HomeMy WebLinkAbout2024-07-25 HRA Regular Meeting PacketAg enda
E dina H ousing and R edevelopm ent Author ity
City of E dina, Minnesota
City Council Chambers
Thursday, July 25, 2024
7:30 AM
Watch the m eeting on cable TV or at EdinaMN.gov/LiveMeeting s or
Facebook.com /EdinaMN.
Par ticipate in Com m unity Com m ent:
Call 312-535-8110
E nter access code 2634 649 8843
Password is 5454
Press *3 on your telephone keypad when you would like to g et in the queue to speak
A sta7 m em ber will unmute you when it is your turn
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.Dra ft Min u tes of Regular Meeting on June 13, 2024
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.Fra n ce Avenue Pedestria n Crossing - Con cep t Up d ate
B.7235 France Aven u e - Recom m ended Term s of Tax Increm en t Fina n cin g
C.Resolution 2024-06: Ca ll for Pu b lic Hea ring for 72n d & France #3 TIF District
VIII.Executive Director's Com m ents
A.5146 Eden Avenue - Project Upda te
IX.HRA Com m issioners' Com m en ts
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 pliAca 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: July 25, 2024 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, P lanning Adminis trative S upport S pec ialis t
Item Activity:
Subject:Draft Minutes of R egular Meeting on June 13, 2024 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:
I N TR O D U C TI O N:
Approve minutes.
AT TAC HME N T S:
Description
Minutes from June 13, 2024
Page 1
MINUTES
OF THE REGULAR MEETING OF THE
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
JUNE 13, 2024
7:30 A.M.
I. CALL TO ORDER
Chair Hovland called the meeting to order at 7:36 a.m. then explained the processes created for
public comment.
II. ROLLCALL
Answering rollcall were Chair Hovland, Commissioners Agnew, Jackson, Pierce, and Risser.
Absent: None.
III. PLEDGE OF ALLEGIANCE
IV. MEETING AGENDA APPROVED - AS PRESENTED
Motion by Commissioner Jackson, seconded by Commissioner Agnew, approving the
meeting agenda as presented.
Ayes: Agnew, Jackson, Pierce, Risser, and Hovland
Motion carried.
V. COMMUNITY COMMENT
No one appeared.
V.A. EXECUTIVE DIRECTOR’S RESPONSE TO COMMUNITY COMMENTS
Executive Director Neal responded there were no past Community Comments.
VI. ADOPTION OF CONSENT AGENDA AS PRESENTED
Motion by Commissioner Jackson, seconded by Commissioner Agnew, approving the
consent agenda as presented:
VI.A. DRAFT MINUTES OF REGULAR MEETING OF MAY 16, 2024
Ayes: Agnew, Jackson, Pierce, Risser, and Hovland
Motion carried.
VII. REPORTS AND RECOMMENDATIONS
VII.A. RESOLUTION NO. 2024-03; SUPPORT THE PRESERVATION OF AFFORDABLE
HOUSING AT 3400 PARKLAWN AVENUE SOUTH AND 5010 SUMMIT AVENUE –
ADOPTED
Affordable Housing Development Manager Hawkinson stated CommonBond Communities was
seeking a $850,000 deferred loan for the refinancing and renovation of South Haven and Summit
Point. These two properties provided affordable housing to 129 extremely low-income seniors and
individuals with disabilities. CommonBond acquired the properties in 2005,and completed a
moderate renovation at that time. CommonBond needed to refinance their first mortgage on both
properties and financing to address physical and operational needs. As both properties had been
serving very low-income households, there was insufficient cash flow to address major mechanical
upgrades or aesthetic improvements. CommonBond was also pursuing bond financing together with
4% tax credits from Minnesota Housing and financial assistance from Hennepin County.
The Board asked questions and provided feedback regarding the key terms and conditions of the
loan, aesthetic changes, seeking out tax credits for energy efficiency, occupants for the housing, and
security for financing.
Minutes/HRA/June 13, 2024
Page 2
Member Jackson introduced and moved adoption of HRA Resolution No. 2024-03,
Supporting the Preservation of Affordable Housing at 3400 Parklawn Avenue South
and 5010 Summit Avenue. Seconded by Member Pierce.
Ayes: Agnew, Jackson, Pierce, Risser, and Hovland
Motion carried.
VII.B. RESOLUTION NO. 2024-05; MODIFYING THE EDEN WILLSON TAX INCREMENT
FINANCING DISTRICT AND ASSOCIATED PLAN - ADOPTED
Economic Development Manager Neuendorf said this item pertained to the boundaries of the Eden
Willson TIF District. This District was established in 2021 and during the certification process, the
County raised concerns with the original Registered Land Survey of City Hall and Tupa Park. The
concerns have been addressed. In order to expedite the certification of this TIF District, staff and
the HRA's financial and legal advisors recommend that the boundaries be adjusted to remove Tupa
Park from the TIF District. This boundary change would have no impact to the current or anticipated
obligations of this TIF District and staff recommended that Resolution 2024-05 be approved.
The Board asked questions and provided feedback regarding interference with work on fixing the
interchange between 50th and 100th , invalidations of the original District, and funding.
Member Jackson introduced and moved adoption of HRA Resolution No. 2024-05,
Modifying the Tax Increment Financing Plan for the Eden Willson Redevelopment Tax
Increment Financing District at the Southeast Edina Redevelopment Project Area.
Seconded by Member Agnew.
Ayes: Agnew, Jackson, Pierce, and Hovland
Abstain: Risser
Motion carried.
VII.C. RESOLUTION 2024-04; AUTHORIZING TAX INCREMENT PLEDGE AGREEMENT
– ADOPTED
Mr. Neuendorf shared that on June 4, 2024, the City Council approved Resolution 2024-37 which
provided for the issuance of up to $32,730,000 General Obligation Bonds. The bonds were
anticipated to be issued and sold in July 2024. Approximately $5.4 million of the bond proceeds
were anticipated to provide long-term financing for two transportation improvement projects that
were identified and recommended in the East Grandview Transportation Study. The Eden Grange
roundabout project was constructed in 2023 and completed in Spring 2024. The cost of this project
was approximately $2 million. The 50th Street (Grange to Dale) project was under construction in
2024 with a cost of approximately $3.2 million. Both of these roadway improvement projects were
part of the redevelopment strategy for the Eden Willson TIF District. Incremental property taxes
were intended to be used to repay portions of the bond. A resolution was being presented to
authorize incremental taxes to be used to repay a portion of the General Obligation bonds and staff
recommended that Resolution 2024-04 be approved.
Member Pierce introduced and moved adoption of HRA Resolution No. 2024-04,
Authorizing Execution of Tax Increment Pledge Agreement for the Eden Willson Tax
Increment Financing District. Seconded by Member Jackson.
Ayes: Agnew, Jackson, Pierce, Risser, and Hovland
Motion carried.
VIII. HRA COMMISSIONER COMMENTS – Received
IX. ADJOURNMENT
Motion made by Commissioner Jackson, seconded by Commissioner Agnew, to adjourn
the meeting at 8:27 a.m.
Minutes/HRA/June 13, 2024
Page 3
Ayes: Agnew, Jackson, Pierce, Risser, and Hovland
Motion carried.
Respectfully submitted,
Scott Neal, Executive Director
Date: July 25, 2024 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 and
C had Milner, C ity Engineer Item Activity:
Subject:F ranc e Avenue P edes trian C rossing - C oncept
Update
Information
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 informational purposes only.
I N TR O D U C TI O N:
T he engineers and planners at L H B will present a progress update on the conceptual idea of creating a grade-
separated pedestrian route in the 7200 block of France Avenue.
T his concept is a follow up to a 2008 proposal for an over-the-road pedestrian bridge in this same general
location. T he pedestrian crossing is intended to extend the E dina P romenade in the westerly direction to better
connect the C ornelia neighborhood to the parks and trails east of F rance Avenue. W hile the previous bridge
proposal was not constructed, this new concept is reborn from the anticipated private redevelopment of
commercial properties on the east and west sides of F rance Avenue.
S ince the previous update to the H R A B oard, the engineers and planners have met several times with H ennepin
C ounty transportation engineering staff to consider constraints and functional limitations. At this time, no major
flaws which would prevent the construction of an underpass have been identified. T he design concept continues
to evolve to reduce the complexity of the project and the cost.
T his topic is presented to the H R A because incremental property taxes (T I F) generated from both private
projects could be used to fund many of the design and construction costs of this pedestrian crossing. Eventually,
the proposal will need much broader input and authorization from the C ity C ouncil.
While no action is requested at this time, direction from the H R A B oard will be needed later in the year to
consider whether T I F should be identified as a primary funding source if the project is formally approved to be
designed and constructed. If H R A funding support is approved (in concept) later this year, preliminary design
engineering will proceed including additional input and collaboration with stakeholder.
Due to time limitations on July 25th, a follow-up H R A work session discussion is scheduled on August 15th.
AT TAC HME N T S:
Description
France Ave Cros s ing - progres s update 7-25-2024
South France Avenue Crossing
07/25/2024 Concept Image for Discussion Only 1
July 25, 2024 HRA Progress Update
Max. slope = 5%
07/25/2024 Concept Image for Discussion Only 2Previous Documents (2023 concept)
7200
Site
7250
Site
7235 NW
7235 SW
7235 NE
7235 SE
Lunds & Byerlys
Parking Lot
Pinstripes Parking
07/25/2024 Concept Image for Discussion Only Previous Documents (2023 concept) 3
07/25/2024 Concept Image for Discussion Only 4Previous Documents
7200
Site
7250
Site
7235 NW 7235 NE
7235 SW 7235 SE
07/25/2024 Concept Image for Discussion Only York Ave Underpass & Roadway Bridges 5
07/25/2024 Concept Image for Discussion Only 6Current Developer Concepts
7235 NW
7235 SW7250
Site
7200 Site 7235 NE
7235 SE
07/25/2024 Concept Image for Discussion Only 7Crossing Study
7250
Site
7200 Site 7235 NW
7235 SW
7235 SE
7235 NE
07/25/2024 Concept Image for Discussion Only 8Engineering Layout
07/25/2024 Concept Image for Discussion Only 9Street Profiles
07/25/2024 Concept Image for Discussion Only 10
07/25/2024 Concept Image for Discussion Only 11France Ave Cross-Section
07/25/2024 Concept Image for Discussion Only 12Lighting Study
07/25/2024 Concept Image for Discussion Only 13Lighting Study
07/25/2024 Concept Image for Discussion Only 14Lighting Study
07/25/2024 Concept Image for Discussion Only 15Pedestrian Circulation Diagram v1
07/25/2024 Concept Image for Discussion Only Pedestrian Circulation Diagram v2 16
07/25/2024 Concept Image for Discussion Only 17
Birds – Eye View looking North from the East Side of France Avenue
07/25/2024 Concept Image for Discussion Only 18
Birds – Eye View looking North from the West Side of France Avenue
07/25/2024 Concept Image for Discussion Only 19
Concept Model Looking East from Lower-Level Plaza
Date: July 25, 2024 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:7235 F rance Avenue - R ecommended Terms of Tax
Increment F inancing
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:
Authorize staff to engage Dorsey & W hitney and E hlers Associates to prepare a T I F Redevelopment Agreement
(based on the Term S heet) to be considered by the H R A and C ity in the future.
