HomeMy WebLinkAbout2025-03-27 HRA Packet
Meeting location:
Edina City Hall
Council Chambers
4801 W. 50th St.
Edina, MN
Housing & Redevelopment Authority Meeting Agenda
Thursday, March 27, 2025
7:30 AM
Participate in the meeting:
Watch the meeting on cable TV or YouTube.com/EdinaTV.
Provide feedback during Community Comment by calling 312-535-
8110. Enter access code 2634 431 8224. Password is 5454. Press *3 on
your telephone keypad when you would like to get in the queue to
speak. A staff member will unmute you when it is your turn to speak.
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The City of Edina wants all residents to be comfortable being part of the
public process. If you need assistance in the way of hearing amplification, an
interpreter, large-print documents or something else, please call 952-927-
8861 at least 72 hours in advance of the meeting.
1. Call to Order
2. Roll Call
3. Pledge of Allegiance
4. Approval of Meeting Agenda
5. Community Comment
During "Community Comment," the Chair will invite residents to share issues or concerns
that are not scheduled for a future public hearing. Items that are on tonight's agenda may
not be addressed during Community Comment. Individuals must limit their comments to
three minutes. The Chair may limit the number of speakers on the same issue in the
interest of time and topic. Individuals should not expect the Chair or Commissioners to
respond to their comments tonight. The Chair will respond to questions raised during
Community Comments at the next meeting.
5.1. Executive Director's Response to Community Comments
6. Adoption of Consent Agenda
All agenda items listed on the Consent Agenda will be approved by one motion. There will
be no separate discussion of items unless requested to be removed by a Commissioner. If
removed the item will be considered immediately following the adoption of the Consent
Agenda. (Favorable roll call vote of majority of Commissioners present to approve, unless
otherwise noted in consent item.)
6.1. Terminate Contract for Private Redevelopment with Jester Concepts LLC
6.2. Rescind Grant Agreement with Arbor Sunnyside Properties, LLC
Page 1 of 62
6.3. HRA Minutes from February 27, 2025 regular meeting and March 13, 2025 special work
session minutes.
7. Reports/Recommendations: (Favorable vote of majority of Commissioners
present to approve except where noted)
7.1. Proposed Financing Structure for Public Parking at 7001 France Avenue
7.2. 2023 Affordable Housing Compliance Report - Update
8. Executive Director Comments
8.1. SPARC Loan with Edina Chamber of Commerce - Status Update
8.2. Preparation for Future Discussion about Tax Increment Financing
9. HRA Member Comments
10. Adjournment
Page 2 of 62
d
ITEM REPORT
Date: March 27, 2025 Item Activity: Approve
Meeting: Housing & Redevelopment Authority
Agenda Number: 6.1
Prepared By: Bill Neuendorf, Economic Dev Mgr
Item Type: Report & Recommendation Department: Community Development
Item Title: Terminate Contract for Private Redevelopment with Jester Concepts LLC
Action Requested:
Approve the formal termination of the June 2022 Contract for Private Development with Jester
Concepts, LLC and authorize the Executive Director to issue formal notice of termination.
Information/Background:
In June 2022, the HRA entered into a contract with Jester Concepts LLC to purchase a portion of the
vacant site at 5146 Eden Avenue for the construction of a full-service restaurant with indoor and
outdoor dining. The contract was amended in February and August 2023.
With the termination of the primary contract with United Residential, LLC for the senior cooperative
housing, there is no path to closing the transaction with Jester Concepts. The due diligence period
has expired and the deadline to secure final zoning and site plan approvals has passed. The owner has
been notified of these lapsed deadlines and affirms that there is not a path to closing on this current
transaction.
The City Attorney has prepared a letter that formally notifies Jester Concepts that the expired
contract is terminated. In accordance with the contract, the $20,000 earnest money that has been
held in escrow by the HRA will be refunded.
This official termination notice is intended to ensure that the site has a clean title so that it can be
transferred to the City. Staff recommends that the expired contract be terminated.
Resources/Financial Impacts:
This has a neutral budget impact. The HRA has been holding $20,000 in escrow. These funds will be
returned to the buyer.
Relationship to City Policies:
NA
Supporting Documentation:
1. Jester Concepts notice of termination 3-27-2025
Page 3 of 62
March 27, 2025 Send via registered or certified mail
Mr. Brent Frederick
Jester Concepts, LLC
730 N. Washington Ave.
Minneapolis, MN 55401
RE: NOTICE OF TERMINATION
CONTRACT FOR PRIVATE DEVELOPMENT DATED JUNE 2, 2022
Dear Mr. Frederick,
This letter shall serve as the Edina Housing and Redevelopment Authority’s (“Authority”) notice to you
that the Authority is hereby terminating the Contract for Private Development between the Authority
and Jester Concepts, LLC, dated June 2, 2022, as amended on February 27, 2023 and August 24, 2023
(collectively, the “Contract”), pursuant to Sections 3.2(a) and 3.4(k) of the Contract..
The Due Diligence Period has expired. The deadline to secure final zoning and site plan approvals has
passed. Since the Senior Cooperative Developer (United Residential, LLC) terminated their contract and
a path forward to deliver the Restaurant/Hospitality Project does not currently exist without extensive
reworking of the site plan and Contract, there is no path to closing.
As outlined in Sections 3.2(a) and 3.4(k) of the Contract, the Authority will refund your $20,000 earnest
money in full. A check will be mailed to your office separately.
As we discussed on the phone, the Authority/City intends to select a new development team for the site
this year. You are welcomed and encouraged to consider a new proposal for the site. The preferred
type of buyer is a development team that can deliver a combination of commercial and multi-family
residences on the site. Previously, I sent you a copy of the RFP that was recently published.
Thank you for your continued interest in the site and your commitment to the community.
Sincerely,
Scott Neal
Executive Director
c. Bill Neuendorf, Economic Development Manager
Brent Frederick via email
Pete Rostroski, Rokos Advisors via email
Page 4 of 62
d
ITEM REPORT
Date: March 27, 2025 Item Activity: Approve
Meeting: Housing & Redevelopment Authority
Agenda Number: 6.2
Prepared By: Bill Neuendorf, Economic Dev Mgr
Item Type: Other Department: Community Development
Item Title: Rescind Grant Agreement with Arbor Sunnyside Properties, LLC
Action Requested:
Rescind the grant agreement with Arbor Sunnyside Properties, LLC and authorize Executive Director
to issue formal notice to the grantee.
Information/Background:
The HRA entered into a grant agreement with Arbor Sunnyside Properties, LLC on May 16, 2024.
The grant was intended to partially reimburse the property owner for the cost of improving the
surface parking lot to make it more convenient for people with physical limitations to enter the rear
doorways of several commercial businesses. The maximum grant award is $24,000 and no funds have
been issued to the grantee.
Unfortunately, the cost of the work has grown exponentially due to engineering requirements to
expand the scope to include a storm water retention system. The property owner notified staff that
due to the major cost increase, the parking lot project will be abandoned and the grant will not be
needed.
Fortunately, this turn of events did not hinder the Oh Crepe cafe from remodeling the tenant space.
They have been in business since June 2024.
Staff recommends that the grant agreement with Arbor Sunnyside Properties be formally rescinded.
The funds pledged to this project will be retained in the SPARC program for potential use elsewhere
in the City.
Resources/Financial Impacts:
NA
Relationship to City Policies:
NA
Supporting Documentation:
1. Arbor Sunnyside - 2-18-2025 email
Page 5 of 62
From: Steve Young <steve@arborgroup.net>
Sent: Tuesday, February 18, 2025 5:28 PM
To: Bill Neuendorf <BNeuendorf@EdinaMN.gov>
Subject: RE: Sunnyside Parking Lot-Edina - Bldg. Dept. Comments
EXTERNAL EMAIL ALERT: This email originated from outside the City of Edina. Do not click links or open attachments unless you
recognize the sender and know the content is safe.
Hi Bill,
My contractor is telling me that designing and building an underground storage system for
this project is going to hit six figures. If the City is going to require this system, then I don’t
see how this project is viable anymore. The frustrating part is I still don’t understand how
this project will worsen flooding in the area. I’m not adding any additional impenetrable
surface area and my elevation is above potential flooding as seen on the below DNR flood
map.
I still feel this is a great project to bring accessibility to Sunnyside Shoppes but
unfortunately, I’ll need to take a pass.
Thank you for all your hard work, Steve
From: Bill Neuendorf <BNeuendorf@EdinaMN.gov>
Sent: Wednesday, February 5, 2025 10:29 AM
To: Steve Young <steve@arborgroup.net>
Subject: RE: Sunnyside Parking Lot-Edina - Bldg. Dept. Comments
Hi Steve,
Unfortunately, the engineering staff has zero flexibility in this matter. I’ve spoken with them
a few times about the goals & intent of this simple parking lot project, however, they are
not willing/able to change their position.
Page 6 of 62
If a portion of the rear parking lot is raised, there is concern that future heavy rains will
worsen the flooding risk in this area. Thus, some provision would need to account for the
water run-off from the parking lot.
City engineering staff has suggested a possible resolution (small underground holding
tank) to the contractor. But this will definitely add to the cost.
Thus the dilemma …
If you simply re-pave and re-stripe w/o making ADA ramp improvements, you can avoid
flood concerns, but the $24k grant would no longer be available.
If you re-grade and re-pave, you’ll still qualify for the $24k grant but your project cost will
increase to satisfy flooding concerns.
The choice is yours.
Let me know how you’d like to proceed.
Bill Neuendorf, Economic Development Manager
952-826-0407 | Fax 952-826-0390 | Cell 952-491-1143
BNeuendorf@EdinaMN.gov | EdinaMN.gov
Page 7 of 62
Page 1
MINUTES
OF THE REGULAR MEETING OF THE
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
FEBRUARY 27, 2025
7:30 A.M.
I. CALL TO ORDER
Chair Pro Tem Pierce called the meeting to order at 7:30 a.m. then explained the processes created
for public comment.
II. ROLLCALL
Answering rollcall were Chair Pro Tem Pierce, Commissioners Agnew and Risser.
