types of finish materials on portions of the building directly visible from a street
or other public realm space shall comply with Edina’s City Code. For TIF supported projects, a high degree of
stone, brick and other natural materials is preferred.
3) Public Realm Experience. A vibrant and welcoming public realm experience is essential for every project
supported with TIF. Examples of contributing elements include (but are not limited to): sidewalks wider than
required by City Code, public plaza, public seating areas, integrated transit shelters, landscaping, hardscaping,
commercial storefronts and residential walk-up units that directly engage the public realm areas. Under the TIF
Act, reimbursement through TIF for public realm amenities will need to be reviewed on a case-by-case basis,
but will be required even if not subject to TIF reimbursement.
4) Public Art. Projects supported with TIF shall incorporate permanent public art as an integral part of the public
realm experience. Each public art installation shall be secured with an easement that provides for the
maintenance and permanence of the art element by the owner. The public art elements shall be consistent with
those contained in the approved site plans. Additional art elements may be required when TIF is contributed.
Examples of additional art elements include but are not limited to: sculptures, murals, sidewalk poetry, water
features, light and sound displays, and rotating art installations. City Council shall make the final determination of
whether the quantity and type of public art elements warrant the use of TIF. Under the TIF Act, reimbursement
through TIF for public art will need to be reviewed on a case-by-case basis, but public art will be required even if
not subject to TIF reimbursement.
Members from the Edina community shall be engaged as part of the artist-selection process and/or the art-
selection process. The developer shall make the final art selection keeping in mind the recommendation and
input from the community members.
5) Public dedication or public easements. All public benefits in TIF supported projects shall either be owned by the
City or HRA, dedicated to the City or be secured with permanent easements (to the City) or restrictive
covenants to ensure that the public has long-term access to and long-lasting benefits from the improvements.
6) Affordable Housing Units. Multi-family development projects supported with TIF should incorporate any
required affordable units into the site, as opposed to providing the prescribed contribution to Edina’s
Affordable Housing Trust Fund.
7) Public Parking. Only those parking stalls that are available to the general public throughout all times of the day
and year shall be considered to be supported with TIF. Parking stalls that are dedicated for the exclusive use by
residents or tenants will not be eligible for TIF support. The public parking stalls shall be easily identified as
public parking with exterior signage near the entrance and wayfinding signage on the site.
8) Environmental Sustainability. Edina’s Sustainable Buildings Policy shall apply to all projects supported with TIF.
For TIF-supported projects, the applicable Sustainable Building Rating System shall be LEED Silver or better.
Additionally, electrificationElectrification of heating systems and/or on-site renewable energy generation are
City of Edina
Tax Increment Financing Policy
Page 8
preferred in TIF-supported projects; projects should achieve at least 2 total LEED points between Grid
Harmonization and Renewable Energy credits. Certification of the completed building(s) shall be required and
compliance shall be renewed (by the owner) throughout at least the term of the TIF District at the frequency
identified by the certifying agency.
9) Collaborative Partnerships. The developer should engage local neighborhood groups and other community and
regional organizations to provide the highest reasonable level of collaboration to ensure a successful project.
Community partners could include business and trade associations, private and non-profit groups and
associations, governmental agencies and similar stakeholders and benefactors. Evidence of effective engagement
should be provided in the TIF Application. This collaborative approach is also helpful to secure grants from
other agencies.
10) Mitigation of Construction Disruption. As part of the Go-Ahead letter by which the developer commits to
proceed with the project and prior to the site preparation and construction, a Construction Mitigation Plan
(CMP) shall be submitted to the City that identifies the developer’s and general contractor’s strategies to
address the inconveniences that occur to the neighbors and general public during the construction period.
Topics to be addressed in CMP include: milestones and methods to provide advance notice to neighbors; off-
street parking for contractors and suppliers; delivery routes for construction vehicles; queuing locations for
large vehicles serving the construction site; temporary street, lane or sidewalk closures; temporary detours for
vehicles, pedestrians, bicycles and transit vehicles; construction site security; and strategies to mitigate dust,
vibrations and noise. The CMP must also identify the responsible person to be contacted by neighbors when
questions or problems occur. Phone number and email address of the responsible job site person shall be made
available.
