72nd & France #3 TIF District

The TIF Financing Plan was given final approvals by the Edina HRA on 11/14/2024 and City Council on 11/19/2024. The final version of the TIF Plan is included on this page. The first year of TIF revenue collection will be 2028.

The City is considering the creation of a new Tax Increment Financing (TIF) District to support transformational redevelopment of commercial property located at 7235 France Avenue. The site is currently occupied by Macy's Furniture Gallery and is under contract to be sold to Enclave Company.

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 the private investment that can deliver public benefits from this site.

The proposed TIF Plan and brief Staff Memo are posted on this page. A complete Staff Report and Presentation will be issued prior to the Public Hearing.

About TIF - Tax Increment Financing is a public financing mechanism that has been used in Minnesota for nearly 50 years. TIF is used by many cities and counties in Minnesota. In the past, TIF was used to help finance transformational improvements at 50th & France, Edinborough, Centennial Lakes and Grandview (among others).

When a TIF District is created, a financial tool is enabled so that public benefits can be delivered within the District. “Incremental” or “new” property taxes collected within the TIF District can be spent on any qualified use identified in the TIF Plan. The “baseline” property taxes continue to be distributed to the City, County, Schools and other taxing agencies.

Edina's use of TIF is guided by an updated TIF policy. More information about TIF in Edina can be found HERE.

Site Background of Proposed TIF District - For decades, the property at 7235 France Ave was part of the Hedberg Sand and Gravel mining operations. In the mid-1970s, the Dayton Corporation purchased the site and constructed a furniture gallery with generous surface parking for customers that opened in 1978. Over the years, the commercial building has deteriorated. While the structure is still safe for occupancy, the age and condition of the building is deemed to be "substandard" aka "blighted" per the criteria in Minnesota Statute.

Overview of TIF Plan - Following the requirements of Minnesota Statute, a proposed TIF Plan has been drafted by the City's financial advisors at Ehlers Associates. This document addresses how the TIF public financing mechanism could be used on the site to attract private investment and to achieve community goals. The TIF Plan includes the following elements:

• location of District
• Start date, end date and term of District
• Confirmation of "but for" test
• Confirmation that District does not negatively impact City or other Taxing Districts
• Property tax revenue estimated to be collected within the District
• Budget to generally illustrate how monies from the District will be spent
• Conditions report that qualify the site as a TIF District
• General description of projects that will be delivered using revenue from the TIF District

Overview of Tax Growth and TIF Budget - The TIF Plan projects that the tax valuation of the District will increase 20x after the project is completed. This is based on completion of a mixed use project with new residential, new office and new retail. Completion of this project will increase the property taxes generated within the District by 10x.

The current tax valuation of the property is expected to increase from $12.1 million to $244.43 million if TIF is used and the project is completed. This results in an increase in annual property taxes generated from the site from $348,609 in 2024 to $3,640,000 in 2029. The conversion from commercial to mixed-uses with residential and commercial also shifts the property tax distribution to benefit the City, Schools and County. Without the use of TIF and without completion of the proposed project, the tax valuation and corresponding property taxes are anticipated to remain relatively flat with minor adjustments for depreciation, inflation and changes in applicable tax levies.

Incremental property taxes generated within the District are anticipated to be spent in each of the categories authorized by Minnesota Statute. The maximum amount of potential spending from this TIF District over 25 years is budgeted to be nearly $81 million. This includes $41.4 million for future project costs and $39.5 million for future interest payments. Note that this TIF Plan only sets the budget limitations. Any spending from this TIF District requires a separate action by the City Council and/ or HRA Board.

Future Process to Implement TIF Plan - Establishing the TIF District is the first of many regulatory and procedural steps. If the TIF District is created, the City Council (and/or Edina Housing and Redevelopment Authority) will consider other actions separately. Each of these steps will occur at a public meeting. These additional steps include:

• entering into TIF Agreement(s) with private developers
• including new public infrastructure projects in the Capital Improvement Plan
• awarding contracts for public infrastructure projects to engineers and other design firms
• awarding construction contracts to fund public infrastructure projects

The proposed TIF Plan would create a funding mechanism that would potentially allow funding support for the proposed private development, potential public improvements as well as the City's administrative costs in managing the work.