Absent: Chair Hovland, Commissioner Jackson
III. PLEDGE OF ALLEGIANCE
IV. MEETING AGENDA APPROVED – AS PRESENTED
Motion by Commissioner Risser, seconded by Commissioner Agnew, approving the
meeting agenda as presented.
Ayes: Agnew, Pierce, and Risser
Motion carried.
V. COMMUNITY COMMENT
David Frankel, 4510 Lakeview Drive, asked about the innovation lab and the lack of transparency
the City has in regard to the status of the lab and any money lent to the lab.
Andy Brown, 5512 Park Place, asked if the business innovation lab has been closed and how much
money the City has lost because of the lab.
Economic Development Manager Neuendorf stated that the lab is having trouble maintaining the
operations of the business programming, but they have not defaulted the loan agreement.
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 Agnew, seconded by Commissioner Risser, approving the
consent agenda as presented:
VI.A. DRAFT MINUTES OF REGULAR MEETING OF JANUARY 16, 2025 AND SPECIAL
WORK SESSION MEETING OF FEBRUARY 13, 2025
VI.B. RESOLUTION NO. 2025-03, AUTHORIZING LEASE EXTENSION WITH UNITED
STATES POSTAL SERVICE
Ayes: Agnew, Pierce, and Risser
Motion carried.
VII. REPORTS AND RECOMMENDATIONS
VII.A. PENTAGON VILLAGE – PROJECT UPDATE – PRESENTED
Economic Development Manager Neuendorf presented background information regarding Pentagon
Village and project updates for 2024. Economic Development Manager Neuendorf stated that the
developer has requested an amendment to their TIF agreement and noted that the staff
recommendation is to not amend their TIF agreement at this time.
The Board asked if there are any benefits to amending the TIF agreement.
Page 8 of 62
Minutes/HRA/February 27, 2025
Page 2
Economic Development Manager Neuendorf stated that there is no benefit to the community in
amending the TIF agreement, only benefit to the developer.
VII.B. 5146 EDEN AVENUE – SOLICITATION OF PROPOSALS TO SELL AND REDEVELOP
LAND – PRESENTED
Economic Development Manager Neuendorf said this item pertained to the final draft of the Request
for Proposal for this vacant site that is intended to be sold for redevelopment purposes.
The Board suggested changing the wording in the housing type and affordability section and the
number of stories preferred.
The Board provided feedback regarding preference for mixed-use on the site and alternative Fire
Station locations.
Fire Chief Slama gave information on their preferred location for the Fire Station, the MnDOT site,
and other options they have been considering.
Economic Development Manager Neuendorf discussed the timeline for this proposal.
VIII. EXECUTIVE DIRECTOR COMMENTS – Received
VIII.A. 7001 FRANCE AVENUE – PROJECT UPDATE
VIII.B. SPECIAL LEGISLATION FOR TIF IN EDINA – UPDATE
IX. HRA COMMISSIONER COMMENTS – Received
X. ADJOURNMENT
Motion made by Commissioner Agnew, seconded by Commissioner Risser, to adjourn
the meeting at 8:25 a.m.
Ayes: Agnew, Pierce, and Risser
Motion carried.
Respectfully submitted,
Scott Neal, Executive Director
Page 9 of 62
Page 1
MINUTES
OF THE SPECIAL WORK MEETING OF THE
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
MARCH 13, 2025
7:30 A.M.
I. CALL TO ORDER
Chair Hovland called the meeting to order at 7:34 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. MEETING TOPICS
III.A. EDINA’S CHANGING DEMOGRAPHICS AND AFFORDABLE HOUSING NEEDS
Affordable Housing Development Manager Hawkinson presented information regarding 2024-2025
Budget Work Plan, goals, and grounding definitions.
Sustainability Manager Bayer discussed who lives in Edina, including the age breakdown of occupied
housing trends older than Hennepin County, the age breakdown of Edina residents overall relative
to the County, occupied housing type within age, households with children, family income, race and
ethnicity, housing type within race/ethnicity, and most diverse areas in Edina.
The Board asked about comparing Edina’s demographics to other cities more similar to them rather
than to Hennepin County.
Affordable Housing Development Manager Hawkinson discussed what an existing Edina 4-person
household can afford, what an existing Edina senior household can afford, income demographics, and
the housing cost-burdened owners and renters in Edina.
Community Development Coordinator Lewis presented information regarding people who
commute to Edina for work, local workforce wages insufficient to live in Edina without being Housing
Cost Burdened, and housing variety in Edina.
Affordable Housing Development Manager Hawkinson presented information regarding single-family
homes less than $500,000, increasing housing prices, and growth in rent vs. growth in income.
Sustainability Manager Bayer presented information regarding median home price by neighborhood,
reduced supply of moderate-priced homes due to tear downs and rebuilds, households experiencing
poverty, and residential taxes relative to land use.
Community Development Coordinator Lewis presented information regarding the national
demographics of household types.
Community Engagement Manager Lamon presented information regarding how housing impacts
student enrollment, the 2023 Quality of Life survey, and the housing type matrix.
The Board asked questions regarding school enrollment trends, available housing stock, what can
realistically be accomplished, and traffic impacts for Edina residents.
The Board gave feedback and discussed what the community really desires, the importance of being
on the ground and talking to residents, how to retain affordable housing, options for seniors to move
Page 10 of 62
Minutes/HRA/March 13, 2025
Page 2
out of their single-family homes, why are they considering investing into this as a community, holding
new developments accountable for affordable housing, and picking the spots where they can make
an impact.
City Manager Neal stated that the major discussion at the NLC conference was housing, and
everyone is searching for the answer.
Affordable Housing Development Manager Hawkinson discussed what their next steps will be for
the next meeting and what the City has control over.
The Board expressed their desire to wait to have their next meeting until the legislative session is
over.
IV. ADJOURNMENT
The meeting was adjourned at 8:54 a.m.
Respectfully submitted,
Scott Neal, Executive Director
Page 11 of 62
d
ITEM REPORT
Date: March 27, 2025 Item Activity: Discussion
Meeting: Housing & Redevelopment Authority
Agenda Number: 7.1
Prepared By: Bill Neuendorf, Economic Dev Mgr
Item Type: Report & Recommendation Department: Community Development
Item Title: Proposed Financing Structure for Public Parking at 7001 France Avenue
Action Requested:
No action required; for discussion purposes only.
Information/Background:
This discussion item pertains to a potential rearrangement of the public financing structure use to
finance and build the 540-stall public parking garage anticipated at 7001 France Avenue. This parking
structure is critical to the financing and occupancy of the proposed office building on the site.
Staff will present an overview of the proposal and the developer will be available to answer questions.
No action is required at this time. However, it is helpful to understand the HRA's level of interest in
pursuing creative financing to stimulate this $250+ million investment.
Resources/Financial Impacts:
NA
Relationship to City Policies:
Tax Increment Financing Policy
Supporting Documentation:
1. 7001 France Ave - Staff Report 3-27-2025
2. 7001 France - proposed financing structure for discussion 3-27-2025
3. Staff Presentation 3-27-2025 PDF
Page 12 of 62
City of Edina • 4801 W. 50th St. • Edina, MN 55424
Summary:
Mortenson Development and Orion Investments request that the HRA consider alternative public
financing strategies to stimulate the construction of the privately financed office building.
Information / Background:
In June 2022, the HRA and City entered into TIF Redevelopment Agreements with Orion Investments
and Mortenson Development dba MDI France Ave, LLC to redevelop the aging commercial buildings at
7001 France Avenue. This 5.8-acre site was previously occupied by an outdated branch bank and
outdated office building.
Although the initial relocation of the US Bank facility was completed successfully, the subsequent
development of Site A (new residential high rise) and Sites B/C (new office and new parking garage), has
been delayed due to post-
pandemic hesitancy in the
capital markets that
typically provide financing
for these types of large
scale projects.
After the new branch
bank was opened for
business, the developers
continued to move
forward and cleared the
site to remove the
obsolete and vacant
buildings. Despite their
efforts, construction of
Sites A-B-C has not yet
begun.
Date:March 27, 2025
To:Chair and Members of the Edina Housing & Redevelopment Authority
From:Bill Neuendorf, Economic Development Manager
Subject:Proposed Financing Structure for Public Parking at 7001 France Avenue
Page 13 of 62
7001 France Avenue
Staff Report 3-27-2025
Page 2
An Alternative Path Forward
City staff met with the developers to better understand the challenges and to discuss possible strategies
that the HRA and City might consider to ‘jump start’ the next phase of construction at this highly visible
commercial intersection.
The most obvious strategy would be for the City/HRA to take a more active role in the financing and/or
construction of the public parking garage on Site C. This facility was initially intended to be built and
owned by the Site B office developer and subject to a permanent public parking easement. Although the
facility has been sized to accommodate a fully occupied office/retail building, it is also designed to
provide general public parking during the daytime hours as well as during evenings and weekends. The
parking stalls would be available on a first-come, first-served basis and would likely include a 2-3 hour
time restriction to manage the public use of the facility. Considering its public use, the facility could
qualify for taxable or tax-exempt bond financing. This in turn could create more attractive financing
conditions for the Site B office building. A shift in the financing structure is anticipated to be sufficient to
restore the momentum at this site.
Past Examples in Edina
Construction of structured parking is very expensive. It is not unusual for the up-front construction cost to
hinder desirable investments. Since the 1970s, the City of Edina has supported private investment, a vibrant
local economy and a strong property tax base by working in partnership with local businesses to provide
financing mechanisms for public parking. Examples include the three parking structures at 50th & France and
the Grandview Parking Structure located behind Jerry’s Foods on Vernon Ave. The City also played a
critical financing role in the structured parking of Centennial Lakes office buildings and Edinborough Park
office building.
Parking costs are not unique to Edina. These costs create challenges for many projects in Minnesota. As a
potential solution, parking costs are specifically identified in Minnesota Statute as being eligible for TIF
financing.
Rationale to Consider Alternative Approaches
At this point in time, neither Site A (residential) or Site B (office) are able to secure private financing. Due
to the anticipated demand for Class A office space at this location, Site B (office) is likely to be built first.