I N TR O D U C TI O N:
T his item pertains to the potential redevelopment of commercial property located at 7235 France Avenue. T he
development proposal from E nclave C ompanies and L ifestyle Communities received preliminary rezoning
approval on June 18, 2024 with final rezoning approvals anticipated in F all 2024.
T he developer has requested that the C ity and H R A consider the use of Tax I ncrement Financing to provide a
supplemental revenue source for over $20 million of public improvements and other site improvements that yield
substantial benefit to the general public.
After evaluation of the financial proformas by staff and E hlers Associates, it is confirmed that "but for" the use of
T I F, the proposed project will not yield minimum market returns and will not be financed or built. T he use of
T I F could attract nearly $300 million of private investment to this site.
T he general terms and conditions under which T I F is recommended to be used on this site are outlined in the
Term S heet.
T he Term Sheet has been prepared by C ity staff with guidance and expertise from Dorsey & W hitney and E hlers
Associates. T he developers are agreeable to the Term S heet.
S taff recommends that the Term Sheet be approved and seeks authorization to engage D orsey & Whitney and
Ehlers Associates to prepare a full T I F R edevelopment Agreement for future consideration by the H R A and C ity
C ouncil.
AT TAC HME N T S:
Description
7235 France - TIF Term Sheet
Staff Report
Staff Pres entation
7235 France Redevelopment
Proposed Term Sheet – Tax Increment Financing
DRAFT FOR HRA 7.25.24 BOARD DISCUSSION
1)Purpose and Scope
a.This Term Sheet identifies basic business points that establish the framework of the
potential use of tax increment financing (“TIF”) to support the private redevelopment of
underutilized property (as shown on the attached site plan, the “Project”) within the City
of Edina (the “City”) and to provide certain public benefits. This document is intended to
serve as the general framework for one or more definitive redevelopment agreements
(each a “Redevelopment Agreement”) to be executed by Developer (or Developer’s
approved assignees, which may be Lifestyle Communities or its affiliate), the City and the
Edina Housing and Redevelopment Authority (the “HRA”).
b.This document is intended for discussion purposes with the Board of the HRA. Based on
the response and direction provided by the HRA Board, the City staff is prepared to
engage third-party legal and finance professionals to assist with preparation and creation
of the TIF districts, the drafting and negotiation of the Redevelopment Agreement(s), and
related assistance for the Project.
c.City and HRA Out of Pocket Costs – Developer has completed the City’s TIF Policy Form
and agreed to pay for the City’s staff and out-of-pocket costs in evaluating this request
for Tax Increment Financing. The City has engaged Dorsey & Whitney, Ehlers Associates,
and LHB (collectively, “Third Party Consultants”) to provide assistance in preparing the
necessary studies and evaluations. Developer has submitted $30,000 in advance to be held
in escrow by the City. Developer shall provide additional funds as necessary. These funds
will be used to pay the Third Party Consultants. Any excess / un-used funds will be
returned to Developer. City agrees to provide copies of expenses paid from the
escrowed funds upon request by Developer.
2)Developer; Project Ownership
a.The lead Developer for Lots 1 and 2 is Enclave Companies, 1660 South Highway 100, St.
Louis Park, Minnesota 55426 (“Enclave”).
b.An affiliated developer for Lot 3 is Lifestyle Communities LLC, 4938 Lincoln Drive, Edina,
Minnesota 55436 (“Lifestyle”).
c.As used in this Term Sheet “Developer” includes Enclave, its approved assignee Lifestyle
and their directly controlled business entities created to deliver the Minimum
Improvements. Enclave will form a separate joint venture entity or entities for
development of Lots 1 and 2. Lifestyle will form a separate joint venture entity or entities
for development of Lot 3.
d.Transfer of Ownership – At this time, Enclave and Lifestyle are pre-approved
developers/owners. Any other transfer where Enclave and/or Lifestyle does not retain
controlling interest is subject to review and consideration by the HRA.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 2
3)Project Description
a. Location – The Project site is currently occupied by the Macy’s Furniture Store with the
historic associated address of 7235 France Avenue. The Project site is approximately 8
acres in area and will be re-platted into three (3) new separate legal parcels as part of the
Project (referred to below as Lots 1, 2 and 3, as shown on the attached Project Site Plan
and legal description. Four separate buildings are intended to be constructed on the three
lots.
b.Existing Conditions – The Project site is currently improved with a 89,782 square foot
retail building and associated surface parking. The Project site has been inspected by LHB
and found to be in a condition that potentially qualifies it as a “Redevelopment” TIF
District as defined under Minnesota Statutes.
c.Project – The overall Project is described in the planning documents submitted to the
City and approved through a Planned Unit Development (“PUD”) zoning ordinance and
Preliminary Development Plan on June 18, 2024 and a Final Development Plan anticipated
to be approved Fall 2024. The Project is generally depicted on the attached site plan, and
consists of the following elements as will be finalized in the Final Development Plan (each
an “Element”):
i.NW Element, Lot 1: A 7-story (approximately 85-foot tall) mixed use building
containing approximately 20,825 square feet of office/lobby/conference, 124
apartment units and approximately 7,594 square feet of retail, and an
approximately 282-stall parking garage including approximately 15 public parking
stalls. (as described further herein) (the “NW Element”). The NW Element will
be developed by Enclave.
ii.East Element, Lot 2: A pair of 7-story (82-foot tall) apartment buildings with
223 units and an approximately 346-stall parking garage including approximately
41 public parking stalls in the Northeast portion of the lot (“NE Building”) and a
7-story (82-foot tall) apartment with 176 units and approximately 4,141 square
feet of retail/restaurant and an approximately 380-stall parking garage including
approximately 42 public parking stalls in Southeast portion of the East Lot (“SE
Building”). The NE Building and the SE Building he “East Element”). The East
Element will be developed by Enclave.
iii.SW Element, Lot 3: An 11-story (155-foot tall) mixed use building containing
approximately 47,236 square feet of office, 49 senior resident-owned units,
approximately 9,549 square feet of retail/restaurant and an approximately 280-
stall parking garage including approximately 45 public parking stalls (the “SW
Element”). The SW Element will be developed by Lifestyle.
4)Minimum Improvements and Public Benefits of Project
a.Minimum Improvements – The NW Element, the East Element, and the SW Element
(along with all other required respective improvements under the Final Development
7235 France Redevelopment
Proposed TIF Term Sheet
Page 3
Plan) are referred to herein collectively as the “Minimum Improvements.” The
Redevelopment Agreement will contain additional detail on Enclave’s and Lifestyle’s
respective obligations to build their respective portions of the Minimum Improvements
(including public realm spaces diagram included in Attachment B-4). All required Minimum
Improvements for an Element will be completed prior to issuance of a Certificate of
Completion for such Element.
Any TIF assistance is conditioned on Developer’s completion of the portion of the
following Minimum Improvements by Element as specified elsewhere in this Term Sheet
and associated with the future Redevelopment Agreement and applicable TIF Note. Each
Element is described herein and depicted on the Project Site Plan attached hereto:
i.“ NW Element (Lot 1) Minimum Improvements:”
1.The mixed use building on the NW Lot as described within 3C(i) of this
Term Sheet.
2. 10% of total units of affordable housing in the NW Element; subject to
restrictive covenants that mandate affordable rates and income-qualified
tenants as described in the Final Development Plan and elsewhere in this
document.
3.Public realm improvements illustrated within the attached Attachment B
(Public Realm– All Elements) and Attachment B-1 (Public Realm – NW
Element) and generally described as follows:
a.The east-west promenade located on the southern portion of the
NW Lot secured with a permanent public easement.
b. The north-south roadway located on the eastern portion of the
NW Lot secured with a permanent public easement.
c.Graded and landscaped frontage along France Avenue that is
graded to accommodate the France Avenue Pedestrian Crossing
(if proper notice is given from HRA) or graded as shown in the
Final Development Plan.
d.The east-west roadway, street parking, public sidewalk and
landscaping located on the northern portion of the NW Lot and
secured with a permanent public easement.
e.Public art as described herein.
ii.“East Element (Lot 2) Minimum Improvements:”
1.Buildings located on the East Lot of the site as described within Section
3C(ii) of this Term Sheet.
2. 10% of total units of affordable housing in the NE Building of the East
Element and 10% of total units of affordable housing located in the SE
7235 France Redevelopment
Proposed TIF Term Sheet
Page 4
Building of the East Element; both subject to restrictive covenants that
mandate affordable rates and income-qualified residents as described in
the approved Plans and elsewhere in this document.
3.Public realm improvements illustrated within the attached Attachment B
(Public Realm – All Elements) and Attachment B-2 (Public Realm -- East
Element) and generally described as follows:
a.The east-west promenade located through the center of the East
Lot separating the NE Building and the SE Building and secured
with a permanent public easement.
b. The north-south roadway located on the western portion of the
East Lot and secured with a permanent public easement.
c.Graded and landscaped frontage along Promenade Park located
on the eastern portion of the East Lot.
d.The east-west fire access route and public sidewalk and
landscaping located on the northern portion of the East Lot and
secured with a permanent public easement.
e.The east-west fire access route, bicycle trail, public sidewalk and
landscaping located on the southern portion of the East Lot and
secured with a permanent public easement.
f.Public art as described herein.
iii.“SW Element (Lot 3) Minimum Improvements:”
1.The SW Element of the site as described within Section 3C(iii) of this
Term Sheet.
2. 10% of total residential units of affordable housing in the SW Element;
subject to restrictive covenants that mandate affordable purchase prices
and income-qualified residents as described in the approved Plans and
elsewhere herein.