11) Fair Labor standards. The developer and general contractor shall certify that all applicable state and federal
labor laws have been satisfied and shall allow third party inspections or other means of confirming compliance.
Failure to comply with applicable state and federal labor laws shall be considered a default with appropriate
penalties.
12) Actions to Promote Diversity and Equity in Redevelopment. The development and construction of projects
with TIF support shall include best efforts by the developer and general contractor to provide employment
opportunities for people that are under-represented in the construction field, including women and people of
color. Similar efforts shall be made to structure contracts so that businesses owned by people under-
represented in the construction industry (including majority women-owned, majority minority owned, certified
MBE, WBE and VBE) have a fair and realistic opportunity to provide goods and services to the project.
The developer’s plan and strategy to achieve these goals (commonly referred to as Equity and Inclusion
Outreach Plan or EIOP) shall be included in the TIF Agreement. The plan shall identify employment and
contracting goals for women and people of color. The plan must also include an intentional strategy to pursue
and achieve these goals to the greatest extent practical. The plan shall also include the developer’s and general
contractor’s practices to pursue equity, including how they participate in workforce development programs and
similar activities in the Twin Cities.
City of Edina
Tax Increment Financing Policy
Page 9
Standards and recommendations from State of Minnesota Department of Human Rights, Hennepin County and
similar local and regional agencies and trade associations shall be considered as guidance when identifying these
goals and strategies.
As a condition of the Certificate of Completion, the developer shall report on the implementation of the plan
as well as the outcomes. Penalties shall apply when the developer fails to make a good faith effort to implement
this plan.
V. USE OF TIF IN EDINA
1) TIF to deliver public benefits. TIF will only be used to enable a developer to complete a project that delivers
exceptional public benefits. An increase in property tax base alone is not sufficient to warrant the use of TIF.
TIF shall also be used as a means to finance public infrastructure improvements carried out by the City.
2) “But for” Test. Any use of TIF shall be subject to the “but for” test as prescribed in Minnesota Statute; meaning
that “but for” the use of TIF, a project of the size, scale and quality proposed would not occur. The public
benefits delivered by the project would also not occur on the site without the use of TIF.
3) Final Site Plan Approvals. Requests for TIF support after preliminary zoning has been granted may result in
changes to the preliminary site plan to comply with this TIF policy. Any delays or costs due to a re-review are
the sole responsibility of the developer.
4) Financial Gap. TIF should only be considered to fill a financial gap that is unable to be satisfied by traditional
equity and debt sources. TIF assistance will not be provided to projects that have the financial feasibility to
proceed without the use of TIF. TIF will not be provided solely to provide an excessive contingency to the
project or broaden a developer’s profit margins on a project.
5) Developer’s Capital Stack. TIF should be considered the last money into the deal for market-rate projects
provided with TIF support. This includes multi-family housing where 20% or fewer of the units are affordably
priced in accordance with Edina’s multifamily affordable housing policy.
6) Pay as You Go TIF Notes. TIF should only be provided to developers of market-rate projects on a pay-as-you-
go basis. In certain cases, up-front or other forms of assistance may be considered by the City but will be at the
sole discretion of the City Council or HRA. Bonding or any other appropriate means of financing, supported
with TIF revenue should be used by the City to carry out public infrastructure improvements within the TIF
District.
7) Interest Rate. The interest paid on TIF Notes shall be consistent with the typical interest rate paid in the
marketplace for the type of project. The interest rate paid on the TIF Note should not exceed the interest rate
underwritten for the permanent financing.
City of Edina
Tax Increment Financing Policy
Page 10
9)8) Deviations from Policy. The City reserves the right to approve or reject the use of TIF, the amount of TIF, and
the total term, on a case by case basis, taking into consideration established policies, project criteria, and
demand on services in relation to the potential benefits from the project. Deviations from this policy shall be
allowed if specifically approved by the City Council or HRA.
10)9) Impact on City Services. TIF will not be used to support development projects that place excessive demands
on municipal services or other capital or operating expenditures of the City.
11)10) Financial Analysis. The applicant shall provide to the City and its financial advisor all information
necessary to conduct a financial analysis of the proposed project. This information must be complete and
accurate. Falsification or manipulation of the financial information shall be terms for immediate disqualification
of consideration.
