72nd & France 2 TIF District

On April 18, 2023 the City Council approved the creation of a new Tax Increment Financing (TIF) District for the vacant 5.2 acre site at 7200-7250 France Avenue. This replaced the old TIF District that was de-certified. The approved TIF Plan calls for collection of incremental property taxes upon the completion of two new buildings beginning in 2026 and concluding in 2051.

The initial site work – including removal of the two outdated commercial buildings has been completed. Due to the current economic conditions and stagnation in the capital markets, the construction of the mixed-use project is anticipated to be delayed 1 - 2 years.

In Spring 2024, the State Legislators have been asked to consider legislation that allows the City to modify the dates of TIF collection to reflect the construction delay. If State Legislation is passed, the City Council and Edina HRA will need to formally consider any changes to the TIF Plan at a future public meeting.

The City is considering the creation of a new Tax Increment Financing District to support redevelopment of two vacant commercial properties at 7200 and 7250 France Avenue. TIF is being considered to ensure that the redevelopment is designed and built in a manner consistent with the Greater Southdale Plan and other applicable policies and delivers benefits to the general public that would not otherwise be possible at this site.

A Public Hearing is being held as part of the process to inform the City Council as they consider whether or not to use Tax Increment Financing to achieve public benefits from this site.

A 2019 proposal to redevelop the site (with TIF support) was unable to secure private financing and will not move forward. The 2019 TIF District is proposed to be terminated and replaced with a new TIF District to enable the new project.

These properties were originally built 1968-1972 as two separate buildings. Over the years, the buildings have become obsolete in the marketplace and the 7250 building was deemed unsafe to be occupied. The buildings were heavily vandalized over the past few years. The buildings were inspected and found to be structurally substandard as defined by MN TIF Statute.

The new proposal reimagines the properties as a single site with intentional access routes for drivers, bicyclists and pedestrians. There are also several outdoor areas intended for use by the general public. The new project will be built in two phases.

The first phase will consist of a 5-story professional office building with more than 120,000 square feet of space with two levels of underground parking. A coffee/café is anticipated on the street level providing service to the building tenants and general public. This building will create and retain hundreds of professional jobs in Edina. All site work will also be completed as part of the first phase. Site work includes significant improvements to the public realm including a new north/south roadway, new north/south bicycle/pedestrian trail, new perimeter sidewalks, new public plaza, two new public seating areas adjacent to the landscaped stormwater basin, and public art. The first phase was granted zoning approvals by the City Council in February 2023.

The second phase is anticipated to be an upscale hotel with onsite restaurant and other amenities. Parking will be below-grade with a drop off/valet area on the street level. Alternatively, the second phase may be multi-family residential if the hotel is not financially viable. The size and massing of the second phase building will comply with the size and height limitations included in the approved site plan.

The construction of the project – including the many public realm and infrastructure improvements – will be financed by the developer using traditional equity and debt resources. All management and financial risk is borne by the developer.

The developer has prepared construction budgets for each phase, including the costs of the public amenities and utilities that deliver permanent benefit to the general public. After preparing a financial pro forma for the project, the developer has requested that the City use TIF to satisfy a gap in the financing. “But for” the use of TIF, the project will be unable to be constructed.

The creation of a TIF District creates the legal mechanism by which the City Council can pursue the delivery of public benefits at this site. “Incremental” or “new” property taxes collected within the boundaries of the TIF District can be spent by the City Council/HRA on any eligible and qualified use identified in the TIF Plan and Minnesota Statute. The “baseline” property taxes collected will continue to be distributed to Hennepin County, Edina Public Schools and City of Edina.