3.Public realm improvements illustrated within the attached Attachment B
(Minimum Improvements – ALL Elements) and Attachment B-3 (SW
Element – Public Realm) and generally described as follows:
a.The north-south roadway located on the eastern portion of the
SW Lot secured with a permanent public easement.
b.Graded and landscaped frontage along France Avenue (running
north-south) and Gallagher Drive (running east-west) that is
graded to accommodate the Pedestrian Crossing (if proper
notice is given from HRA) or graded as shown in the final
approved plans.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 5
c.The east-west pedestrian connection along the southern portion
of the SW Lot graded and landscaped to connect with the
Pedestrian Crossing (if elected to be constructed by the HRA or
City) secured with a permanent easement.
d.The east-west bicycle trail, public sidewalk and landscaping
located on the southern portion of the Southwest Lot and
secured with a permanent public easement.
e.Public art as described herein.
b.Public Benefits – This Project addresses several of the goals identified in the Southdale
Experience Guidelines and other applicable City policies including:
i.Remove obsolete building from a prominent site.
ii.Subdivide the existing large parcel into grid blocks with private roadway and
pedestrian routes subject to perpetual public access rights
iii.Construct a mixed-use development whose scale and mass is generally consistent
with the Southdale Experience Guidelines with little or no surface parking.
iv.Improve the public sidewalk and streetscape along France Avenue.
v. Relocate the existing sanitary sewer line.
vi.Improve stormwater treatment and on-site retention as required by City
engineering standards and Watershed District standards.
vii.Provide public parking, as more particularly described below.
viii.Provide outdoor public realm spaces for use by the community, as more
particularly described below.
ix.Provide public art on each quadrant of the property, as more particularly
described below.
x.Comply with City Sustainable Buildings Policy, including (but not limited to) on-
site Solar, EV chargers and LEED/NGBS certification as more particularly
described below.
xi.Create new affordable housing units, including rental and ownership units, in
accordance with Edina’s Affordable Housing Policy; secured by restrictive
covenants described herein.
5)Minimum Improvements Timeline
a.This timeline identifies the general time frame envisioned for the Minimum Improvements.
Deadlines will be included in the future Redevelopment Agreement(s) based on this Term
Sheet, subject to extension for force majeure events including, without limitation,
reasonable delays due to unavailability of or delays in procuring materials or labor. The
actual dates may be slightly modified in the Redevelopment Agreement. Failure to meet
7235 France Redevelopment
Proposed TIF Term Sheet
Page 6
the ‘no later than’ deadlines will be considered a default of the applicable Redevelopment
Agreement(s), subject to notice and cure rights of the Developer set forth in the
Redevelopment Agreement(s). Completion will be evidenced by the HRA issuing a
“Certificate of Completion” to Developer for the applicable Element. In order to satisfy
the 5-year rule under the TIF Act, all Elements must demonstrate expenditure of all TIF
eligible reimbursable costs consistent with the TIF Act prior to the 5-year anniversary of
the TIF District (such anniversary anticipated to be June 30, 2030). The HRA’s Executive
Director may, in his reasonable discretion, change the sequencing order shown below.
(NW Element)
Description of Work Commencement Date Completion Date
Anticipated No Later Than Anticipated No Later Than
Final Zoning Approvals NA NA 11/06/2024 11/06/2025
Real Estate Land Closing NA NA 12/15/2024 03/30/2025
Demolition 09/01/2025 11/01/2025 10/01/2025 12/31/2025
Site Remediation 10/01/2025 01/15/2026 12/15/2025 06/15/2026
Site Preparation 11/01/2025 02/15/2026 01/15/2026 06/15/2026
Foundation 12/15/2025 06/15/2026 NA NA
Construction NA NA 11/01/2028 11/01/2029
Certificate of Occupancy (shell
building) NA NA 10/01/2028 10/01/2029
(SW Element)
Description of Work Commencement Date Completion Date
Anticipated No Later Than Anticipated No Later Than
Real Estate Land Closing NA NA 12/15/2024 03/30/2025
Site preparation 11/01/2025 02/15/2026 01/15/2026 06/15/2026
Foundation 12/15/2025 06/15/2026 NA NA
Construction NA NA 11/01/2028 11/01/2029
Certificate of Occupancy (shell
building) NA NA 10/01/2028 10/01/2029
7235 France Redevelopment
Proposed TIF Term Sheet
Page 7
(East Element)
Description of Work Commencement Date Completion Date
Anticipated No Later Than Anticipated No Later Than
Real Estate Land Closing NA NA 12/15/2024 03/30/2025
Site preparation 11/01/2025 02/15/2026 01/15/2026 06/15/2026
Foundation 12/15/2025 06/15/2026 NA NA
Construction NA NA 11/01/2028 11/01/2029
Certificate of Occupancy (shell
building) NA NA 10/01/2028 10/01/2029
6)Minimum Improvements Budget
a.The total Minimum Improvements are currently estimated to attract private investment
of approximately $298,600,000, including land assembly, soft costs and hard costs. The
estimated cost of the minimum improvements on each Lot are as follows:
i.NW Element - $56,600,000
ii.SW Element - $94,600,000
iii.East Element - $147,400,000
b.The Developer Fee for each Element will be specified in the financial proforma reviewed
and approved by the HRA for each Element and as shown in Attachment C.
c.Preliminary estimates of financial sources and uses for the Minimum Improvements to be
delivered on each Lot are shown in Attachment C.
d.Developer must provide the HRA access to a complete (line item) Minimum
Improvements budget for each Element at several stages of the Project including: during
the preparation of the Term Sheet and preparation of the Redevelopment Agreement,
with the submission of the Go-Ahead Letter, upon the completion of each Element and
at other times upon request by the HRA. To the extent allowed under the Minnesota
Government Data Practices Act, “trade secret” information will not be publicly available.
e.Developer shall provide to the HRA a complete accounting of the use of all contingency
funds. Anticipated uses to be identified simultaneously with delivery of the “Go Ahead
Letter” (as described below). An updated accounting of actual contingency uses will be
provided to the HRA prior to issuance of a Certificate of Completion for each Element.
Contingency funds shall be used only for costs related to increased material and labor
costs and other costs that contribute to the public benefit items.
7)Minimum Improvements Financing
7235 France Redevelopment
Proposed TIF Term Sheet
Page 8
a.Firm commitments from equity partners are pending. Information will be provided to the
HRA when available and a financing Go Ahead Letter will be provided to the HRA prior
to the closing on the purchase of the property indicating that the land sale will proceed.
In addition, separate Go Ahead letters will be provided for each Element to indicate that
each Element has secured full funding and will proceed. The future Redevelopment
Agreement will include additional information about the Go Ahead letters.
b.Prior to executing the Redevelopment Agreement, Developer will provide the HRA with
available letters of interest from bona fide investors, subject to reasonable non-disclosure
terms required by such bona fide investors.
c.Firm commitments for construction loans are pending. Information will be provided to
the HRA when available, and in any event prior to the issuance of the respective Go
Ahead Letter for each Element. Prior to executing the Redevelopment Agreement,
Developer will provide the HRA with available letters of interest from bona fide lenders,
subject to reasonable non-disclosure terms required by such lenders.
d.Prior to delivery of information regarding firm financing commitment or delivery of a Go
Ahead Letter, Developer will provide additional financing updates as requested by the
HRA, whether by oral or written request, within two business days of the request.
e.Developer has the option to arrange financing for the NW Element and the East Element
combined or separately. Lifestyle will separately arrange financing for the SW Element.
The Developer shall use its best judgment to establish project financing using a
combination of debt and equity partners that deliver the entire Project when appropriate
market conditions exist. The Developer shall inform the HRA whether joint financing or
separate financing by Element will be utilized as soon as that decision is made by
Developer. Completion of the Redevelopment Agreement is contingent upon such a
determination being made.
f.Multiple grants will be pursued by Developer jointly with the City.
g.TIF assistance for the Minimum Improvements is being considered as described in this
Term Sheet.
h.TIF assistance is not intended to be used for or to encourage the Developer to make
speculative investments with undue risk.
8)TIF Assistance
a.Generally
i.TIF assistance is conditioned upon the Minimum Improvements as a whole
demonstrating satisfaction of the “but for” TIF test. Developer will provide all
required information necessary to demonstrate that the Minimum Improvements
satisfies the “but for” test in Minnesota Statutes.
ii.Any TIF assistance issued will be in accordance with the City’s TIF policy as
reflected in the definitive Redevelopment Agreement.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 9
iii.Creation of any TIF district and any TIF assistance provided shall comply with all
applicable Minnesota Statutes.
b.TIF Districts
i.For the Minimum Improvements, the City and HRA will consider the creation of
a new 25-year Redevelopment TIF district (tentatively called the “72nd and France
3 TIF District” and referred to as the “TIF District”) covering the NW Lot, the
East Lot and the SW Lot.
ii.The TIF District may be expanded or modified at the sole discretion of the City
and HRA to achieve additional community goals provided that any TIF Note
awarded to the Minimum Improvements can be satisfied per the terms of the
applicable Redevelopment Agreement.
c.Reimbursable Costs
i.Based on review of the initial pro forma, it appears that the overall project will
include approximately $100,000,000 in expenses that can be deemed “TIF eligible
expenses under the Minnesota TIF Act. These include: acquisition, demolition,
remediation, site preparation, utilities, structured parking, and affordable housing.
However, the costs recognized by the City and HRA as reimbursable are only a
subset of those total costs.
ii.Based on the initial pro forma for the Minimum Improvements, the following
approximate costs associated with the Minimum Improvements are intended to
be reimbursable from TIF. The actual amount will be defined at the time the TIF
Notes are issued.
Redevelopment Costs
Potentially Eligible for
Reimbursement via TIF Notes
Approximate Total Costs
All
Elements
NW
Element
(Lot 1)
East
Element
(Lot 2)
SW Element
(Lot 3)
1. Demolition of existing obsolete
structures and site preparation
including: remediation of
environmental contamination;
vapor mitigation systems and soil
corrections (including but not
limited to: export, import,
shoring)
$5,494,671 $1,036,850 $2,888,521 $1,230,800
7235 France Redevelopment
Proposed TIF Term Sheet
Page 10
Redevelopment Costs
Potentially Eligible for
Reimbursement via TIF Notes
Approximate Total Costs
All
Elements
NW
Element
(Lot 1)
East
Element
(Lot 2)
SW Element
(Lot 3)
2. Site improvements to achieve
four building layout with
intervening roadways, sidewalks,
plazas & other public realm
elements, including but not limited
to erosion control, domestic
water, sanitary sewer, temporary
dewatering, internal roadways,
surface parking, driveways, curb
and gutter, sidewalks, bicycle
routes, street lighting, landscaping,
irrigation, streetscaping, public art,
on-site solar, and stormwater
management with all site
improvements in the public realm
secured with perpetual public
easements
$6,674,339 $1,228,249 $3,890,630 $1,555,460
3. Structured public parking
(approx 143 stalls) in each
Element; secured with perpetual
public easement
$4,648,631 $465,000 $2,573,000 $1,610,631
4. Affordable housing - portion of
net present value of foregone rent
for 25 years and lost market value
of condo sales; secured with
restrictive covenants to ensure
affordability
$8,600,614 $1,665,690 $5,696,523 $1,238,400
5. Professional costs to prepare
TIF study, TIF plan Term Sheet
and Redevelopment Agreement;
includes developers internal legal
costs and third-party costs
incurred by the City and paid for
by developer
$200,000 $38,000 $112,000 $50,000
7235 France Redevelopment
Proposed TIF Term Sheet
Page 11
Redevelopment Costs
Potentially Eligible for
Reimbursement via TIF Notes
Approximate Total Costs
All
Elements
NW
Element
(Lot 1)
East
Element
(Lot 2)
SW Element
(Lot 3)
6. Professional costs to prepare
architectural and engineering
designs TIF eligible items, including
civil, site work, remediation,
geotech, sustainability, public
realm areas, & master planning
$1,200,550 $240,500 $628,800 $331,250
Total = $26,818,805 $4,674,290 $15,789,474 $6,016,541
d.TIF Notes
i.Up to four TIF Notes will be issued (subject to statutory procedural
requirements) up to a maximum net present value principal amount of $22,874,000. The
TIF Notes will be limited obligations of the HRA issued solely to aid in financing certain
capital costs incurred to redevelop property within the TIF District and in conformity
with the laws of the State of Minnesota, including the TIF Act. Each TIF Note shall not be
assignable or transferable without the signed consent of the HRA, which will not be
reasonably withheld as long as the Developer certifies that no market for the TIF Note is
intended to be developed and it is not being assigned or transferred with a view for resale
or granting participation in the TIF Note. Further the assignee or transferee must certify
acknowledgement of the limits and terms imposed on the TIF Note payments by the
Redevelopment Agreement. Notwithstanding the foregoing, the Developer may assign
and pledge a TIF Note to secure a mortgage permissible for the Project, may transfer to
any entity under common control with the Developer or any entity which the majority
equity interest is owned by the parties that have a majority equity interest in the
Developer or may assign the SW Element TIF Notes to Lifestyle in accordance with the
terms of the Redevelopment Agreement.