12)11) Financial Returns to Developer. The financial returns to the developer shall be within the typical
industry norms for the type and scale of the project. The use of TIF shall be limited to increasing the returns to
the lower level of the normal range.
13)12) Projections of Incremental Taxes. The Financial Advisor shall use realistic projections for the value of
incremental taxes generated over time. The amount of TIF pledged shall not exceed the amount projected to
be generated from the completed project.
14)13) Access to Complete Site and Project Information. Prior to approval of the Term Sheet, the developer
shall provide any surveys, required market and financial feasibility studies, appraisals, environmental studies, soil
boring information for the project, and other information or data that the City or its legal and financial
consultants may require in order to proceed with an independent underwriting. Such information is subject to
the Minnesota Government Data Practices Act and may be public information at the time of submission.
Proprietary information will be kept non-public to the extent allowed by Minnesota statute.
15)14) Financial Guarantees. In the event that a type of TIF support other than Pay-as-you-go Note is used, the
developer shall provide adequate financial guarantees to ensure completion of the project and the repayment of
the tax increment financing in the event that the project fails to be completed. Types off guarantees may include,
but are not limited to, assessment agreements, insurance, letters of credit, etc.
16)15) Developer experience and capacity. Any developer requesting TIF shall demonstrate past success in
real estate development as well as specific capability in the type and scale of development proposed. As part of
the TIF Application, the developer shall submit a list of critical members of the development team that identifies
professional qualifications and references.
17)16) Inflated Fees not acceptable. The developer fees, soft costs and operating expenses included in the pro
forma must be reasonable and typical for the industry. Inflated fees, unreasonable expense categories and
excessive contingencies will not be accepted.
City of Edina
Tax Increment Financing Policy
Page 11
18)17) Look back. The TIF agreement will include “look back” provisions to ensure that the TIF was actually
needed and shall include early termination of TIF Note payments and/or “claw back” provisions if it is
determined that TIF was not needed at the level identified in the TIF Agreement. The clawback provision may
be waived for tax-credit and similar affordable housing developments.
19)18) Real Estate Transactions. TIF shall not be used when land acquisition costs exceed market land costs.
Acquisition costs shall be scrutinized to ensure that the purchase price is fair and reasonable in relation to
recent comparable transactions. If deemed necessary by the City, a current real estate appraisal prepared by an
independent appraiser selected by the City shall be provided to validate the fair market value of the land in as-is
condition. A high purchase price alone is not sufficient to warrant the use of TIF.
20)19) New and Retained Job Opportunities. When jobs are created or retained, preference should be given
to jobs that are not currently located within the City. TIF will not be used for projects that would give a
significant financial advantage over similar businesses located in the City.
21)20) Maximum TIF contribution. The principal amount of TIF shall be justified by the “but for” evaluation
and shall not exceed the value of exceptional public benefits delivered by the completed market rate project.
22)21) Delivery of TIF Note(s). TIF Notes shall only be delivered to the developer (and be interest-bearing
and payable) after the completion of the full project, delivery of the public easements, issuance of Certificate of
Occupancy, certification of final costs, documentation of final equity and inclusion outcomes and other key
parameters identified in the TIF Redevelopment Agreement. A Certificate of Completion shall be issued by the
City/HRA to confirm completion of all TIF related requirements.
23)22) Park Dedication Fees. When TIF is used to support development of new outdoor publicly available
spaces such as public plaza, public courtyard or similar public space, the value of such spaces shall not be
deducted from any Park Dedication Fees due from the market-rate redevelopment project.
24)23) Grant Funding. Grant funding from other agencies shall be pursued when TIF is used for a
development project. The amount of TIF provided may be reduced depending on the amount of grant funding
received. The total grant funding received shall be included in the pro formas when the “look back” is
calculated.
25)24) Business Subsidy Laws. The City will require compliance with the State of Minnesota Business Subsidy
Laws in Minnesota Statutes, Section 116J.993 through 116J.997, unless the project meets one of the business
subsidy exceptions.