But burdened with approximately $25 million in debt related to the Site C public parking structure, the tax
generating commercial building on Site B is unable to proceed.
Separating the long term debt of the office building and the public parking structure is anticipated to
achieve the following:
Page 14 of 62
7001 France Avenue
Staff Report 3-27-2025
Page 3
- Create conditions where Site B office can be privately financed and constructed
- Attract approximately $100 million in private investment to Site B
- Attract and retain high profile professional companies in Edina
- Attract new restaurants and/or retail businesses to Edina
- Create professional jobs and service industry jobs
- Remove a vacant lot from a highly visible commercial intersection
- Apply the planning and design principles adopted in the Greater Southdale Design Guidelines
- Increase the property tax base – both the base tax level and the incremental tax level
- Increase the sales tax base in Edina
- Create conditions to attract investors and residents to Site A (residential)
Overview of Public Financing Proposal
A detailed overview of the proposed financing is attached. Key elements include:
•Construct the parking garage in two phases to reduce initial costs
•Consider the shared use of Site C parking garage by users of both Sites A and B to ‘right size’
parking in future
•Consider the creation of a Special Purpose Entity to guide the financial partnership between the
HRA/City and Developer B
•Rely on the HRA or City’s credit or lease commitment to issue taxable or tax-exempt lease-
revenue bonds (or similar) in lieu of a traditional construction loan or mortgage
•Eliminate the $17 million TIF Note for Site B developer and use incremental property taxes to
pay for the parking structure directly
•Contractual agreements between the City, HRA and developer could mitigate financial risk to the
City/HRA in case there is a shortfall in the amount of incremental taxes generated on the site.
•Operating agreements between the City, HRA and developer could ensure that day-to-day costs
of operating the parking garage are paid by the Site B owner.
•Application of Chapter 459 (or 429) special assessments could be applied to the nearby
properties that use the public parking garage in the future when large-scale repairs or
improvements are necessary.
Potential Risks to the HRA and City
The elimination of the Pay-as-you-go TIF Note does shift some of the financial risk to the HRA and/or
City. These risks should be fully evaluated to limit risks to the City/HRA and taxpayers. Additional
research will be necessary to minimize and mitigate the potential risks. Potential areas of risk include:
Page 15 of 62
7001 France Avenue
Staff Report 3-27-2025
Page 4
1) Is there sufficient demand for users of new Class A office and retail/restaurant space at this
location? And can private funding be secured for Site B office?
2) Will the issuance of approximately $17 million in debt for public parking have a negative impact
to the credit rating of the City?
3) Will there be sufficient incremental property taxes created by the project to repay the debt?
4) Will the debt be attractive to bond holders if the TIF revenue stream is not enhanced with a
pledge from the developer or the City/HRA?
5) Will additional bond payments be required from the City’s or HRA’s general tax levy?
Next Steps:
While no formal action is requested at this time, it will be helpful to understand the HRA Board’s level
of interest in pursuing a creative financing approach that allows the approved 4-phase mixed-use project
to continue to move forward.
Questions to Consider:
1) Is the HRA interested in using its financing abilities to advance this project if the City & HRA’s
credit rating is not impacted.
2) Is the HRA interested if debt repayment is fully covered by the project and/or developer
without risk of impacting the HRA’s or City’s general purpose tax levy?
3) Is the HRA interested if the HRA’s or City’s general purpose tax levy serves as a secondary
payment source if the tax increment is insufficient?
4) Is the HRA willing to see the anticipated $250+ million investment vision for this 5.8 acre site
not realized?
Please note that since the developer already removed the blighted buildings and is subject to the typical
5-year deadline to construct, the redevelopment of this site could become even more complicated if the
approved plan with three separate buildings does not move forward. With the blight removed, it is
unlikely that a replacement TIF District could be created unless special legislative authority is granted in
the future.
If the HRA is generally supportive of the arrangement described in the attached proposal, staff will
complete the additional research and prepare an amendment to the Redevelopment Agreement for
formal consideration by the HRA and City. This amendment would then be relied upon by the
developer as they pursue private investors for Site A residential and Site B office.
# # #
Page 16 of 62
7001 France – Proposed Financing Structure for Public Parking For Discussion
March 27, 2025 Page 1
For Discussion 3-27-2025
Proposed Financing Structure for Public Parking at 7001
France Avenue
Background
•Site plan approved 2022 is not financeable under current economic conditions, even
with existing TIF pledge
o $22 million in TIF reimbursement pledged
▪Site A: $5 million of costs reimbursed through interest-bearing TIF Note
▪ Site B: $17 million of costs reimbursed through interest-bearing TIF Note
•Eligible costs include overall site improvements and Site C
parking ramp
•Amount is dependent on Site A increment
•Site A residential is not financeable at this time; construction may not begin for 2+
years
•Site B office has demand among professional businesses seeking a modern Class A
space in a top tier location but unable to finance both Site B office & Site C parking
simultaneously
•Site B is anticipated to be completed before Site A
•Completion of this project will create many short-term and long-term benefits to the
community
Overview
•Public private partnership proposed to separate the financing of Sites A, B & C and
take advantage of tax-exempt financing that may be available for the HRA, City or a
Special Purpose Entity (SPE)
o Create a special purpose entity (“SPE”) in partnership with HRA, City and
Developer B
Page 17 of 62
7001 France – Proposed Financing Structure for Public Parking For Discussion
March 27, 2025 Page 2
o SPE entity or City/HRA to own property and build Site C parking structure in two
phases
o City/HRA to lease parking structure
o City/HRA to acquire ownership of property and completed parking structure
after expiration of lease for nominal amount
o Developer B to be responsible for operating and maintenance costs
•Eliminate the $17 million pay-as-you-go TIF Note anticipated for Site B/C
o Utilize tax increment revenues for lease payments
•No changes anticipated to $5 million TIF Note for Site A infrastructure
Definitions
City – the City of Edina
CM-AR – A form of construction where the owner competitively bids and hires a Construction
Manager using the “at risk” format; the selected Construction Manager provides a firm
maximum price and holds the risk if actual costs exceed the price quoted
Developer A – the real estate developer and owner for the proposed residential building on
Site A, presumed to be Mortenson Development or related entity
Developer B – the real estate developer and owner of the proposed office building on Site B,
presumed to be Orion Investments or related entity
HRA – the Edina Housing and Redevelopment Authority
Site A – the 2.0 acre site on the northeast corner of the property intended to be a residential
building with commercial tenants on portions of the first floor
Site B – the 2.0 acre site on the northwest corner of the property intended to be a commercial
office building with retail and restaurant tenants on portions of the first floor
Site C – the 0.9 acre site on the southeast corner of the property intended to be a public
parking facility with parking stalls shared by employees, clients and customers of Sites A and
B as well as the general public
SPE – a Special Purpose Entity that is established for a defined business purpose and
capable of accessing tax-exemption on forms of financing
Page 18 of 62
7001 France – Proposed Financing Structure for Public Parking For Discussion
March 27, 2025 Page 3
Proposed Phased Delivery of Public Parking
•Site C parking garage to be built in two phases to reduce costs and increase efficiency
o Sized based on projected cash flow and parking needs of Site B office
•First phase includes approximately 340-440 structured parking stalls over 4-5 levels on
Site C
o 100-200 temporary surface parking stalls also built by Developer A or B on Site A
o Approximately 128 underground parking stalls built by Developer B on Site B
•Second phase would add approximately 100-200 structured parking stalls constructed
with additional 2-3 levels on Site C for a total of 540 stalls
o Surface parking on Site A removed after the Site C structure is complete
•An amendment to the PUD will be considered separately. This amendment would
include a phased construction strategy that includes temporary surface parking
Proposed Construction Strategy
1) No binding commitments made by the HRA/City until the financial closing of Site B
2) Developer B and HRA create partnership to deliver Site C parking
3) Developer B transfers Site C land to HRA or SPE for nominal amount
4) HRA issues RFP to bid and select Construction Manager At Risk (CM-AR)
5) HRA hires CM-AR
6) CM-AR hires contractor(s), vendors and suppliers to build Site C parking
7) CM-AR, SPE, HRA/City & Developer B determine how to most efficiently construct
parking facility in two separate phases
8) HRA/City (or SPE, if beneficial) provides initial construction-term financing
a. Current estimates to build complete Site C parking garage is approximately $25
million
b. Need to clarify the cost to build Phase 1 and the process of determining when
to build Phase 2
c. Need to establish maximum cost to build Phase 1 and Phase 2 and determine
whether City or Developer B is responsible for cost of Phase 2
d. Tax-exempt debt is anticipated
Page 19 of 62
7001 France – Proposed Financing Structure for Public Parking For Discussion
March 27, 2025 Page 4
9) Upon completion, SPE will lease Site C parking to HRA/City for 15-30 years with
guaranteed rent payments with lease details determined when costs and timing are
better understood
Proposed Lease Structure
•Owner and Lessor: SPE, likely a tax-exempt partnership between Developer B and
the HRA/City
•Lessee: HRA or City of Edina
•Lease Guarantor: HRA or City of Edina
•Term of Lease: 15 to 30 years TBD based on projected rent payments
•Leased Premises: Site C parking structure to be constructed in two phases; number
of stalls in Phase 1 sized by the parking need of Site B office and projected tax
increment collected from Site B office
•Use of Leased Premises: Site C parking structure will be general public parking with
time restrictions (2-3 hour limit and no overnight parking, for example); some of the
parking stalls will be available to tenants, clients and customers of Site A office (with
no time restrictions) provided that 50% of the parking remains available for the general
public and provided that such parking arrangements do not violate the qualifications
for tax-exempt financing
•Rent, Phase 1 parking structure: Annual rent payment limited to received
incremental property taxes from Site B office less any necessary administrative
expenses
o Estimated to be $940,000 annually
o Assuming 20-year term, this will fund approximately $12.4 million in project costs