iii.The TIF Notes will be issued individually for each Element only after Developer
demonstrates that (1) all Element-related Minimum Improvements related to the
applicable TIF Note have been completed; (2) sufficient reimbursable costs have been
expended; (3) public easements and covenants have been executed and recorded; and (4)
all other requirements of the Redevelopment Agreement have been satisfied. The
following terms and conditions apply:
a.Up to four TIF Notes in the aggregate principal amount of up to $22,874,000 will
be issued by the HRA:
1.A NW Element TIF Note in the maximum aggregate principal amount of
up to $4.56 million (amount corresponding to the NW Element
7235 France Redevelopment
Proposed TIF Term Sheet
Page 12
Reimbursable Amounts) upon issuance of a Certificate of Completion for
the NW Element Minimum Improvements.
2.A East Element TIF Note in the maximum aggregate principal amount of
up to $12.34 million (amount corresponding to the East Element
Reimbursable Amounts) will be issued by the HRA upon issuance of a
Certificate of Completion for the East Element Minimum Improvements.
3.One or two SW Element TIF Notes in the maximum aggregate principal
amount of up to $5.97 million (amount corresponding to the SW Element
Reimbursable Amounts) will be issued by the HRA upon issuance of a
Certificate of Completion for the SW Element Minimum Improvements.
b.The sizing of each TIF Note is also subject to the return on cost limitations as
specified in the Redevelopment Agreement. Each TIF Note will be subject to a
lookback/clawback based on Developer financial returns, as will be specified in
the Redevelopment Agreement.
c.A TIF Note will be issued by Element upon the satisfaction of the following
condition for each Element:
1.A Certificate of Completion has been issued for the Minimum
Improvements within the relevant Element.
2.Developer has provided the HRA with access sufficient for HRA staff to
confirm the actual Project (by Element) costs and returns and confirm
satisfaction of the “but for” test.
3.Developer has executed and delivered all public easements and the
acceptance of all public improvements (by City or County engineers,
Three Rivers Park District and Nine Mile Creek Watershed District, as
appropriate) required for the relevant Element by the City approvals and
the Redevelopment Agreement.
4.Developer has executed and delivered binding covenants and right of first
option regarding the affordable housing units required to be included in
the for the NW Element and the East Element by the City approvals and
the Redevelopment Agreement.
5.Developer has delivered to the HRA a final report and certificate detailing
and certifying as to the Developer’s activities and final outcomes of
Developer’s efforts to achieve the Equity and Inclusion goals for the
Element as specified in the Redevelopment Agreement.
6.Developer has satisfied all terms and conditions of the Redevelopment
Agreement(s) and is not in default under the Redevelopment
Agreement(s), the City approvals, or any other agreement pertaining to
the Project beyond any applicable notice and cure periods.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 13
7.Developer has met all requirements of the City’s corresponding site
improvement agreement for the Project, including no waiver or reduction
of required park dedication fees.
d.The TIF Notes shall bear interest at the demonstrated rate of debt financing
obtained at the time of completion on the applicable Minimum Improvements as
will be more particularly described in the Redevelopment Agreement.
e.Payments on the TIF Notes will be made using standard procedures: two annual
payments based on actual incremental property taxes generated only from the
specific Element/Lot, paid and received by the City. Payments on TIF Notes are
usually made February 1st and August 1st. The earliest that first TIF Note payments
would occur is in 2028.
f.The HRA may, in its sole discretion, retain up to 25 percent of the expected tax
increment to pay for qualified administrative costs, payment of contractual
obligations or debt to design and construct the Future Pedestrian Crossing and
qualified pooling expenses.
g.Any estimate of TIF cash flow projected by the City or HRA is hypothetical and
there are no guarantees that such TIF proceeds will be available.
8)Other Terms and Conditions
a.Affordable Housing
i.The Project will comply with all City affordable housing policies and
requirements. Developer will be responsible for the costs of assuring on-going
compliance with the policies and requirements, as prescribed on the date of
execution of the Redevelopment Agreement.
1.The NW Element and the East Element will each include at least 10
percent of units leased at 50 percent AMI affordable rates priced to
households earning no more than 60 percent of area median income (as
determined by HUD).
2.The SW Element will include at least 10 percent of units priced and sold
to households earning no more than 80 percent of area median income
(as determined by HUD).
3. In calculating the number of affordable units in each Element, any partial
unit shall be rounded UP to a whole unit. Affordable rental units shall
include a mixture of studios/alcoves, 1-bedroom and 2-bedroom units
distributed in approximately the same ratio as the market rate units in
the particular Element. Affordable for-sale units are anticipated to include
only 1-bedroom units.
ii.Affordable units shall be affordable for at least 20 years following the occupancy
of all affordable units by income-eligible occupants in the particular Element. The
7235 France Redevelopment
Proposed TIF Term Sheet
Page 14
term of affordability shall extend beyond 20 years if payments on TIF Notes
extend beyond 20 years. In that case, affordability shall continue until the TIF
Note payments terminate. The term of affordability shall be applied to each
Element separately.
iii.The Developer shall specify whether the affordable units will be fixed or floating
when the Go-Ahead letter is issued for each Element.
iv.Excluding the SW Element which will include a residential condominium at
inception, Developer to provide first right of refusal for the affordable housing
units in the event that the property is converted to condominiums during the
26-year term of the Redevelopment TIF District. Developer and HRA agree to
consider an extension of the initial 20-year term of affordability approximately
12-months prior to the conclusion of the initial term. The term of affordability
will be extended only if the parties can mutually agree on a means to extend the
affordability.
b.Park Maintenance Fee
i.Any Element to which a TIF Note is provided and which contains any individual
residential units (excluding hotel units or similar transient lodging) shall pay a
maintenance fee to the City for the purpose of maintaining the adjacent
Centennial Lakes and Promenade Parks. Payments shall be collected from the
owner/operator of each building contained in an Element. In the case of a
condominium or cooperative facility, payment shall be collected from the
association or management entity responsible for maintenance and operations
of the common areas of the building.
ii.A method will be included in the Redevelopment Agreement to require the
owner of each Element to (a) contribute to park maintenance through a park
maintenance fee not to exceed $15.00 per residential unit per month or (b) to
demonstrate to the City that an equivalent demonstrable contribution is being
made through maintenance of property adjacent to City park areas which will
reduce the amount of the maintenance fee per month.
iii.The fee shall begin on the first day of the month eighteen (18) months after the
issuance of both a Certificate of Completion and TIF Note for an Element.
Thereafter, fees shall be paid twice each year on January 1st and July 1st (unless
other dates are mutually acceptable to the parties). Fees shall be remitted
directly to the City of Edina 4801 W. 50th Street, Edina MN 55424 Attn: Parks
Department
iv.This maintenance fee shall be paid to the City and is not deemed a waiver,
replacement, alternative, or other impairment to the City’s right to collect
park dedication fees in accordance with applicable Law.
v.The obligation to pay park maintenance fees shall expire 30 years after the first
payment is received.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 15
vi.In case of failure to pay, the City may take action to collect by assessing the
fees to the property tax bill plus a surcharge of 50% of the amount due. Failure
to pay shall not be considered a default that enables the City to withhold
payments on the TIF Note.
vii.This obligation shall be documented by means of an executed agreement
recorded with Hennepin County on each Lot.
c.Public Parking
i.Only structured parking that is secured by means of a permanent public
easement shall be considered eligible for TIF reimbursement. The public parking
stalls in each Element are generally depicted in Attachment D. All public parking
areas will comply with certification criteria outlined in Section 8G(i).
Approximately 143 parking stalls incorporated into the NW element (15 stalls),
the East Element (83 stalls) and the SW Element (45 stalls) will be perpetually
available for public parking (through an easement in favor of the City or HRA).
Developer will be fully responsible for the maintenance and operational costs of
all public parking. All public parking will be available for no charge, unless an
exception is approved by the City Manager that is based on industry standards.