26)25) Pooling. When pooled TIF funds are available from a different TIF District, their use should be
prioritized to provide affordable housing in a greater amount, longer term, or lower target income than what is
usually achieved using other City policies. Other uses of pooled funds shall be at the direction of the City
Council or HRA.
# # #
Date: December 20, 2022 Agenda Item #: VI.A.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
R eport / R ecommendation
F rom:Alis ha Mc Andrews , F inance Director
Item Activity:
Subject:R es olution No. 2022-11, S etting 2023 Tax Levy and
Adopting 2023 O perating Budget
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 No. 2022-11 Setting 2023 Tax L evy and Adopting 2023 Operating B udget.
I N TR O D U C TI O N:
T he H R A is a separate taxing authority formed by the City Council in 1974. T he purpose of the levy is to pay a
portion of the administrative expenses and other economic initiatives that are necessary to operate the H R A
including the C ity's renewed efforts to create affordable housing. H istorically those expenses have been paid
using T I F funds. C ontinuing with the plan to reduce the reliance on T I F funds, the levy proposed for 2023 is an
increase from $237,300 in 2022 to $244,400. T his is the same as the preliminary amount that was approved by
the H R A on S eptember 15.
AT TAC HME N T S:
Description
2023 Governmental Funds Summary
Better Together Public Hearing Comment Report
Resolution No. 2022-11 Setting 2023 Tax Levy and Adopting 2023 Operating Budget
CITY OF EDINA
Proposed Governmental Fund Budgets
Braemar Debt
General HRA PACS CAS CDBG Police SR Memorial Service Construction
Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
REVENUES AND OTHER FINANCING SOURCES
Property tax levy 39,820,200$ 244,400$ -$ -$ -$ -$ -$ 3,230,000$ 6,560,400$ 49,855,000$
Tax increments - 1,723,245 - - - - - - - 1,723,245
Franchise fees & other taxes 830,000 - 1,200,000 1,000,000 - - - - 90,000 3,120,000
Special assessments - - - - - - - - 3,726,253 3,726,253
Licenses and permits 5,466,160 - - - - - - - 74,000 5,540,160
Intergovernmental 1,605,100 - - - 135,000 - - - 2,780,000 4,520,100
Charges for services 5,945,291 - - - - - - - 195,000 6,140,291
Fines and forfeitures 650,000 - - - - - - - - 650,000
Investment income 250,000 186,000 - 15,000 - - 1,000 - 203,000 655,000
Other revenue 376,000 - - - - 289,122 2,500 - - 667,622
Transfers and contributions 157,500 - - - - - - 2,816,752 100,000 3,074,252
Debt issued - - - - - - - - 2,813,402 2,813,402
Other financing sources - - - - - - - - - -
TOTAL REVENUES AND OTHER
FINANCING SOURCES 55,100,251 2,153,645 1,200,000 1,015,000 135,000 289,122 3,500 6,046,752 16,542,055 82,485,325
EXPENDITURES AND OTHER FINANCING USES - BY DEPARTMENT
Administration 2,874,918 - - - - - - - 66,000 2,940,918
Communications 1,605,202 - - - - - - - 113,000 1,718,202
Information technology - - - - - - - - 30,000 30,000
Human resources 1,533,038 - - - - - - - - 1,533,038
Finance 1,351,006 - - - - - - - - 1,351,006
Public works 6,149,717 - - - - - - - 560,790 6,710,507
Engineering 3,850,859 - 1,259,295 734,317 - - - - 9,844,334 15,688,806
Police 15,147,979 - - - - 137,000 - - 809,550 16,094,529
Fire 13,483,745 - - - - - - - 322,000 13,805,745
Parks & recreation 6,914,966 - - - - - 1,000 - 1,641,325 8,557,291
Community development 2,188,820 2,407,925 - - 135,000 - - - - 4,731,745
Debt service - 472,250 - - - - - 6,013,727 - 6,485,977
Transfers - - - - - - - - 2,816,752 2,816,752
TOTAL EXPENDITURES AND OTHER
FINANCING USES 55,100,251 2,880,175 1,259,295 734,317 135,000 137,000 1,000 6,013,727 16,203,751 82,464,516
EXPENDITURES AND OTHER FINANCING USES - BY TYPE