•Rent, Phase 2 parking structure: Annual rent payment limited to received
incremental property taxes from Site B (less administrative costs) plus approximately
40% to 90% of received incremental property taxes from Site A with actual amount
determined based on future payment structure of TIF Note for Site A; total rent paid for
parking structure limited to an agreed upon amount defined in the lease
o Estimated to be $940,000 from Site B plus up to $1,160,000 from Site A for total
of $2,100,000 annually
•Rent Payment Dates: paid approximately 60 days after incremental taxes received by
the City; payments anticipated February 1st and August 1st
•Rent Increases: None
Page 20 of 62
7001 France – Proposed Financing Structure for Public Parking For Discussion
March 27, 2025 Page 5
•Rent Commencement: Beginning the following February 1st or August 1st after
completion of each phase of Site C parking improvements and receipt of incremental
property taxes from Site B and/or Site A
•Site C Construction Commencement: Contingent on financial closing and
construction commencement of Site B office
•Improvement Ownership Long-term: At the end of lease term, Site C improvements
revert back to Lessee for the minimum legal consideration (eg $1.00)
Proposed Financing and Debt Repayment Strategy
1) HRA or City issues public debt secured by the HRA/City lease of Site C parking
structure
a. Site C property declared tax-exempt
b. Pursue tax-exempt debt financing, if able to accommodate qualifications
c. To secure favorable borrowing terms, City/HRA may need to pledge additional
payments in case incremental taxes fall below projections; this may impact the
City/HRA property tax levy and credit rating
d. To avoid impact to property tax levy and credit rating, lease payments would be
limited to available tax increment collected with no recourse to the City or HRA
for any shortfall
i. Shortfall agreement and minimum assessment agreement with
developer are possible but debt would lose tax-exempt status and
increase the total cost of the project
ii. Note that taxable financing with the City/HRA credit rating still achieves
more favorable terms than private financing
2) HRA uses incremental taxes received from Sites A & B to make lease payments
3) The lease repayment should not exceed $17 million (the estimated principal amount of
the original TIF Note for Sites B/C
Proposed Short Term Operational and Maintenance Strategy
1) Developer B, SPE and HRA/City enter into operations and maintenance agreement for
the duration of the lease term (20-years)
2) Tenants or employees may need to purchase parking permits to allow for effective
parking management and generate additional cash flow to support debt repayment
Page 21 of 62
7001 France – Proposed Financing Structure for Public Parking For Discussion
March 27, 2025 Page 6
provided however that any such arrangements must not violate the qualifications of the
tax-exempt financing status
3) Developer B responsible to schedule, deliver and pay for operational costs during term
of lease including but not limited to utilities, security, maintenance/repairs, cleaning
and management
a. Subject to industry best practice and City oversight
Proposed Long Term Operational and Maintenance Strategy
1) Developer B, SPE and HRA/City enter into long-term operation and maintenance
agreement
a. Developer A may also be included, if Site A is reliant on Site C parking
2) Developer B responsible for day-to-day operations, repairs and management, possibly
through the creation of a Special Service District or other contractual mechanism
3) HRA/City responsible to schedule, deliver and manage the public parking facility
4) Developer B and any other surrounding property owner that benefits from public
parking to bear cost of future improvements and major repairs to the Site C parking
facility via the typical procedures identified in Chapter 429/459 of Minnesota Statutes
# # #
Page 22 of 62
7001 France Avenue
Proposed Financing Structure for Public Parking Garage
For Discussion
Presentation to HRA Board
Bill Neuendorf
March 27, 2025
Page 23 of 62
Overview
1)Background
2)Ongoing Financial Challenges
3)Proposed Modification
4)Potential Risks to Consider
5)Discussion
Questions to Consider
1)Is the HRA interested in using its financing abilities to
advance this project if the City & HRA’s credit rating
is not impacted.
2)Is the HRA interested if debt repayment is fully
covered by the project and/or developer without risk
of impacting the HRA’s or City’s general purpose tax
levy?
3)Is the HRA interested if the HRA’s or City’s general
purpose tax levy serves as a secondary payment
source if the tax increment is insufficient?
4)Is the HRA willing to see the anticipated $250+
million investment vision for this site not realized?
Page 24 of 62
1) Background - Location Map
Page 25 of 62
1) Background - Approved Site Plan
Site B
Office
Site A
Residential
Site C
Parking
Page 26 of 62
1) Background - Rendering looking Southeast
Page 27 of 62
1) Background – Rendering looking Northeast
Site C
Parking
Site A
Residential
Site B
Office
Page 28 of 62
1) Background – Renderings of Parking Garage
Page 29 of 62
1) Background – Vision for Shared rather than Private Parking
To promote more efficient use of
land, the 2018 Greater Southdale
Plan recommends a shift to
“District” or shared parking
instead of redundant private
parking lots
Source: Greater Southdale Plan, pages 112-113
Page 30 of 62
2) Ongoing Financial Challenges – Interest Rates, Inflation & Hesitancy
Economic Conditions in 2022
-Anticipated 4.25% interest rate
-Total funding gap of $22 M
-50% of tax increment from Site A
solved a $5 M funding gap
-90% of tax increment from Site B
and 40% tax increment from Site
A solved a $17 M funding gap
-TIF used to reimburse for costs of
site infrastructure and parking
Economic Conditions in 2024-25
-Interest rate increased to 6.50%
-Same incremental taxes collected
from Sites A & B only fund $17.3 M
-$4.7 M funding shortfall
-Assume costs are the same
-Escalating costs also impact the
project but are difficult to define
at this time
Page 31 of 62
2) Ongoing Financial Challenges – New Approach to resolve Financing Gap
Impacts to Site A Residential
-Reduction in TIF value is real
but minor compared to other
components of capital stack
-Site A is not ready to proceed
at this time
Impacts to Site B Office
-Developer is actively pursuing debt
and equity
-Devaluation of TIF pledge must be
resolved to lock in private investors
-Alterative use of tax increment for
the parking structure is proposed
Page 32 of 62
3) Proposed Modification – Fundamentals to Consider
•City & HRA have strong borrowing power
•AAA rating from Standard and Poors
•Aaa from Moody’s
•Governments with strongest credit ratings can borrow funds at lower interest rates
•City & HRA or Special Purpose Entity can borrow at tax-exempt rates for
governmental/public uses
•Lower interest rates also secured if City or HRA pledges guaranteed repayment
stream instead of relying solely on incremental property taxes
•Addresses potential shortfall in revenue if tax increment is not collected as initially
projected
Combination of tax-exempt financing supported by repayment
pledge from City/HRA would lower the cost of capital closer
to levels that solve the original financing gap.
Page 33 of 62
3) Proposed Modification – Outline for Discussion
•Construct the parking garage in two phases to reduce
initial costs
•Consider the shared use of Site C parking garage by
users of both Sites A and B to ‘right size’ parking in
future
•Consider the creation of a Special Purpose Entity to
guide the financial partnership between the HRA/City
and Developer B
•Rely on the HRA or City’s credit or lease
commitment to issue taxable or tax-exempt lease-
revenue bonds (or similar) in lieu of a traditional
construction loan or mortgage
•Eliminate the $17 million TIF Note for Site B
developer and use incremental property taxes to pay
for the parking structure directly
•Contractual agreements between the
City, HRA and developer could mitigate
financial risk to the City/HRA in case there is
a shortfall in the amount of incremental
taxes generated on the site.
•Operating agreements between the City,
HRA and developer could ensure that day-to-
day costs of operating the parking garage are
paid by the Site B owner.
•Application of Chapter 459 (or 429) special
assessments could be applied to the nearby
properties that use the public parking garage
in the future when large-scale repairs or
improvements are necessary.
Page 34 of 62
4) Potential Risks to Consider – How will Private Investors Respond?
With this proposal, the original financing gap could be
resolved, but that is no guarantee that private investors
will finance the project immediately.
No large project is easy and success takes times.
1)Is there sufficient demand for users of new Class
A office and retail/restaurant space at this location?
And can developer secure private funding for Site
B office?
2)Will the debt be attractive to bond holders if
the TIF revenue stream is not enhanced with a
pledge from the developer or the City/HRA?
Page 35 of 62
4) Potential Risks to Consider – impact to City’s Overall Finances?
With this proposal, some risk could shift to the HRA/City. These risks should be fully evaluated to limit risks
to taxpayers. Additional research will be necessary to minimize and mitigate the risks. Potential risks include:
1)Will the issuance of approximately $17 million in debt for public parking have a negative impact to the
credit rating of the City?
•Debt or lease are considered long-term debt obligation, the same for streets, parks & fire stations
2)Will there be sufficient incremental property taxes created by the project to repay the debt?
3)Will additional bond payments be required from the City’s or HRA’s general tax levy?
Fred Richards Park Braemar Arena New Fire Station(s) Roads and UtilitiesPage 36 of 62
4) Potential Risks to Consider – Mitigating Risk to the City/HRA
There are several mitigation strategies that could be
pursued to reduce or eliminate fiscal impacts to the
City/HRA, including:
•Identifying alternative revenue sources to supplement
tax increment such as:
•parking revenues
•special assessments by owner or tenants
•TIF pooling
•Minimum assessment agreements on Site B and Site A
•Personal guarantees from developer
•Letter of credit from developer
Page 37 of 62
4) Potential Risks to Consider – In conclusion
Developer is not asking
for additional expenditure
of TIF monies beyond that
approved in 2022 Developer is asking for
modifications to the method that
TIF monies will be used to
finance the parking structure
Developer is asking to use a full
funding commitment from the
City/HRA to reduce borrowing
costs
This funding commitment is
anticipated to deliver two major
benefits to the City
-Ownership of a new public
parking garage
-Large scale redevelopment of
this site
Page 38 of 62
5) Discussion
Questions to Consider
1)Is the HRA interested in using its financing abilities to
advance this project if the City & HRA’s credit rating
is not impacted.
2)Is the HRA interested if debt repayment is fully
covered by the project and/or developer without risk
of impacting the HRA’s or City’s general purpose tax
levy?
3)Is the HRA interested if the HRA’s or City’s general
purpose tax levy serves as a secondary payment
source if the tax increment is insufficient?
4)Is the HRA willing to see the anticipated $250+
million investment vision for this site not realized?
Next Steps
No formal action is needed at this time .
General direction is requested so that the
developer knows how to proceed.
If the HRA is generally supportive, staff
will complete additional research and
prepare a contract amendment for formal
consideration by the HRA and City.