Examples of reasonable limitations and rules to be approved by the City Manager
include;
1.1 hour, 2 hour, 3 hour, and 4 hour time limitations;
2.longer time limits to allow for special event parking;
3.limitations on overnight parking or multi-day parking;
4.limitations on nighttime parking use;
5.limitations on vehicle repair; and
6.limitations on noises and nuisances.
ii.All public parking facilities shall be designed to incorporate a high level of public
safety features which might include: security cameras, emergency call systems,
secured entry and exit points, blind spot mirrors, transparent walls and/or
doorways or combination thereof. HRA staff shall be given the opportunity to
review and confirm these safety features.
iii.Developer must include typical signage above or adjacent to main parking garage
entrances that identify the “public parking” within. Signs visible from the exterior
of the building near each garage entrance must also display whether or not public
parking stalls are available in real time. Additionally, public parking wayfinding
signage must be provided at strategic locations on the site. All parking signage
must be provided to clearly delineate “private” stalls so that the general public
can readily understand which portions of the parking structures are available for
public use.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 16
iv.Developer will be responsible for all maintenance of the public parking in first
class condition.
v.All public parking and related elements will be subject to the terms and
conditions of the recorded Easement and Restriction Agreement governing the
Project. Developer will provide the HRA with copies of all cross easements
among the Lots required for public parking.
d.Nine Mile Creek bicycle trail
i.The Nine Mile Creek bicycle trail must be perpetually available for public use. If
the trail is not usable on a regular basis during the construction of the Project,
an alternate route must be provided by the Developer so that trail users can
travel from the eastern curb of France Avenue to the western edge of the Edina
Promenade as determined by the Three Rivers Park District. It is recognized
that the alternative bike route may also require approval from by the Three-
Rivers Park District.
e.France Avenue Pedestrian Crossing (aka Public Crossing)
i.City Right to Install Public Crossing. The City / HRA currently believes it is in
the best interest of the public to construct a public underpass or bridge to allow
pedestrians (and other non-motorized users such as bicyclists and people who
use devices to travel due to a disability) to cross France Avenue (County Road
17)above or below the existing street level (the “Public Crossing”) located in
the area of the Project. The City / HRA is currently analyzing the feasibility of
and design options for any such Public Crossing. The City/HRA is committed to
determining whether full funding to construct the Public Crossing will be pursued
prior to execution of the Redevelopment Agreement.
ii.Subject to the terms and conditions of the Redevelopment Agreement, if the
City elects to construct a Public Crossing, one end of the Public Crossing is
anticipated to terminate on a portion of the NW Element (Lot 1) and the SW
Element (Lot 3) (known as the “Crossing Easement Area”) and the City and
Developer shall enter into a definitive, recordable agreement (the “Public
Crossing Agreement”) to provide the City (and its agents, contractors, and
employees) access to the Crossing Easement Area for purposes of constructing,
maintaining, and operating the Public Crossing and to otherwise set forth the
terms upon which the City, at its cost, will build and maintain the Public Crossing.
iii.A form of the Public Crossing Agreement will be an exhibit to the
Redevelopment Agreement and will contain a clear delineation of respective
construction, repair, maintenance and replacement obligations between the
Developer and the City. Developer’s execution of the Public Crossing
Agreement shall be condition to issuance of the Certificate of Completion for
NW Element Minimum Improvements and the SW Element Minimum
Improvements, unless such condition is waived by City, which waiver may be
granted by the City’s Authorized Representative.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 17
iv. Public Crossing Agreement. Promptly following the City’s election to pursue full
funding for a Public Crossing to be located in the public easement area located
along the southern and western portions of the SW Element (Lot 3) and the
western portion of the NW Element (Lot 1), the City and Developer shall
negotiate the Public Crossing Agreement and any required amendment or
modification to the Public Crossing Agreement with all reasonable diligence and
in good faith, and such agreements shall include terms and conditions acceptable
to Developer and the City, in each of their commercially reasonable discretion,
and including, without limitation, the following:
1. The City shall be responsible for the design, construction, maintenance,
and operation of the Public Crossing, at its sole cost and expense, but
Developer shall continue to be responsible for the maintenance of the
Crossing Easement Areas on Lots 1 and 3 at no cost to the City or
Authority.
2. Developer will be responsible for the maintenance of the Crossing
Easement Area as will be specified in Public Crossing Agreement, all at
no cost to the City or Authority and otherwise in accordance with the
terms and condition of the Public Crossing Agreement.
3. Developer shall grant to the City permanent public access surface
easement(s), permanent stormwater easement(s), and temporary
construction easement(s) as necessary for construction, installation, use
and maintenance, repairs and future improvements of the Public Crossing
and other public access over the Project Area to allow public access to
and from the Public Crossing, all at no cost to the City
4. The construction of the Public Crossing may involve customary
construction noise, dust, vibration, and detours. The City (and its agents,
contractors, and employees) shall not be liable to Developer or any of its
Project tenants or other occupants for any such permitted disruptions.
Neither the City nor its agents, contractors, and employees will make
payments for any business interruptions which may arise from any such
permitted disruptions.
5. The City shall make reasonable efforts to limit disruption during the
construction of the Public Crossing, including, providing reasonable
advance notice of construction activities to the building owners and
building property managers in the Project Area, posting detours for
through traffic, and expanding work hours beyond the typical 8 AM to 4
PM to endeavor to expedite construction and minimize interference. The
City/HRA will engage with Developer (and other Project and public
stakeholders) during the design phase of the Public Crossing to consider
input to address the safety, security, durability, and usability of the Public
Crossing.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 18
6.The City, its successors and assigns, may assign or otherwise transfer all
or portions of its rights under the Public Crossing Agreement to any
other public entity (including, without limitation, the Authority and/or any
Hennepin County) to facilitate the construction, ownership, and
operation of the Public Crossing, in each case, without the consent of
Developer.
7.City/HRA and Developer will work cooperatively to ensure that all
insurance and other risk management issues regarding the respective
roles in the Public Crossing are properly addressed in the Public Crossing
Agreement.
v.If the City elects to proceed with the construction of the Public Crossing,
construction of the Public Crossing shall occur after Developer completes
construction of permanent Project improvements in the area of, or adjacent to,
the Crossing Easement Area on Lot 1 and/or Lot 3. The phasing and sequencing
of construction in the Crossing Easement Area will be refined in the Public
Crossing Agreement.
vi.Relationship to Minimum Improvements Design. As soon as reasonably practical,
Developer, City staff, and their respective engineers shall coordinate and
communicate in order for Developer to be able to cause the aesthetics and
operations of the lower levels and foundations of the NW Element and the SW
Element to be designed in consideration of, and to accommodate, the Public
Crossing being directly connected to the Crossing Easement Areas that also
serve as visual and usable reference points for the buildings on Lots 1 and 3. The
City will endeavor to provide Developer with conceptual engineering
information for any proposed Public Crossing before permits are issued for the
foundation for NW Element and the SW Element . The City shall be responsible
for all documented and reasonable cost increases, including but not limited to
design and construction, related solely to changes to the NW Element or the
SW Element necessary to accommodate the Public Crossing if access points to
the Public Crossing change after that time. Developer and City staff shall
otherwise promptly and diligently communicate with each other regarding such
design to endeavor to ensure that the City’s Public Crossing construction plans
do not interfere with such foundations.
vii.The City / HRA shall retain its right to use incremental property taxes generated
from the TIF District and not obligated to repay a TIF Note to fund the Public
Crossing and associated improvements.
f.Public Realm Spaces
i.Developer to provide public realm spaces around the perimeters of the NW
Element, the East Element and the SW Element. These spaces are generally
depicted on the attached Exhibit B.
7235 France Redevelopment
Proposed TIF Term Sheet
Page 19
ii.The public realm spaces will consist of outdoor pedestrian corridor with
landscaping, hardscaping, street scaping, public art, and other pedestrian
amenities consistent with the City approvals. Public realm will include:
1.At least 4 medium-to-large scale sculptures or large-scale murals as
permanent public art
2.placemaking process through a professional firm to enliven east-west
portion of the public realm spaces on a day-to-day basis (after
occupancy)
3.Lighting, security cameras and other public safety precautions in
strategic locations
iii.Developer will grant a permanent, public easement for access and use of the
public realm spaces by the general public, subject to reasonable,
nondiscriminatory limitations, rules and regulations governing its use adopted by
Developer and subject to the approval of the City Manager or its designee.
iv.Developer will be responsible for all maintenance and repair of the public realm
spaces including permanent features, fixtures and landscaping, except for any
maintenance, repair or replacement obligations by the City under the terms of
the Public Crossing Agreement.
v.The public realm spaces will be subject to the terms and conditions of the
recorded Easement and Restriction Agreement governing the Project.
g.Public Art
i.The Project shall include at least four (4) public art features in the locations
generally shown on the Approved Plans. Public art shall be large scale permanent
sculpture, murals or similar art installations. Public art shall be lit to be visible
during non-daytime hours.
ii.Developer shall engage a professional art consultant to establish and implement
a vision for public art and interpretation, subject to a public engagement process
approved by the City within 30 days after identification of the art consultant.
Within such 30 day period, the City Manager may also designate up to three
people to provide input and guidance to the art consultant. Developer will
reasonably consider the recommendations of the consultant and the public
engagement process in its final selection of art for the Project. Costs associated
with the art consultant will be paid by Developer and will be an eligible TIF
expense.
iii.The installation of the public art (sculptures and murals) shall have a value of no
less than $540,000 paid in artist commissions (including artist creative, materials,
labor, and installation charges, directly supportive footings/ foundations/ utilities
but excluding fees paid to a professional art consultant, costs related to the
public engagement process and improvement costs).
iv.The investment in public art shall be approximately as follows:
7235 France Redevelopment
Proposed TIF Term Sheet
Page 20
1.NW Element (sculpture which might be a decorative placemaking
archway subject to HRA staff review and approval) $200,000
2.SW Element (two murals located on two sides of the building) $180,000
3.East Element (NE building) (mural) $80,000
4.East Element (SE building) (mural or sculpture) $80,000
5.HRA Executive Director shall be authorized to make changes in the cost
distribution provided that a total investment in public art exceed
$600,000.
v.Developer will be responsible for all maintenance and repair of the public art in
a first-class manner.
vi.A covenant shall be included in the Redevelopment Agreement to establish
maintenance expectations for the public art.
h.Environmental sustainability
i.As a condition of TIF financing, every building contained within each Element
must be designed and certified with appropriate standards that provide a
greater degree of sustainability than applicable MN Building Code, as generally
described below. All sustainability features are also subject to the final
conditions of City Resolution 2024-40.