Personal services 38,967,024 207,455 131,506 157,660 - - - - 118,207 39,581,853
Contractual services 8,562,096 2,197,470 75,720 66,020 135,000 129,500 1,000 - 350,273 11,517,079
Commodities 2,444,747 3,000 13,000 1,200 - 7,500 - - 58,375 2,527,822
Internal services 5,126,384 - 9,069 9,437 - - - - 876 5,145,766
Equipment - - - - - - - - 1,936,665 1,936,665
Capital outlay - - 1,030,000 500,000 - - - - 10,922,603 12,452,603
Debt service - 472,250 - - - - - 6,013,727 - 6,485,977
Transfers - - - - - - - - 2,816,752 2,816,752
TOTAL EXPENDITURES AND OTHER
FINANCING USES 55,100,251 2,880,175 1,259,295 734,317 135,000 137,000 1,000 6,013,727 16,203,751 82,464,516
CHANGE IN
FUND BALANCE -$ (726,530)$ (59,295)$ 280,683$ -$ 152,122$ 2,500$ 33,025$ 338,304$ 20,809$
2023 GOVERNMENTAL FUND BUDGETS
11/30/2022
Survey Responses
Public Hearing Comments 2023 Budget
Better Together Edina
Project: Public Hearing: 2023 Budget
VISITORS
3
CONTRIBUTORS
1
RESPONSES
2
1
Registered
0
Unverified
0
Anonymous
2
Registered
0
Unverified
0
Anonymous
Respondent No:1
Login:Liz Olson
Email:lkolson@EdinaMN.gov
Responded At:Nov 22, 2022 09:06:06 am
Last Seen:Dec 02, 2022 15:16:34 pm
IP Address:156.142.13.110
Q1.First and Last Name DONOVAN SCHWICHTENBERG
Q2.Address 6621 Biscayne Blvd
Q3.Comment
I was reading the proposed City of Edina Tax Levy 9.89. That's much too high especially in these difficult times. It should not
go any higher than our social security was increased. Thank you for your consideration. (Voicemail received 11/18/22 at
6:43 PM) Transcribed by City Staff, Liz Olson
Respondent No:2
Login:Liz Olson
Email:lkolson@EdinaMN.gov
Responded At:Nov 22, 2022 09:21:27 am
Last Seen:Dec 02, 2022 15:16:34 pm
IP Address:156.142.13.110
Q1.First and Last Name MICHAELA JOHNSON
Q2.Address 4000 MONTEREY AVE
Q3.Comment
We received a letter here about the tax going up and that our tax is going to go up to 32.6%. I am just pretty astonished by
that. I think that is a really steep increase given the whole economic situation and all of the inflation that people have been
dealing with. To hit folks with that huge increase in taxes just seems pretty ridiculous and I hope that the city will reconsider
that for home owners in the area. Thank you. (Voicemail received 11/17/22 at 3:20 PM) Transcribed by City Staff, Liz Olson
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION NO. 2022-11
ADOPTING THE BUDGET AND SETTING THE TAX LEVY PAYABLE IN 2023
WHEREAS, The Edina Housing and Redevelopment Authority (the “HRA”) has authorities and powers
according to MN Statutes, Sections 469.001 to 469.047. MN Statutes, Section 469.033, subd. 6 grants
the HRA the power to levy and collect taxes subject to a resolution of consent from the Edina City
Council for a set period.
WHEREAS, The Edina City Council passed Resolution 2021-72 consenting to and authorizing an HRA
tax levy payable in 2023.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
Section 1: That there will be levied upon all taxable real and personal property in the City of Edina, a tax
rate sufficient to produce the amount as follows:
HRA GENERAL FUND $244,400
Section 2: That the budget is as follows:
HRA GENERAL FUND TAX LEVY REVENUES $244,400
HRA GENERAL FUND EXPENDITURES $244,400
Passed and adopted by the Housing and Redevelopment Authority on December 20, 2022.
ATTEST:
James Pierce, Secretary James B. Hovland, Chair
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 was duly adopted by the Edina
Housing and Redevelopment Authority at its Regular Meeting of December 8, 2022, and as recorded in
the Minutes of said Regular Meeting.
WITNESS my hand and seal of said City this ____ day of __________________, 20___.
_________________________________
Executive Director