Page 39 of 62
d
ITEM REPORT
Date: March 27, 2025 Item Activity: Information
Meeting: Housing & Redevelopment Authority
Agenda Number: 7.2
Prepared By: Stephanie Hawkinson, Affordable Housing
Development Manager
Item Type: Report & Recommendation Department: Community Development
Item Title: 2023 Affordable Housing Compliance Report - Update
Action Requested:
No action required.
Information/Background:
In December 2018, the City entered into a service contract with Affordable Housing Connections
(AHC) to monitor all market rate developments that contain affordable units. The compliance
monitoring is to confirm and verify the following:
• The approved number of units have rents that are deemed affordable per the agreement
made with the City (with rents at the 50% and/or 60% Area Median Income levels); and
• The affordable units are being rented to households who are income-qualified.
On December 19, 2024, the HRA received a compliance report on the compliance status of
affordable housing units within market rate developments. At that time, two developments were in
full compliance, three had open deficiencies (meaning some paperwork was missing), and two were
not compliant. Of the latter, Aria has not been in compliance since the City began reviewing. The
development complies with the words in the agreement that was put in place at the time of approval,
but not with the intent of the program. Therefore, we have removed this development from our list
of affordable developments. No City financing was used to support this development.
There are limits in what the City can do when a development is non-compliant. For developments
that receive on-going TIF payments, the City can withhold payments until the development is brought
into compliance. For developments where the affordable housing requirement is mentioned only in
the SIPA, previous Commissioners determined that there was no recourse, which was supported by
the City attorney. In newer developments, a Declaration of Restrictive Covenants is recorded on the
land, regardless of whether the City provided financial assistance.
Since December, Staff and AHC have been working with the leasing managers of the various buildings
to bring them into full compliance. With high levels of turn-over in the property management
industry, AHC must retrain new staff on the compliance requirements throughout the year.
Resources/Financial Impacts:
The City has a contract with Affordable Housing Connections. The fee for compliance review is
included the Redevelopment and Loan Agreements with the developers.
Relationship to City Policies:
Page 40 of 62
Confirming and verifying that the market-rate developments that include affordable units comply with
the New Multihousing Affordable Housing Policy is supported by said policy and the Comprehensive
Plan to create and support affordable housing.
Budget Pillar:
Strong Foundation
Reliable Service
Livable City
Better Together
Values Impact:
Equity
Providing affordable housing serves to make Edina more accessible to
households who work in Edina, for households who are living in
market rate housing and are housing cost burdened, and for
households who want to make Edina their home.
Stewardship
As the creation of affordable housing is one variable in determining
whether a development is approved either a zoning request and/or
financial assistance, it is incumbent upon the City to confirm and verify
that the affordable units are indeed affordable and leased to tenants
who qualify for affordable housing.
Supporting Documentation:
1. Staff Report
Page 41 of 62
March 27, 2025
Chair and Members of the Edina Housing and Redevelopment Authority
Stephanie Hawkinson, Affordable Housing Development Manager
2023 Affordable Housing Compliance Report - UPDATE
Information / Background:
On December 19, 2024 the HRA received a report regarding the compliance status of market rate
apartment buildings that include affordable units per the New Multi-Family Affordable Housing Policy. The
report pertained to calendar year 2023. At the time the report was drafted, out of seven market rate
apartments that include affordable units, two were in full compliance, three had some, and the remaining
two had multiple issues that made them noncompliant. As monitoring of the buildings is on-going, the
compliance status can change throughout the year as updates and corrections are made.
Of these seven properties, three have agreements that pre-date the New Multifamily Affordable Housing
Policy: Aria, Aurora and Millenium. These three buildings did not receive any financial assistance from the
City, rather the owners/developers agreed to include affordable units as a condition of their land use
approval.
Compliance Monitoring
The City engaged Affordable Housing Connections (“AHC”) to serve at the City’s compliance officer.
Compliance monitoring is to confirm and verify the following:
Year
Approved Development
#
Units
#
Affordable
TIF
Financed
Affordability
Period
2012 Aurora on France/6500 France 182 10 No 15-Years
2015 Aria*184 8 No 15-years
2015 Millennium/3250 66th Ave W 227 11 No 20-years
2017 Nolan Mains/Market Street 100 10 Yes 15-years
2017 Avidor/5220 Eden 165 18 No 15-years
2018 The Lorient/Orion 4500 France LLC 45 3 Yes 15-years
2021 Maison Green/4917 Eden Avenue 196 20 Yes 21-years
Page 42 of 62
STAFF REPORT Page 2
1. The approved number of units have rents that are deemed affordable per the agreement made with
the City (with rents at the 50% and/or 60% Area Median Income levels); and
2. The affordable units are being rented to households who are income qualified.
In calendar year 2024, five 2023 compliance reports and 47 tenant files were reviewed for compliance (Aria
will not share tenant files, and Aurora uses Elderly Waiver rental assistance so is monitored by the State).
AHC staff train property managers and leasing agents on how to determine household income and to
review the leases to determine the gross rent charged. To accurately determine income compliance there
are forms and worksheets that need to be completed to support eligibility at move-in and annually
thereafter. As income can come from multiple sources in addition to traditional wages, the forms and
worksheets are necessary. Resident rent ledgers are reviewed to determine rent compliance and determine
what bills and fees, if any, are charged to the tenants. Annually, property managers are to provide the
compliance officer with files for review. In reality, the compliance office meets with the property managers
throughout the year as often the managers and leasing agents of market rate developments are unaware of
the affordable housing requirements.
Frequent management turnover continues to present challenges in effectively applying and communicating
program requirements. Clear coordination between management staff and both prospective and current
tenants is critical for maintaining compliance. To support ongoing compliance efforts, developing an on-
demand training resource or a step-by-step guide for qualifying households may be a valuable tool for site
staff to reference as needed.
Status in December 2024:
Compliant Open Deficiencies Noncompliant
1. Aurora
2. Nolan Mains
1. Avidor
2. Millenium
3. The Lorient
1. Aria
2. Maison Green
Reasons for Non-Compliance:
The Avidor: Required income certifications were not completed. There was a management turnover, and
this requirement was not communicated with the new managers.
Millenium: Of the 11 affordable units, 8 of the files were in good condition. For the remaining three units
there were questions with the files: clarification on student status for one unit, and missing third party
income verification for the other two.
The Lorient: The tenant files lacked clarity on utility responsibility. The Utility Allowance Worksheet states
tenants are responsible for heating natural gas, cooking electricity, and other electricity. However, the
Addendum to the Apartment Lease Utilities Apportionment Agreement in the tenant files suggests tenants
may also be responsible for water, sewer, heat, waste removal, and a monthly administrative charge.
Clarification and/or corrections were needed to address these inconsistencies.
Page 43 of 62
STAFF REPORT Page 3
Maison Green: This was the first year the property was being reviewed. During the year there were
property management staffing changes with former staff not training replacement staff on compliance
requirements. Therefore, at the time of review there were multiple issues and need for clarification,
specifically:
•Utility responsibility. Some leases indicated owners paid utilities, other leases stated it was the
tenant responsibility. If the tenants paid the utilities, the rents needed to be adjusted accordingly.
•Additional fees: There was a lack of constancy and clarity on additional fees. If the fees are
required, the rents needed to be adjusted accordingly.
•Incomplete files: Files for two units were missing. Further, household questionnaires, and
employment verification were missing in others.
To get into compliance, the Maison Green’s owner or property management team needed to address the
following:
•Clarify utility responsibilities and the application of additional fees.
•Submit complete tenant files for all 20 affordable units, including all missing income verifications and
clarifications.
•Resolve discrepancies in income calculations and documentation.
•Review and correct any units that may exceed income and rent limits.
When a property has opened deficiencies or is noncompliant City staff and AHC work with property
management to get them to comply. We do not simply accept their noncompliance. For example, a
building may be noncompliant because rent, plus utilities, plus mandatory fees may exceed the gross rent
limit. Therefore, we direct management to reduce the rent which has resulted in lease amendments and
repayments to the tenants. In other cases, certain paperwork related to household income may be missing
at the time the files are reviewed. AHC informs management of the missing information, and management
works to submit. The building then becomes compliant.
Current Status (March 20, 2025)
Continuing since December, both the AHC compliance officer and City staff have been working with the
properties to remedy their deficiencies to bring them into compliance.
Compliant Open Deficiencies
1. Aurora
2. Nolan Mains
3. The Lorient
4. Millenium
1. Avidor
2. Maison Green
Avidor: Tenant files remain incomplete, lacking third-party income verification and/or source documents for
household incomes as required every three years throughout the project’s affordability period. AHC has
notified management of this deficiency. The Owner/Owner Agent is required to promptly provide
documentation supporting the correction of these deficiencies to ensure compliance. All required
Page 44 of 62
STAFF REPORT Page 4
documentation must be submitted no later than April 21, 2025. This year Avidor experienced property
management turn-over which has contributed to these delinquencies.
Maison Green: Although the files have improved significantly, there still remains a lack of clarity on income
as discrepancies remain between household questionnaires and source documentation, which need to be
corrected. Further, some leases also still show additional fees that are not allowed to be placed on the
affordable units per the Guide. Management has been cooperative throughout the process and has made
significant improvements in documenting household eligibility. On March 20, 2025, AHC issued the Initial
Compliance Review letter and Tenant File Review forms, summarizing findings for all 20 reviewed files.
Management has until April 5, 2025, to address or correct any identified non-compliance issues.
Current Recourse for Noncompliance
With the early developments (Avidor, Aria, Millenium and Aurora) there were little written expectations of
how the properties would deliver the affordable units and how the City would confirm that the affordable
units were serving tenants who needed them. Negotiations were made in good faith, yet these initial
buildings were approved prior to the development of the Affordable Housing Policy Guide (“Guide”) which
defines program requirements and how they are achieved. Each development also has a unique regulatory
agreement, making compliance monitoring a challenge. For Aurora, the requirement to provide affordable
units was only stated in the Resolution approving final rezoning: “Affordable housing units shall be 10% (10
units) of the assisted and independent units.” There is no definition for either rent or income. With each
successive development, the requirements have become increasingly defined in the Development
Agreements with the Guide included as an attachment. Yet even without the Guide in place at the time of
approval, the owners/agents of Millenium, Avidor and Aurora have worked diligently to comply with the
affordability requirements now in place. When the Millenium changed ownership, the new owners agreed
to a more robust agreement to secure these units and have worked cooperatively with AHC and Edina staff.