1. LEED or National Green Building Standard (NGBS) Certified or
equivalent meeting these standards:
a.NW Element: NGBS Silver
b.SW Element 2: LEED Silver
c.East Element 3: NGBS Silver.
ii.On-site solar array shall be provided on both buildings within the East Element
to the greatest degree practical based on the available pricing at time of
construction. The HRA staff shall be given the opportunity to review size and
output of solar arrays prior to submission by the Developer to the City of
plans for final City approval. The Developer shall be responsible for the repair
and maintenance of the solar arrays throughout at least the term of the TIF
District. At the time of the Term Sheet, Developer is anticipating two (2)
approximately 150kWh systems; one (1) located on each of the two East
Element buildings.
iii.Some of the required EV chargers shall be located in the Public Parking
portions of each Element. Specific locations to be clarified in the future
Redevelopment Agreement.
i.Equity and Inclusion – Developers shall use good faith efforts as defined by Minnesota
Department of Human Rights to include businesses that are majority owned by under-
represented groups including minorities, women, veterans and people with disabilities in
7235 France Redevelopment
Proposed TIF Term Sheet
Page 21
the development and construction of the Project. Developers shall also cause its general
contractors to use, good faith efforts to employ under-represented people on the
construction site. The definition of “good faith efforts” will be specified in the
Redevelopment Agreement to include details on (1) posting of opportunities, (2)
recruiting efforts, (3) selection, hiring and termination procedures, (4) employee files and
record keeping, and (5) reporting mechanisms. The Developers will prepare a “Equity and
Inclusion Outreach Plan” or similar strategy for each Element of this Project and, through
which, the Developers are committed to ensuring the community has a sincere
opportunity to participate in the Project’s construction through meaningful employment
and subcontracting opportunities.
j.The future Redevelopment Agreement will contain the Developers specific commitment
to minimum workforce goals to maximize employment opportunities for the local
workforce, including women and minorities. The future Redevelopment Agreement will
also contain the Developer’s specific commitment to minimum subcontracting goals to
maximize business and employment opportunities for disadvantaged businesses, including
women, minority and veteran owned business enterprises.
k.Other Easements - In addition to other easements specified herein, Developer has or will
grant a permanent, public easement for access and use of the perimeter and internal
roadways, sidewalks, streetscape areas, and seating areas by the public, subject to
reasonable, nondiscriminatory limitations, rules and regulations governing its use adopted
by Developer and subject to the approval of the City Manager or its designee.
i.Future Transit Easements - Developer agrees to grant specific easements, if
necessary, within public easement areas for future mass transit stops along
portions of France Ave at no cost to City or transit operator (land only – cost
to build is not Developer’s responsibility), subject to the responsible transit
agency being responsible for maintenance of the surface improvements in these
future easement areas. Public transit may include regional operators such as
Metro Transit or local operators like City of Edina.
9)Grants – Developer must make good faith effort to pursue grants for the Project as selected by
Developer and the City; provided, however, that any application for grants may take into account
whether any additional costs are to be included in the Developer’s pro forma due to the
requirements of any such grant. . The City/HRA agrees to sponsor grant applications that provide
financial support for the Projects. Costs of preparing the grant applications shall be borne by
Developer. City staff shall have the final authority to review and submit the grant applications to
Metropolitan Council, Minnesota Department of Employment and Economic Development and
Hennepin County per the terms of the grant programs. Any grants received for the Project will
be included in the Project pro forma for determining the Project’s return on cost and the Initial
Lookback and future lookback/clawback and determining satisfaction of the “but for” TIF test.
Following is the list of grants which may be applied for by City or Developer (as required by the
particular grant program):
a.Met Council Livable Communities Demonstration Account (LCDA);
b.Met Council Tax Base Revitalization Account (TBRA);
7235 France Redevelopment
Proposed TIF Term Sheet
Page 22
c.DEED Redevelopment Grant;
d.DEED Contamination and Cleanup Grant;
e.Hennepin County Environmental Response Fund
f.Other grants as applicable.
10)City Administrative Costs – The City/HRA to retain standard 10% of TIF proceeds per Minnesota
statute. The use of these funds is at the sole discretion of the City/HRA.
11)Fiscal Disparities – The City’s ‘fiscal disparity’ obligation for the redevelopment site will be paid
for from property taxes generated from the Project. This will be included in the calculation of
available TIF to pay off the TIF notes.
12)City and HRA Approval of Significant Changes – Changes to the Project that impact scope or
design are subject to City review using the typical City procedure.
13)Performance Bonds – Bonds or other security will be required for work in public rights of way
and for the elements with a public easement.
14)Default and Cure – Standard default provisions will apply. Each default will have a notice and cure
period, subject to extension for force majeure delays.
15)Anticipated Redevelopment Agreement Exhibits The Redevelopment Agreement is anticipated to
contain several Exhibits including but not limited to:
Exhibit A Legal Description of the Project Area
Exhibit B Public Realm Diagram – All Elements
Exhibit B-1 NW Element Public Realm
Exhibit B-2 East Element Public Realm
Exhibit B-3 SW Element Public Realm
Exhibit B-4 Public realm spaces – public access easement area
Exhibit C Project Plans
Exhibit D Operating Pro Forma and Project Sources & Uses
Exhibit E Form of Go-Ahead Letter(s)
Exhibit F Form of Certificate of Completion with Completion Checklist for each Element
Exhibit G Memorandum of Redevelopment Agreement
Exhibit H Form of TIF Note
Exhibit I Project TIF Adjustment / Lookback Calculation for each Element
Exhibit J Form of Parking Easement Agreement
Exhibit K Forms of Restrictive Covenant for Affordable Housing (rental and for-sale)
Exhibit L Form of Right of First Option for Affordable Housing
Exhibit M Equity and Inclusion Outreach Plan
7235 France Redevelopment
Proposed TIF Term Sheet
Page 23
Exhibit N Form of Equity and Inclusion Report
Exhibit O Public Crossing Concept
Exhibit P Form of Park Maintenance Fee Agreement
Exhibit Q Form of Public Art Covenant
7235 France Redevelopment
Proposed TIF Term Sheet
Page 24
Attachment A
Project Site Plan
7235 France Redevelopment
Proposed TIF Term Sheet
Page 25
Attachment B
Minimum Improvement – Roadway Boundaries All Elements
7235 France Redevelopment
Proposed TIF Term Sheet
Page 26
Attachment B-1
NW Element (Lot 1) Minimum Improvement Boundaries
7235 France Redevelopment
Proposed TIF Term Sheet
Page 27
Attachment B-2
East Element (Lot 2) Minimum Improvement Boundaries
7235 France Redevelopment
Proposed TIF Term Sheet
Page 28
Attachment B-3
SW Element (Lot 3) Minimum Improvement Boundaries
7235 France Redevelopment
Proposed TIF Term Sheet
Page 29
Attachment B-4
Public Realm Spaces – Public Access Easement Area
7235 France Redevelopment
Proposed TIF Term Sheet
Page 30
Attachment C
Operating Pro Forma and Project Sources & Uses
7235 France Redevelopment
Proposed TIF Term Sheet
Page 31
7235 France Redevelopment
Proposed TIF Term Sheet
Page 32
7235 France Redevelopment
Proposed TIF Term Sheet
Page 33
7235 France Redevelopment
Proposed TIF Term Sheet
Page 34
7235 France Redevelopment
Proposed TIF Term Sheet
Page 35
7235 France Redevelopment
Proposed TIF Term Sheet
Page 36
Attachment D
Public Parking
7235 France Redevelopment
Proposed TIF Term Sheet
Page 37
July 25, 2024
Chair and Commissioners of Edina Housing & Redevelopment Authority
Bill Neuendorf, Economic Development Manager
7235 France Avenue – Recommended Terms of Tax Increment Financing
Information / Background:
Enclave Companies and Lifestyle Communities are the developers for the 8-acre commercial site
located at 7235 France Avenue. The site is currently occupied by the Macys (formerly Daytons)
Furniture Store. Nearly half of the site is paved as a surface parking lot. Prior to the furniture store,
the site was part of a gravel & sand pit operation.
The developers have the property under contract to purchase from the current owner. They
successfully secured preliminary approval to rezone the property to allow four separate buildings
to be constructed on the site. This plan will subdivide the “super block” into three parcels (and
four building pads) that are rescaled to create a more traditional grid layout that encourages
walkability and a more connected sense of community.
After the furniture store relocates, the existing building will be razed and the site prepared for new
construction. The site will be subdivided. New roads, sidewalks and bicycle trails will become the
transportation backbone of the project. This new infrastructure will retain and create internal
routes for cars, trucks, pedestrians and bicyclists. The new roadway will create a new alternative
for local traffic that could relieve some of the pressure on busy France Avenue.
After the site is cleared, four new building pads will be constructed. The northwest pad of the
property is intended to be redeveloped with a 7-story building with new office space, new retail
space, and new apartments. The east parcel is intended to be occupied by two separate buildings.
The northeast pad is intended to become a new 7-story apartment building and the southeast pad
is intended to become a separate 7-story apartment building with commercial space for a
restaurant. The southwest pad is intended to be an 11-story condominium building with Class A
office space, street level commercial space and residential condominiums. Upon completion, this
Housing and Redevelopment Authority
Established 1974
STAFF REPORT – 7235 France - Recommended TIF Term Sheet Page 2
project will completely transform the outdated 1970’s commercial site into a modern mixed use
destination.
Summary
Redevelopment of each of the three parcels will be financed and constructed as independent
projects. Each project is subject to market conditions.
The developers intend to invest approximately $298 million of private debt and equity to fully
transform the site. The capital stack includes outside equity, internal equity and traditional debt.
Each developer has tentatively identified their likely equity investors. And each developer has
strong business relations with financial institutions that are willing to provide the debt to construct
the projects. This private investment, however, is subject to expectations for market-rate returns.
Due to the lack of public infrastructure on the site and high cost to build the projects, the use of
Tax Increment Financing appears necessary to achieve market returns.
The developers alerted staff to the high costs early in the planning process. They formally
requested that TIF be considered as the proposal moved through the regulatory review process.
In recent months, staff has met with the developer to understand the financing strategy for each of
the buildings. Staff has engaged legal and financial advisors at Ehlers Associates and Dorsey &
Whitney to scrutinize the financial pro forma and prepare terms and conditions by which TIF could
be used to support the redevelopment of this site. While these advisors work for the City / HRA,
the cost of this work has been borne by the developers.
Ehlers has scrutinized the financial pro formas for each building and the total project. Based on
current estimates, Ehlers has determined that the financial gap is approximately $22.87 million. This
amount may change slightly as the project costs are fine-tuned. Ehlers also confirmed that “but for”
the use of TIF, a project of this scale and caliber will be unable to secure private financing and
would not proceed.
Ehlers has also evaluated the anticipated change in property tax capacity of this transformational
redevelopment project. The taxable valuation is anticipated to increase by a factor of 20x. The
actual property taxes paid upon stabilization of all buildings are anticipated to increase by a factor
of 10x. In addition to the sheer amount of new taxes paid, the change from commercial to multi-
family creates a dramatic shift to benefit local taxing agencies (primarily school district, city and
county). This change in land use proportionally reduces the amount of taxes paid into the regional
fiscal disparity pool and increases the proportional amount paid to local taxing agencies. While this
shift is initially limited for the City and County, the School District will receive more tax value
immediately after the projects stabilize. When the TIF District terminates, all of the new value will
be shifted to the local taxing agencies.
STAFF REPORT – 7235 France - Recommended TIF Term Sheet Page 3
Dorsey has prepared a Term Sheet that abides by applicable Minnesota Statutes that govern Tax
Increment Financing. These terms also follow Edina’s TIF policy and practice which is typically more
limited than allowed by Minnesota Statute.
The Term Sheet articulates the fundamental structure of public financing for this redevelopment
site. The developers and City staff are mutually supportive of the terms and conditions expressed
in this Term Sheet. Both parties recognize that the Term Sheet is based on current estimates and
assumptions. Some of these estimates may change due to ongoing changes in the project design and
constant change in the construction and financing industries. All parties understand that several
financing details will need to be refined and reevaluated in order to craft a binding and effective
Redevelopment Agreement.