The City cannot fine or otherwise punish owners who are adhering to the executed agreements. Nor does
the City have the authority to fine properties that are not in full compliance where the requirement to
include affordable units is embodied in the Site Improvement Performance Agreement (SIPA). A fine, or
“Liquidated damages” need to be closely tied to the actual financial harm imposed, which would be
challenging to prove for developments that did not receive financial support from the City. The only
recourse currently in place is withholding TIF payments, to the owners who received TIF, until their
properties comply. Therefore, staff and AHC continue to work with all the properties to get them to
comply for the benefit of the renters who need the affordable units.
The HRA may want to consider having rental licenses tied to compliance for future developments.
*Aria
The owners of Aria, the Doran Companies, are steadfast in maintaining their compliance per the agreement
that was executed at the time of approval. In 2022 the owners communicated with the HRA that they are
technically adhering to the written agreement that was put in place when the development was approved,
but not with the intent as was clarified by the HRA on December 12, 2020. At that time the
Page 45 of 62
STAFF REPORT Page 5
Commissioners endorsed the definition of “rent” to mean the full cost for living in a unit – rent plus utilities
plus any other required fees. The City acknowledges Doran Companies willingness to provide affordable
units, and Aria is rent compliant, but the development is not technically affordable as tenants must pay
utilities, trash collection and other fees in addition to rent. Doran is complying with the written agreement,
but not with the intended spirit of the agreement. As intent cannot be confirmed nor verified, Doran
Companies is complying with the form of agreement that was in place at the time. Nonetheless, Aria has
been removed from the on-line map of affordable places to live and will not be included in this annual report
moving forward.
Page 46 of 62
d
ITEM REPORT
Date: March 27, 2025 Item Activity: Information
Meeting: Housing & Redevelopment Authority
Agenda Number: 8.1
Prepared By: Bill Neuendorf, Economic Dev Mgr
Item Type: Other Department: Community Development
Item Title: SPARC Loan with Edina Chamber of Commerce - Status Update
Action Requested:
No action required; for informational purposes only.
Information/Background:
On February 17, 2025, the Chamber of Commerce and the BIG Innovation Lab announced their
decision to close the operations of the BIG Innovation Lab. This announcement was contained in the
Chamber's e-newsletter sent to members. The Chamber submitted a letter to the HRA to confirm
their intention to repay the loan issued by the HRA for the construction of the office space at 7201
Metro Blvd. This letter is intended as a follow up from the discussions at the December 19, 2024 and
February 27, 2025 HRA Board meetings.
City staff has met with representatives from the Chamber of Commerce on several occasions in the
last few months to prepare an Amendment to the original payment terms. The Amendment will be
presented to the HRA Board for consideration at the April 10, 2025 meeting.
Resources/Financial Impacts:
NA
Relationship to City Policies:
NA
Supporting Documentation:
1. SPARC Loan - update letter from Chamber 3-3-2025
Page 47 of 62
Page 48 of 62
Page 49 of 62
d
ITEM REPORT
Date: March 27, 2025 Item Activity: Information
Meeting: Housing & Redevelopment Authority
Agenda Number: 8.2
Prepared By: Bill Neuendorf, Economic Dev Mgr
Item Type: Other Department: Community Development
Item Title: Preparation for Future Discussion about Tax Increment Financing
Action Requested:
No action required; for information purposes only.
Information/Background:
Staff is preparing the agenda for the April 24, 2024 HRA meeting which is intended to be a work
session to discuss Edina's use of Tax Increment Financing. Edina has used TIF as a strategic financing
tool to deliver benefits to the general public since the early 1970s. TIF was essential to build public
parking at 50th & France, the mixed-use destinations at Centennial Lakes, Edinborough Park,
Grandview, Pentagon Village and several other sites in the community.
The use of TIF is guided by Minnesota Statutes and Edina's TIF Policy. The Policy was completely
rewritten in 2022 to be more transparent, effective and results-oriented. The TIF Policy was also
coordinated to address the requirements in Edina's Comprehensive Plan, Affordable Housing Policy
and Sustainable Buildings Policy. The TIF Policy is attached for reference.
Over the past year, members of the HRA Board have asked several questions regarding the policy
and procedures applied when Edina considers Tax Increment Financing.
The discussion topics are anticipated to include:
1. Is City policy driving the need to use TIF more frequently?
2. Is there a preferred order and timing to consider TIF?
3. Should TIF be used only for specific types of costs?
4. Should the strategy of using TIF be modified to be programmatic rather than
project/outcome-based?
There may be additional discussion topics. Please notify Bill Neuendorf or Scott Neal if additional
aspects of Edina's TIF Policy should be discussed.
Resources/Financial Impacts:
NA
Relationship to City Policies:
Tax Increment Financing Policy, Affordable Housing Policy, Sustainable Buildings Policy, Capital
Improvement Plan, Comprehensive Plan
Supporting Documentation:
Page 50 of 62
1. Edina TIF Policy - approved 12-20-2022
Page 51 of 62
☒City Council Approved: 2011
☐City-Wide Revised: 12/20/2022
☐Department
City of Edina Policy
Tax Increment Financing Policy
BACKGROUND
The City of Edina has statutory authority to use Tax Increment Financing (TIF) pursuant to Minnesota State
Statutes Section 469.174-469.1799 (the TIF Act). TIF uses the increased property taxes generated by new real
estate development within defined geographic districts to pay for certain costs associated with new development
(including but not limited to affordable housing) as well as related public infrastructure and public realm spaces.
The City’s mission is “…to provide effective and valued public services, maintain a sound public infrastructure,
offer premier public facilities and guide the development and redevelopment of lands, all in a manner that sustains
and improves the health and uncommonly high quality of life enjoyed by our residents and businesses.” (Source:
2015 Vision Edina).
The land within the City boundaries has been substantially built-out for more than a decade and many of the older
properties are in the “redevelopment” phase. In order to construct a new structure, an older structure that is
unsound, outdated, or obsolete must typically be removed.
In most cases, development projects in Edina are privately funded using traditional debt and equity sources. From
time-to-time, however, the City has found it necessary to provide financial support for development projects that
deliver outstanding benefits to the community and that could not be accomplished without public financial
involvement.
As early as the 1970s, the City used TIF to help deliver desired commercial and multifamily development served
by public infrastructure elements including roads, sidewalks, utilities, public parking, and public realm spaces like
parks and plazas. TIF was essential to construct the commercial, residential and public elements at Edinborough
Park and Centennial Lakes Park (including affordable housing). TIF was also essential to fund public parking at 50th
and France and to transform the Grandview District from an industrial area to a mixture of residential,
commercial and civic uses with public parking. Historically, Edina has taken a more restrictive view on the use of
TIF than allowed by Minnesota Statute.
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PURPOSE OF POLICY
While most redevelopment projects in Edina are privately financed, on certain occasions, the City may
find it necessary to provide financial support in order to overcome unusual hurdles and to achieve
extraordinary benefits to the general public. The purpose of this policy is to:
• Limit the use of TIF to only projects that deliver permanent benefits to the general public that are better than
the minimum established in City Code
• Clarify that the use of TIF in Edina will be more limited than allowed by Minnesota Statute
• Establish criteria and guidelines for where new TIF Districts are established and how incremental taxes are
utilized in Edina.
• Ensure that TIF is used in a transparent, consistent and equitable manner to provide value to the community.
• Ensure that TIF is used to deliver both short-term and long-term improvements that are a benefit to the
general public in Edina.
This policy provides guidance to developers, property owners, staff, and the community at large regarding Edina’s
use of Tax Increment Financing as a public finance tool to attract and support high quality development that
contributes to a strong property tax base and to the high quality of life in Edina. For the purpose of this policy, the
“City” shall also mean the Edina Housing and Redevelopment Authority (HRA), which assists in a variety of
housing, redevelopment, and economic development activities for the City of Edina.
PUBLIC BENEFITS PURSUED WITH TIF
In addition to the Minnesota TIF Statutes, Edina applies an additional expectation that the use of TIF will deliver
permanent benefits to the general public other than tax base growth. Edina’s Comprehensive Plan establishes
guidance for the anticipated changes in land use and related systems for the next decade. Most land use changes
are anticipated to occur in commercial and industrial areas. Many of the preferred outcomes identified in the
Comprehensive Plan include changes to transform single use sites to mixed uses that provide a strong tax base,
improved connectivity and access for drivers, bicyclists and pedestrians. When necessary, TIF can be used to
achieve many benefits to the community, including:
• Transformational change of properties in a manner compatible with Comprehensive Plan, Small Area
Plans, Development Framework, Sustainability Policy, New Multifamily Affordable Housing Policy and
other Guidelines adopted by the City
• Improvements to the multi-modal transportation network, including roads and infrastructure for motor
vehicles, pedestrians, bicyclists and transit
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• Public realm improvements, including green space and placemaking elements including landscaping,
streetscaping and public art
• Public parking facilities that provide shared parking resources for more than one property
• Improvements to public utility networks; including potable water, fire protection, storm sewer and
sanitary sewer
• Stormwater retention and detention systems that benefit more than one property
• Removal of substandard buildings (as defined in MN Statute) that may have a blighting effect on the
community
• Preservation of buildings that are historically or culturally significant to the community
• Remediation of environmental contamination
• Creation and retention of long-term affordable housing at a variety of below-market price points
• Creation and retention of permanent employment opportunities
I. PROCEDURAL CONSIDERATION OF TIF
1) Authority rests with City Council. Consideration to establish a new TIF District shall be at the sole
discretion of the City Council. Administration and determine of specific uses of incremental property
taxes generated therein shall be at the discretion of the City Council or HRA. Since each development
project is unique, the use of TIF shall be considered on a case-by-case basis.
2) Preparation of TIF documents. The Edina Housing and Redevelopment Authority shall provide initial
direction regarding the potential use of TIF, shall review the Term Sheet that identifies the proposed use
of TIF on each project and shall review and approve the contractual documents such as TIF Agreements.
3) Eligible Applicants. Only current property owners or developers that have site control are eligible to apply
for TIF. Evidence of site control shall be provided in the TIF Application.
4) Negotiation of TIF terms. After the TIF Application is submitted, the developer shall negotiate financing
terms only with the City Manager, HRA Executive Director or designee. The prepared terms and
proposed contract shall then be presented to the HRA Board and the City Council as a whole.
5) Application Form. Developers that request TIF shall submit a completed application in a form approved by
the City Manager or HRA Executive Director. The application shall identify the anticipated financing
sources, including equity, type of debt, external grants/contributions, and the amount and type of TIF
support requested to resolve the financing gap. A complete development sources and uses pro forma shall
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be submitted, as well as an operating pro forma based on a stabilized project. The application shall include
calculations that identify the financing gap. This information is required to determine the “but for” test
required under the TIF Act. The application shall also identify extra-ordinary costs to develop the project
in Edina and shall also identify the exceptional public benefits that could be delivered if the project is
completed. The Application shall also address other criteria identified in this document.
6) Application Fee. The application fee shall be $10,000. Fifty percent (50%) of the fee shall accompany the
initial application. The remaining fifty percent (50%) shall be due after the confirmation of a Term Sheet
and prior to the preparation of full contractual documents. Application fees are non-refundable.
7) Use of Third-party Expert Advisors. Expert advisors shall be engaged by the HRA as necessary to ensure
compliance with the TIF Act and to provide expertise to supplement the abilities and capacity of staff.
Typical advisors have expertise in TIF law, public sector development finance, general development
finance, property inspection as it pertains to TIF, and real estate valuation, among other redevelopment
topics. All advisors shall be contracted to the HRA and shall uphold the interests of the HRA and the City
while providing service.
8) Developer Responsible for Fees. The developer shall be solely responsible for the payment of third
expenses pertaining to the developer’s request for TIF support from the time of the request to the
delivery of the Certificate of Completion. Prior to preparation of the Term Sheet, the applicant shall
submit to the City a deposit equal to the total estimated costs for legal and consultant fees. These funds
will be held in a non-interest-bearing escrow and the City will draw upon these funds to pay all related
expenses. Additional funds may be necessary if the scope of the work changes beyond the initial
expectation. Any unused balance shall be returned to the developer upon completion of the process. The
developer shall also be solely responsible for any costs related to requested amendments to the TIF
District or TIF Agreements.
9) Initial Staff Response and Notification of HRA Board. City staff shall review and evaluate the Application
for compliance with the City’s policies. Soon after receipt of a TIF Application, staff should advise the
Edina HRA about the TIF request including the potential public benefits delivered if TIF would be
provided. Staff will then seek approval to engage third party advisors to fully vet the merits of the TIF
request.
10) Preparation of Term Sheet. Staff shall prepare a Term Sheet that summarizes the key terms by which TIF
could be used for the project. The Term Sheet shall be submitted to the Edina HRA for review and
consideration. The Term Sheet should generally be considered simultaneously or soon after preliminary
zoning approval is obtained. The HRA should provide verbal indication whether they are agreeable to
preparation of binding contracts (commonly known as TIF Agreements) based on the Term Sheet.
11) Creation of TIF District. After consideration of the Term Sheet, staff shall begin the process of establishing
a TIF District to achieve the goals outlined in the Term Sheet.
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12) TIF Agreement. Staff shall work with legal and financial advisors to prepare complete and binding legal
agreements based on the Term Sheet. The TIF Agreement should be considered by the HRA Board
and/or the City Council after final zoning approval is obtained.
13) Building and Zoning Approvals. The provision of TIF is contingent upon receiving all other necessary
project approvals from the City.
II. FINANCIAL REPORTING AND TRANSPARENCY
1) Mandatory Reporting. The City shall submit all required reports on the use of Tax Increment Financing to
Hennepin County and the Minnesota Office of the State Auditor using the format provided by those agencies.
2) Year in Review Report. Each year, staff shall publish a report that summarizes the use of TIF written in plain
English style. This report shall include the following information for each active TIF District: start and end
dates, debt and contractual obligations, tax collection status, tax base status, and other pertinent information.
This report shall also quantify outcomes when TIF is used to achieve public benefits. This report should be
delivered to the Edina HRA in January and shall be made available to the applicable School District(s) and to
the general public upon request.
3) Website. The City shall post general information on the use of TIF in Edina on the City website.
III. ESTABLISHMENT OF TIF DISTRICTS
1) Preparation of TIF Plan. The HRA’s Financial Advisor shall prepare the TIF Plan to satisfy the requirements of
Minnesota TIF Statutes. The TIF Plan should be written in plain English style. The TIF Plan should describe the
intended redevelopment and/or housing outcomes and should identify how the use of TIF will help achieve
community goals as defined in the Comprehensive Plan and related plans.
2) Type of District. The type of District established shall be determined by the City Council in accordance with
the limitations contained in Minnesota Statute.
3) Boundaries and Term. The boundaries of each new district should be as small as necessary to achieve the
development goals of the subject properties and adjacent public areas. When establishing a new TIF District,
the shortest statutory term to achieve the desired outcomes should be considered. A longer term should be
considered when pooling is desired.
4) Impact on Municipal Services. The impact of the proposed project on the City’s delivery of services, capital
expenditures and operating expenditures shall be taken into consideration prior to the adoption of a TIF Plan.
5) Fiscal Disparities. Projects utilizing TIF are responsible for paying their share of the Fiscal Disparities
contribution from the property taxes generated from the project and within the boundaries of the District.
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6) Community engagement. The City shall follow standard protocol and processes for collecting community
input on every proposed TIF district. At a minimum, this typically includes advance notice, online engagement
and in person public meetings.
7) Input from School District and County. A draft of the TIF plan shall be provided to Hennepin County and to
the school district where the district is located for review and comment prior to the public hearing.
8) Establishment of District. Unless unique circumstances apply, establishment of a TIF District should coincide
with the execution of one or more TIF Agreements capable of satisfying the outcomes identified in the TIF
Plan.
9) Early De-certification. Within one year after the 5-year statutory deadline, the City should consider early
decertification of the District if no debts or contractual obligations for the incremental taxes remain. Within
one year after all debts and obligations have been satisfied, the City should consider whether to de-certify the
District early. Consideration should be given to the potential benefits from pooling available funds before the
District is de-certified.
IV. EXPECTATIONS FOR TIF SUPPORTED REDEVELOPMENT PROJECTS
1) Site Plan. The site plan for any project supported with TIF shall be designed to substantially follow the
regulations and guidelines as adopted in Edina’s Comprehensive Plan, Small Area Plans, Development
Framework and Southdale Design Experience Guidelines (where applicable). The expected quality and nature
of site plan improvements is highest when TIF is contributed. Projects supported with TIF shall fully satisfy
each of the following aspects as described in adopted plans and guidelines and as approved through the City’s
typical zoning review / site plan review process:
a. Subdivision of superblocks to establish a transportation grid with walkable, human-scale blocks
appropriate for the size, length and width of the property
b. Creation of new streets, sidewalks and trails to allow through traffic by the general public (recognizing
that redevelopment of neighboring parcels may be necessary to complete the through route)
c. Creation of new public realm spaces including streetscaping, lighting and public art
d. Minimum building setbacks (such as 30 ft and 50 ft in the Greater Southdale District) should be
considered “build to” lines
e. Applicable street room typologies implemented
f. Massing, recessed upper floors, building articulation, and fenestration provided
g. Perimeter spaces that front a public street or similar route with public easement shall be occupiable and
activated. Storage, parking, and utility spaces shall be kept to the bare minimum along public routes
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The provisions of this policy are not intended to require an additional site plan review process. The City
Council shall make the final determination of whether the site plans adequately abide by the Comprehensive
Plan and other adopted codes, plans and guidelines to warrant the use of TIF.
2) Exterior Finish Materials. The types of finish materials on portions of the building directly visible from a street
or other public realm space shall comply with Edina’s City Code. For TIF supported projects, a high degree of
stone, brick and other natural materials is preferred.
3) Public Realm Experience. A vibrant and welcoming public realm experience is essential for every project
supported with TIF. Examples of contributing elements include (but are not limited to): sidewalks wider than
required by City Code, public plaza, public seating areas, integrated transit shelters, landscaping, hardscaping,
commercial storefronts and residential walk-up units that directly engage the public realm areas. Under the TIF
Act, reimbursement through TIF for public realm amenities will need to be reviewed on a case-by-case basis,
but will be required even if not subject to TIF reimbursement.
4) Public Art. Projects supported with TIF shall incorporate permanent public art as an integral part of the public
realm experience. Each public art installation shall be secured with an easement that provides for the
maintenance and permanence of the art element by the owner. The public art elements shall be consistent with
those contained in the approved site plans. Additional art elements may be required when TIF is contributed.
Examples of additional art elements include but are not limited to: sculptures, murals, sidewalk poetry, water
features, light and sound displays, and rotating art installations. City Council shall make the final determination of
whether the quantity and type of public art elements warrant the use of TIF. Under the TIF Act, reimbursement
through TIF for public art will need to be reviewed on a case-by-case basis, but public art will be required even if
not subject to TIF reimbursement.
Members from the Edina community shall be engaged as part of the artist-selection process and/or the art-
selection process. The developer shall make the final art selection keeping in mind the recommendation and
input from the community members.
5) Public dedication or public easements. All public benefits in TIF supported projects shall either be owned by the
City or HRA, dedicated to the City or be secured with permanent easements (to the City) or restrictive
covenants to ensure that the public has long-term access to and long-lasting benefits from the improvements.
6) Affordable Housing Units. Multi-family development projects supported with TIF should incorporate any
required affordable units into the site, as opposed to providing the prescribed contribution to Edina’s
Affordable Housing Trust Fund.