The Term Sheet follows the general format and strategic approach typically used by Edina for
redevelopment projects that include a mixture of uses and a wide variety of public benefits.
The structure of the Term Sheet maintains all financial risk with the developer. The developer will
provide up front financing. TIF will only be used to reimburse the project for pre-determined
eligible costs after each phase of the project is successfully completed.
One unique benefit of this proposal is the creation of a funding source for new City infrastructure.
Up to 25% of the tax increment could be retained by the City to cover administrative expenses and
to be pooled for construction of infrastructure (potentially the France Avenue pedestrian crossing).
If the HRA declines to fund that project, the funds could be available for other eligible
infrastructure projects or to fund additional affordable housing.
Staff recommends that the Term Sheet be approved. Staff also seeks authorization to continue to
work with Ehlers Associates and Dorsey & Whitney to prepare a binding Redevelopment
Agreement based on the approved terms for formal consideration in the future.
Recommended Action:
Approve the Term Sheet and authorize staff to work with legal and financial advisors to prepare a
binding TIF Redevelopment Agreement based on the approved terms.
# # #
7235 France Avenue
Recommended Terms of Tax Increment Financing
Report to Edina Housing & Redevelopment Authority
July 25, 2024
Prepared by: Bill Neuendorf, Economic Development Manager
Project Location
Cedars
Apartments
YMCA
Galleria
Target
Lunds /
Byerlys
Cornelia
Elementary
Southdale
Library
7235 France
Centennial
Lakes
School
District
280
2
Existing Conditions
•8-acre site
•Constructed 1977
•Occupied commercial building
•Deemed ‘sub-standard’ per MN Statute
•Under contract for sale by Macy’s
3
Development Team
•Fargo ND based
•Established 2011
•Unified real estate investment firm with in-house
development, construction & management
•150+ projects; 34 in Minnesota
•www.EnclaveCompanies.com
•Edina MN based
•Established 2008
•Focus on active-adult cooperatives
and condominium development
•45 completed projects
•www.ThisLifestyle.com
4
Preliminary Site Plan
•Submitted for Rezoning
Consideration March 2023
•Proposal modified to reflect input
received during 15-month review
process
•Recommended for Approval by
Planning Commission May 22, 2024
•Submitted Request for Tax
Increment Financing May 30, 2024
•Preliminary Rezoning Approved by
City Council June 18, 2024
•Final Rezoning and Site Plan
Approval anticipated
September/October 2024
Preliminary 6-18-2024 Site Plan, pending final approval 5
Preliminary Renderings
Preliminary Rendering 6-18-2024, pending final approval 6
Preliminary Renderings
Preliminary Rendering 6-18-2024, pending final approval 7
Preliminary Renderings
Preliminary Rendering 6-18-2024, pending final approval 8
Preliminary Renderings
Preliminary Rendering 6-18-2024, pending final approval 9
Essential Ingredients for Successful Redevelopment Project
Current Status –July 2024
1) Property ownership Active contract to purchase land
2) Regulatory
approvals Zoning entitlement
Preliminary zoning approved; final
zoning pending
3) Financing
Equity investors Multiple interested parties
Construction debt Multiple interested parties
HRA, EDA and/or
grant support
Recommended by staff;
Under consideration by HRA Board
10
Using TIF to Leverage Private Investment and Achieve Public Benefits
•Proposal is responsive to Southdale
Design Guidelines
•Subdivide ‘superblock’
•Prioritize ‘public realm’
•Integrate mixed uses
•Minimize surface parking
•Implement Sustainable Buildings Policy
•Implement Affordable Housing Policy
•Structured parking for shared visitor use
•New public realm spaces with sidewalks,
plazas and outdoor spaces
•Facilitate future grade-separated
pedestrian crossing
•Retain Nine Mile Creek Bike Trail
•Other fiscal contributions
•Property tax base
•Park dedication fees
•SAC/WAC fees
11
Public Benefits can be Achieved – Multi-modal Transportation Improvements
•Permanent easements for new
roadways, bike routes and
sidewalks
•Privately owned and
maintained
•Increases level of connectivity
•Distributes traffic among
multiple routes
•Reduce congestion on France
Avenue
•Provides access within the site
•Enhances access for adjacent
parcels
12
Public Benefits can be Achieved – Public Art
•Public art on each
building site
•Combination of mural
and sculptures
•Privately owned and
maintained
•Secured with covenant
•Selected with
community input
•$540,000+ budget
13
Public Benefits can be Achieved – Public Realm Spaces
•Roadways
•Sidewalks
•Bike routes
•Landscape & seating areas
•Promenade extension
•Access to future France
Avenue Ped. Crossing
•Nearly 50% of site
14
Public Benefits can be Achieved – Opportunity for France Ave. Pedestrian Crossing
incremental taxes set
aside for City administrative
and infrastructure expenses
such as Pedestrian Crossing
25%
15
Public Benefits can be Achieved – Affordable Housing Policy
NW Element (Lot 1)
•13 rental units
•Mix of studio, 1- and
2-bedroom units
•Priced to 50% AMI
households
•20-25 year term
East Element (Lot 2)
•23 rental units in NE
•18 rental units in SE
•Mix of studio, 1-bed
and 2-bedroom units
•Priced to 50% AMI
households
•20-25 year term
SW Element (Lot 3)
•5 condominium units
•1-bedroom units
•Priced to 80% AMI
households
16
Public Benefits can be Achieved – Public Parking
•Zero public parking
currently available
•Approx 140+ stalls
•Identified as ‘public parking’
17
Public Benefits can be Achieved – Sustainable Buildings Policy
18
Public Benefits can be Achieved – Advancing Diversity and Equity Goals
•Goals identified for each Lot
•Portion of work awarded to qualified MBE
and WBE companies
•Portion of total job hours filled by BIPOC
•Portion of total job hours filled by women
•Good faith efforts required
•Developers must submit and abide by
“Equity and Outreach Plan”, monitor
progress and report results
•Penalty only if no effort made
Image Source: Commercial Construction and Renovation
19
Staff Evaluation – Potential Tax Base Growth
Current
conditions
(2024)
Estimate after
redevelopment
(2030)
Estimated
Growth
Estimated
Market Value $12.1 M $244.43 M 20x
Annual
Property
Taxes Paid
$348,609 $3,640,000 10x
•Over 25 years, approximately $68
million of incremental taxes could
be generated
•This cash flow has net present value
of approx. $30 million that could be
split among City and developer to
pursue goals identified in a TIF Plan
•This degree of growth would not
happen if the site was kept “as is”,
remodeled or rebuilt as a series of
commercial buildings
•Transformational redevelopment
projects of this scale and caliber
deliver a tremendous boost to the
tax base
20
Staff Evaluation – Potential Tax Base Growth
Taxing Authority Current Tax
Collection
(Pay 2024)
Projected Tax Collection
Active TIF District Post-TIF District
City of Edina $45,206 13%$45,206 $858,563 24%
Hennepin County $57,739 17%$57,739 $1,096,605 30%
Richfield Schools #280
-Market Value Levy
-Tax Capacity Levy
$62,752 18%$443,375 $1,201,452 33%
State of Minnesota $70,302 20%$123,056 $123,056 3%
Fiscal Disparities Pool $103,177 30%$181,798 $181,798 5%
Other Taxing Authorities $9,432 3%$9,432 $179,149 5%
TIF District
-TIF Note reimbursement, (75%) and
- City-commissioned public infrastructure (25%)- $2,780,017 -
Estimated Total = $348,609 $3,640,624 $3,640,624
21
NOTE: For discussion purposes only; presumes tax
rates hold steady and does not include inflation
Staff Evaluation – Sources and Uses
Lot 1 – NW parcel by Enclave
Source of Funds Amount
First mortgage $ 33,960,000 60%
Investor cash
Grants
$ 22,640,000
$ TBD
40%
Total $56.6 M
Uses of Funds Amount
Land acquisition $ 4.6 M 8%
Hard Costs / Construction $ 41.4 M 73%
Permits/fees $ 1.75 M 3%
Soft Costs $ 2.93 M 5%
Financing Costs $ 2.5 M 4%
Developer Fee $ 2.28 M 4%
Escrows / Reserves $ 1.18 M 2%
Total $ 56.6 M
•Internal and external investors are
prepared to contribute equity
•Banks showing solid interest in
providing construction financing
22
Staff Evaluation – Sources and Uses
Lot 2 – NE and SE parcel by Enclave
Source of Funds Amount
First mortgage $ 88,440,000 60%
Investor cash
Grants
$ 58,960,000
$ TBD
40%
Total $147.4 M
Uses of Funds Amount
Land acquisition $ 14.68 M 10%
Hard Costs / Construction $ 105.53 M 71%
Permits/fees $ 5.6 M 4%
Soft Costs $ 5.5 M 4%
Financing Costs $ 9.7 M 7%
Developer Fee $ 4.75 M 3%
Escrows / Reserves $ 1.68 M 1%
Total $ 147.4 M
•Internal and external investors are
prepared to contribute equity
•Banks showing solid interest in
providing construction financing
23
Staff Evaluation – Sources and Uses
Lot 3 – SW parcel by Lifestyle Communities
Source of Funds Amount
Commercial mortgage
Residential mortgage
$ 19,718,400
$ 40,129,469
63%
Commercial equity
Residential equity
Grants
$ 13,145,600
$ 21,608,176
$ TBD
37%
Total $94.6 M
Uses of Funds Amount
Land acquisition $ 6.43 M 7%
Hard Costs / Construction $ 68.0 M 72%
Permits/fees $ 1.2 M 1%
Soft Costs $ 5.8 M 6%
Financing Costs $ 8.4 M 9%
Developer Fee $ 4.8 M 5%
Total $ 94.6 M•Internal and external investors are
prepared to contribute equity
•Banks showing solid interest in
providing construction financing
24
Staff Evaluation – Project Costs eligible for TIF Reimbursement
•More than $100 M of project costs are TIF qualified per MN LAW
•Edina’s TIF policy is more restrictive and allows only expenses that are
uniquely burdensome to the site and expenses that deliver public
benefit to be reimbursable with incremental tax payments
Expenses Eligible for
Reimbursement via TIF Notes
Estimated Costs
Total Lot 1 NW Lot 2 E Lot 3 SW
1. Demolition and site preparation $5.49 M $1.0 M $2.9 M $1.2 M
2. Site improvements (public realm)$6.67 M $1.2 M $3.9 M $1.6 M
3. Public parking $4.65 M $0.5 M $2.6 M $1.6 M
4. Affordable housing $8.60 M $1.67 M $5.70 M $1.23 M
5. Professional fees, TIF $200k $38k $112k $50k
6. Professional fees, public use items $1.20 M $241k $629k $331k
Total =$26.82 M $4.67 M $15.79 M $6.02 M
25
Staff Evaluation – Pro Forma
Lot 1 – operating expenses and investment returns
Lot I (NW mixed use site)Upon Stabilization
Residential Income (124 units)
Commercial Income (22,500 sq ft)
Effective Gross Income =
$ 3,436,992
$ 867,510
$ 4,304,502
Operating Costs, Management Costs, Taxes
Total Expenses = $ 1,188,207
Net Operating Income (NOI)
+ TIF Note Payment
NOI (with TIF Assistance) =
$ 3,116,294
$ 317,006
$ 3,433,300
Total Development Cost = $ 56,600,000