7) Public Parking. Only those parking stalls that are available to the general public throughout all times of the day
and year shall be considered to be supported with TIF. Parking stalls that are dedicated for the exclusive use by
residents or tenants will not be eligible for TIF support. The public parking stalls shall be easily identified as
public parking with exterior signage near the entrance and wayfinding signage on the site.
8) Environmental Sustainability. Edina’s Sustainable Buildings Policy shall apply to all projects supported with TIF.
For TIF-supported projects, the applicable Sustainable Building Rating System shall be LEED Silver or better.
Additionally, electrification of heating systems and/or on-site renewable energy generation are preferred in TIF-
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supported projects; projects should achieve at least 2 total LEED points between Grid Harmonization and
Renewable Energy credits. Certification of the completed building(s) shall be required and compliance shall be
renewed (by the owner) throughout at least the term of the TIF District at the frequency identified by the
certifying agency.
9) Collaborative Partnerships. The developer should engage local neighborhood groups and other community and
regional organizations to provide the highest reasonable level of collaboration to ensure a successful project.
Community partners could include business and trade associations, private and non-profit groups and
associations, governmental agencies and similar stakeholders and benefactors. Evidence of effective engagement
should be provided in the TIF Application. This collaborative approach is also helpful to secure grants from
other agencies.
10) Mitigation of Construction Disruption. As part of the Go-Ahead letter by which the developer commits to
proceed with the project and prior to the site preparation and construction, a Construction Mitigation Plan
(CMP) shall be submitted to the City that identifies the developer’s and general contractor’s strategies to
address the inconveniences that occur to the neighbors and general public during the construction period.
Topics to be addressed in CMP include: milestones and methods to provide advance notice to neighbors; off-
street parking for contractors and suppliers; delivery routes for construction vehicles; queuing locations for
large vehicles serving the construction site; temporary street, lane or sidewalk closures; temporary detours for
vehicles, pedestrians, bicycles and transit vehicles; construction site security; and strategies to mitigate dust,
vibrations and noise. The CMP must also identify the responsible person to be contacted by neighbors when
questions or problems occur. Phone number and email address of the responsible job site person shall be made
available.
11) Fair Labor standards. The developer and general contractor shall certify that all applicable state and federal
labor laws have been satisfied and shall allow third party inspections or other means of confirming compliance.
Failure to comply with applicable state and federal labor laws shall be considered a default with appropriate
penalties.
12) Actions to Promote Diversity and Equity in Redevelopment. The development and construction of projects
with TIF support shall include best efforts by the developer and general contractor to provide employment
opportunities for people that are under-represented in the construction field, including women and people of
color. Similar efforts shall be made to structure contracts so that businesses owned by people under-
represented in the construction industry (including majority women-owned, majority minority owned, certified
MBE, WBE and VBE) have a fair and realistic opportunity to provide goods and services to the project.
The developer’s plan and strategy to achieve these goals (commonly referred to as Equity and Inclusion
Outreach Plan or EIOP) shall be included in the TIF Agreement. The plan shall identify employment and
contracting goals for women and people of color. The plan must also include an intentional strategy to pursue
and achieve these goals to the greatest extent practical. The plan shall also include the developer’s and general
contractor’s practices to pursue equity, including how they participate in workforce development programs and
similar activities in the Twin Cities.
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Standards and recommendations from State of Minnesota Department of Human Rights, Hennepin County and
similar local and regional agencies and trade associations shall be considered as guidance when identifying these
goals and strategies.
As a condition of the Certificate of Completion, the developer shall report on the implementation of the plan
as well as the outcomes. Penalties shall apply when the developer fails to make a good faith effort to implement
this plan.
V. USE OF TIF IN EDINA
1) TIF to deliver public benefits. TIF will only be used to enable a developer to complete a project that delivers
exceptional public benefits. An increase in property tax base alone is not sufficient to warrant the use of TIF.
TIF shall also be used as a means to finance public infrastructure improvements carried out by the City.
2) “But for” Test. Any use of TIF shall be subject to the “but for” test as prescribed in Minnesota Statute; meaning
that “but for” the use of TIF, a project of the size, scale and quality proposed would not occur. The public
benefits delivered by the project would also not occur on the site without the use of TIF.
3) Final Site Plan Approvals. Requests for TIF support after preliminary zoning has been granted may result in
changes to the preliminary site plan to comply with this TIF policy. Any delays or costs due to a re-review are
the sole responsibility of the developer.
4) Financial Gap. TIF should only be considered to fill a financial gap that is unable to be satisfied by traditional
equity and debt sources. TIF assistance will not be provided to projects that have the financial feasibility to
proceed without the use of TIF. TIF will not be provided solely to provide an excessive contingency to the
project or broaden a developer’s profit margins on a project.
5) Developer’s Capital Stack. TIF should be considered the last money into the deal for market-rate projects
provided with TIF support. This includes multi-family housing where 20% or fewer of the units are affordably
priced in accordance with Edina’s multifamily affordable housing policy.
6) Pay as You Go TIF Notes. TIF should only be provided to developers of market-rate projects on a pay-as-you-
go basis. In certain cases, up-front or other forms of assistance may be considered by the City but will be at the
sole discretion of the City Council or HRA. Bonding or any other appropriate means of financing, supported
with TIF revenue should be used by the City to carry out public infrastructure improvements within the TIF
District.
7) Interest Rate. The interest paid on TIF Notes shall be consistent with the typical interest rate paid in the
marketplace for the type of project. The interest rate paid on the TIF Note should not exceed the interest rate
underwritten for the permanent financing.
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8) Deviations from Policy. The City reserves the right to approve or reject the use of TIF, the amount of TIF, and
the total term, on a case by case basis, taking into consideration established policies, project criteria, and
demand on services in relation to the potential benefits from the project. Deviations from this policy shall be
allowed if specifically approved by the City Council or HRA.
9) Impact on City Services. TIF will not be used to support development projects that place excessive demands on
municipal services or other capital or operating expenditures of the City.
10) Financial Analysis. The applicant shall provide to the City and its financial advisor all information necessary to
conduct a financial analysis of the proposed project. This information must be complete and accurate.
Falsification or manipulation of the financial information shall be terms for immediate disqualification of
consideration.
11) Financial Returns to Developer. The financial returns to the developer shall be within the typical industry
norms for the type and scale of the project. The use of TIF shall be limited to increasing the returns to the
lower level of the normal range.
12) Projections of Incremental Taxes. The Financial Advisor shall use realistic projections for the value of
incremental taxes generated over time. The amount of TIF pledged shall not exceed the amount projected to
be generated from the completed project.
13) Access to Complete Site and Project Information. Prior to approval of the Term Sheet, the developer shall
provide any surveys, required market and financial feasibility studies, appraisals, environmental studies, soil
boring information for the project, and other information or data that the City or its legal and financial
consultants may require in order to proceed with an independent underwriting. Such information is subject to
the Minnesota Government Data Practices Act and may be public information at the time of submission.
Proprietary information will be kept non-public to the extent allowed by Minnesota statute.
14) Financial Guarantees. In the event that a type of TIF support other than Pay-as-you-go Note is used, the
developer shall provide adequate financial guarantees to ensure completion of the project and the repayment of
the tax increment financing in the event that the project fails to be completed. Types off guarantees may include,
but are not limited to, assessment agreements, insurance, letters of credit, etc.
15) Developer experience and capacity. Any developer requesting TIF shall demonstrate past success in real estate
development as well as specific capability in the type and scale of development proposed. As part of the TIF
Application, the developer shall submit a list of critical members of the development team that identifies
professional qualifications and references.
16) Inflated Fees not acceptable. The developer fees, soft costs and operating expenses included in the pro forma
must be reasonable and typical for the industry. Inflated fees, unreasonable expense categories and excessive
contingencies will not be accepted.
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17) Look back. The TIF agreement will include “look back” provisions to ensure that the TIF was actually needed
and shall include early termination of TIF Note payments and/or “claw back” provisions if it is determined that
TIF was not needed at the level identified in the TIF Agreement. The clawback provision may be waived for tax-
credit and similar affordable housing developments.
18) Real Estate Transactions. TIF shall not be used when land acquisition costs exceed market land costs.
Acquisition costs shall be scrutinized to ensure that the purchase price is fair and reasonable in relation to
recent comparable transactions. If deemed necessary by the City, a current real estate appraisal prepared by an
independent appraiser selected by the City shall be provided to validate the fair market value of the land in as-is
condition. A high purchase price alone is not sufficient to warrant the use of TIF.
19) New and Retained Job Opportunities. When jobs are created or retained, preference should be given to jobs
that are not currently located within the City. TIF will not be used for projects that would give a significant
financial advantage over similar businesses located in the City.
20) Maximum TIF contribution. The principal amount of TIF shall be justified by the “but for” evaluation and shall
not exceed the value of exceptional public benefits delivered by the completed market rate project.
21) Delivery of TIF Note(s). TIF Notes shall only be delivered to the developer (and be interest-bearing and
payable) after the completion of the full project, delivery of the public easements, issuance of Certificate of
Occupancy, certification of final costs, documentation of final equity and inclusion outcomes and other key
parameters identified in the TIF Redevelopment Agreement. A Certificate of Completion shall be issued by the
City/HRA to confirm completion of all TIF related requirements.
22) Park Dedication Fees. When TIF is used to support development of new outdoor publicly available spaces such
as public plaza, public courtyard or similar public space, the value of such spaces shall not be deducted from any
Park Dedication Fees due from the market-rate redevelopment project.
23) Grant Funding. Grant funding from other agencies shall be pursued when TIF is used for a development project.
The amount of TIF provided may be reduced depending on the amount of grant funding received. The total
grant funding received shall be included in the pro formas when the “look back” is calculated.
24) Business Subsidy Laws. The City will require compliance with the State of Minnesota Business Subsidy Laws in
Minnesota Statutes, Section 116J.993 through 116J.997, unless the project meets one of the business subsidy
exceptions.
25) Pooling. When pooled TIF funds are available from a different TIF District, their use should be prioritized to
provide affordable housing in a greater amount, longer term, or lower target income than what is usually
achieved using other City policies. Other uses of pooled funds shall be at the direction of the City Council or
HRA.
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