Cash on Cost Annual Return (without TIF) = 5.51% BELOW MARKET
Cash on Cost Annual Return (with TIF) = TBD NEED TO REACH MARKET RETURN
Without TIF support, the
NW Element does NOT
appear to be viable
26
Staff Evaluation – Pro Forma
Lot 2 – operating expenses and investment returns
Lot 2 (NE and SE mixed use site)Upon Stabilization
Residential Income (399 units)
Commercial Income (4,100 sq ft)
Effective Gross Income =
$ 12,292,757
$ 81,047
$ 12,373,804
Operating Costs, Management Costs, Taxes
Total Expenses = $ 4,277,393
Net Operating Income (NOI)
+ TIF Note Payment
NOI (with TIF Assistance) =
$ 8,096,411
$ 1,129,732
$ 9,226,143
Total Development Cost = $147,400.000
Cash on Cost Annual Return (without TIF) = 5.49% BELOW MARKET
Cash on Cost Annual Return (with TIF) = TBD NEED TO REACH MARKET RETURN
Without TIF support, the
East Element does NOT
appear to be viable 27
Staff Evaluation – Pro Forma
Lot 3 – operating expenses and investment returns
Lot 3 (SW mixed use site)Upon Stabilization
Residential Income (49 units)
Commercial Income (48,320 sq ft)
Effective Gross Income =
$ 236,904
$ 2,498,819
$ 2,735,723
Operating Costs, Management Costs, Taxes
Total Expenses = $ 563,964
Net Operating Income (NOI)
+ TIF Note Payment
NOI (with TIF Assistance) =
$ 2,171,759
$ 415,759
$ 2,587,518
Total Development Cost
Residential Unit Sales
Adjusted Development Cost =
$ 94,601,645
- $ 52,943,114
$ 41,658,531
Cash on Cost Annual Return (without TIF) = 5.21% BELOW MARKET
Cash on Cost Annual Return (with TIF) = TBD NEED TO REACH MARKET RETURN
Without TIF support, the
SW Element does NOT
appear to be viable
28
Recommended Terms – Private Investment
1)Developers bear ALL financial risk
•Developer incurs all cost of City / HRA advisors
2)Developer acquires land from seller
3)Developers secure private debt and equity
•Lot 1 = $56.6 M by Enclave
•Lot 2 = $147.4 M by Enclave
•Lot 3 = $94.6 M by Lifestyle Communities
4)Developers pursue grants from DEED, Met. Council & Hennepin County
5)Developers finance and construct as three distinct assets
6)Developers issue public easements upon completion
7)Developers maintain the site including private and public portions
29
Recommended Terms – Public Financial Participation
1)Establish 25-year Redevelopment TIF District
2)Pledge adequate reimbursement to secure private financing without
over-subsidizing
•Pledge up to $4.56 million Note for Lot 1 (8% of TDC)
•Pledge up to $12.34 million Note for Lot 2 (8% of TDC)
•Pledge up to $5.97 million Note for Lot 3 (6% of TDC)
3)City to retain 25% of incremental taxes for administration and
infrastructure
4)City and HRA to bear NO financial risk
•Notes payable AFTER completion of each lot
•Notes payable only from incremental taxes collected from each lot
30
Recommended Terms – Pay Go TIF Notes
1)Separate Pay Go Notes issued after
each Lot is substantially completed
2)Notes sized based on actual
demonstrated costs and not to
exceed a reasonable market return
3)Notes bear interest
4)Each Note payable after completion
of expected benefits and receipt of
annual property taxes
Least Risk
to City
Most Risk
to City
31
Recommended Terms – Lookback and Clawback Safeguards
Lots 1 & 2 (Enclave)
1)Lookback upon sale or 20
years after issuance,
whichever is first
2)Note payments terminate and
clawback applies if excessive
returns realized
3)Clawback not to exceed
value of TIF payments made
Lot 3 (Lifestyle Communities)
1)Lookback upon sale
2)Note payments terminate and
clawback applies if excessive
returns realized
3)Clawback not to exceed
value of TIF payments made
In accordance with Edina’s TIF Policy, lookback conditions will be identified in the
Redevelopment Agreement. Typical lookback and clawback conditions include:
32
Recommended Terms – Miscellaneous Conditions
Secure all public benefit site
improvements with binding easements
and covenants
1)Public parking stalls
•Located on street level of all three lots
2)Affordable Housing
•Located on all three lots
3)Public Realm Spaces
•Internal roadways
•Nine Mile Creek bike trail
•Sidewalks
•Landscaped and streetscaping areas
•Public art
•Extension of Promenade Plaza
between buildings
•Connection to future Pedestrian
Crossing, if approved by City/HRA
33
Summary
•The redevelopment proposal has been recommended to be approved by Planning
Commission and granted preliminary zoning approval by City Council
•The proposal yields many public benefits that would not otherwise be achieved on this site
•Sufficient revenue generated to make the project viable while retaining 25% for City
infrastructure improvements
•Independent review of the budgets and pro formas confirm the “but for” test
•The proposal is unable to be privately financed without a pledge of TIF assistance
•The site qualifies as a substandard or blighted property that qualifies for TIF designation
•Term Sheet has been negotiated in accordance with Edina’s TIF Policy and in the best
interest of the community
34
Recommended Actions
In conclusion, staff recommends that the HRA take the following actions:
1)Initiate the process to consider a new 25-year TIF Redevelopment District
2)Approve proposed Term Sheet to allow for multiple TIF Notes in the
maximum amount of approximately $22,874,000 based on completion of
each of lot, confirmation of “but for”, and delivery of public benefits
3)Authorize staff to prepare full legal agreements based on the Term Sheet
for future consideration in Fall 2024
Staff, City advisors & developers are available for any questions.
35
Date: July 25, 2024 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:R es olution 2024-06: C all for P ublic Hearing for 72nd
& F ranc e #3 T I F 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 2024-06 requesting that the C ity C ouncil of the C ity of Edina call for a P ublic Hearing on
the proposed establishment of the 72nd & France #3 Tax Increment F inancing D istrict (a redevelopment district).
I N TR O D U C TI O N:
T his item pertains to the potential redevelopment of commercial property located at 7235 France Avenue. T he
development proposal from E nclave C ompanies and L ifestyle Communities received preliminary rezoning
approval on June 18, 2024 with final rezoning approvals anticipated in S eptember.
T he developer has requested that the C ity and H R A consider the use of Tax I ncrement Financing to provide a
revenue source for over $20 million of public improvements and other improvements that yield benefits to the
general public. T he use of T I F could attract nearly $300 million of private investment on this site. T he general
terms and conditions under which T I F is recommended to be used on this site are outlined in the Term S heet.
T his R esolution is the first step in the formal process to consider the use of T I F. With the preparation of a T I F
P lan, the C ity, H R A and other taxing authorities will be able to consider the fiscal merits of this project.
S taff recommends that R esolution 2024-06 be approved.
AT TAC HME N T S:
Description
HRA Resolution 2024-06
RESOLUTION NO. 2024-06
REQUESTING THE CITY COUNCIL OF THE CITY OF EDINA
CALL FOR A PUBLIC HEARING ON THE PROPOSED ESTABLISHMENT OF
THE 72nd & FRANCE #3 TAX INCREMENT FINANCING DISTRICT
(A REDEVELOPMENT DISTRICT)
WHEREAS, the Board of Commissioners (the “Board”) of the Edina Housing and Redevelopment Authority (the
“HRA”) and City Council ("Council") of the City of Edina, Minnesota ("City") previously established the Southeast Edina
Redevelopment Project Area pursuant to Minnesota Statutes, Sections 469.001 through 469.047, inclusive, as amended, in
an effort to encourage the development and redevelopment of certain designated areas within the City; and
WHEREAS, the HRA is proposing the modification to the Redevelopment Plan for the Southeast Edina
Redevelopment Project Area (“Redevelopment Plan Modification”) to include the establishment of the 72nd & France #3
Tax Increment Financing District and adoption of a Tax Increment Financing Plan therefor (the Redevelopment Plan
Modification and Tax Increment Financing Plan are referred to collectively herein as the "Plans"), all pursuant to and in
accordance with Minnesota Statutes, Sections 469.174 through 469.1794 and Sections 469.001 to 469.047, inclusive, as
amended; and
NOW, THEREFORE BE IT RESOLVED by the Board as follows:
1. The HRA hereby requests that the City Council call for a public hearing on October 1, 2024, to consider the
proposed Plans and cause notice of said public hearing to be given as required by law.
2. The HRA directs the Executive Director to transmit copies of the Plans to the Planning Commission of the City
and requests the Planning Commission's written opinion indicating whether the redevelopment described in the
proposed Plans is in accordance with the general plans for redevelopment of the City, prior to the date of the
public hearing.
3. The Executive Director of the HRA is hereby directed to submit a copy of the Plans to the Council for its approval.
4. The HRA affirms the transmission of the Plans to Hennepin County and Independent School District No. 280 in
which the Southeast Edina Redevelopment Project Area is located no later than August 30, 2024.
5. Staff and consultants are authorized and directed to take all steps necessary to prepare the Plan s and related
documents and to undertake other actions necessary to bring the Plans before the Council.
Approved by the Board on July 25, 2024.
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 c ertify
that the attached and foregoing Resolution is a true and correct copy of the Resolution duly adopted by the Edina Housing an d
Redevelopment Authority at its Regular Meeting of July 25, 2024, and as recorded in the Minutes of said Regular Meeting.
WITNESS my hand and seal of said City this ______________ day of ___________________, 2024.
Executive Director
Date: July 25, 2024 Agenda Item #: VI I I.A.
To:C hair & C ommis s ioners of the Edina HR A Item Type:
O ther
F rom:Bill Neuendorf, Economic Development Manager and
C had Milner, C ity Engineer Item Activity:
Subject:5146 Eden Avenue - P rojec t Update Information
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 informational purposes only.
I N TR O D U C TI O N:
S taff will provide a brief update on the status of the H R A's vacant property at 5146 Eden Avenue.
A Request for P roposal (R F P ) is being prepared based on previous direction from the H R A Board. T his R F P is
intended to attract a new housing developer to compliment the restaurant and park anticipated to be located on the
3-acre site.