Public Hearing: 70th and France TIF District

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This proposal was approved 3-1 at City Council on March 22, 2022.


This public hearing requested the establishment of a new 15-year TIF District to support redevelopment of the 5.7 acre commercial site at 7001 France Avenue. The proposed development consists of new housing, new office space and new commercial space. The new buildings are proposed to be constructed along new roadways that follow the recommendations of the Southdale Design Experience Guidelines. The new site plan will deliver new public easements, new public plazas, and new public parking. The developer will incur all financial and construction risk.


TIF is proposed to be pledged to satisfy a gap in the financing. Upon successful completion of the project, TIF Notes are proposed to be issued to the developer. These Notes would be paid only from incremental property taxes collected from the site. The baseline property taxes would continue to be distributed to the County, School District and City.




This proposal was approved 3-1 at City Council on March 22, 2022.


This public hearing requested the establishment of a new 15-year TIF District to support redevelopment of the 5.7 acre commercial site at 7001 France Avenue. The proposed development consists of new housing, new office space and new commercial space. The new buildings are proposed to be constructed along new roadways that follow the recommendations of the Southdale Design Experience Guidelines. The new site plan will deliver new public easements, new public plazas, and new public parking. The developer will incur all financial and construction risk.


TIF is proposed to be pledged to satisfy a gap in the financing. Upon successful completion of the project, TIF Notes are proposed to be issued to the developer. These Notes would be paid only from incremental property taxes collected from the site. The baseline property taxes would continue to be distributed to the County, School District and City.




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    Can you define both ‘affordably’ and ‘moderately’ priced - either in terms of rent/month or home price? Is the developer at 70th/France going to be contributing to the Affordable Housing Trust Fund? If so, how much and under what terms? Also wondering exactly how the TIF works. Does the $22 million funded by the ‘city’ essentially mean Edina residents are picking up the tab for the developer or is that $22 paid back by the developer? My concerns stem from watching my own neighborhood - Chowen/Strachauer Park - move from what was once kind-of affordable to new construction that is not affordable. Like Ms. Rose, I’m worried that if Edina caters only to the high-end home owner, our community will lose out on attracting a vibrant community that will most likely be priced out of Edina if projects like the one at 70th/France receive such a large share of public funding. Thanks very much for your time.

    ViAnne Hubbell asked 7 months ago

    Can you define both ‘affordably’ and ‘moderately’ priced - either in terms of rent/month or home price? 

    The rental rate for “affordable housing” is generally measured as percentage of the Area Median Income (AMI). The AMI is determined by U.S. Department of Housing and Urban Development (HUD) and groups all communities in the Twin Cities metro together. Most new “affordable” apartments in Edina are priced for households earning 50% AMI or 60% AMI. In 2020, for example, the AMI for a household of 3 people is $94,700. A similar household earning $56,700 annually would be considered 60% AMI. The ‘affordable’ rent for that 60% AMI household would be $1,417 for a 2-bedroom apartment. The household income and monthly rental rates are adjusted annually. Additional information is found here: https://www.edinamn.gov/Faq.aspx?QID=865

     

    Is the developer at 70th/France going to be contributing to the Affordable Housing Trust Fund? If so, how much and under what terms?

    Most new multi-family projects in Edina are required to include affordably-priced units in the project or make a contribution to Edina’s Affordable Housing Trust Fund. For the 70th & France mixed-use project, the developer chose to contribute $3,375,000 to Edina’s Affordable Housing Trust Fund ($125,000 for each of the 27 affordable units that would otherwise be required on-site). The funds must be paid prior to the issuance of a building permit for the market-rate apartment project. No additional housing funds are required for the new office building or the new commercial bank building.  After the funds are received by the City, they will be directed to a different affordable housing project in Edina. The specific project where these funds will be used has not yet been determined by the City.

     

    Also wondering exactly how the TIF works. Does the $22 million funded by the ‘city’ essentially mean Edina residents are picking up the tab for the developer or is that $22 paid back by the developer? 

    When TIF is pledged in Edina, the developer is required to bear the upfront costs and bear the financial risk. The developer’s $251,000,000 in debt and equity is at risk if the project fails, if the costs exceed the budget or if the revenue generated is less than anticipated. The City does not contribute any upfront money and does not assume any financial risk under these terms.

     

    After this site is fully redeveloped with new bank, new office, new retail, new residential and related infrastructure, the  estimated market value of the site is expected to increase from $14.9 million to $184.8 million – a 12x increase. The annual property taxes paid are expected to increase from $485,000 to $2,500,000 – a 5x increase over the existing condition.

     

    Upon completion of Phase 1 (267 apartments), the City would issue a $5 million TIF Note to reimburse the infrastructure costs related to subdivision of the large parcel into four smaller parcels. These new roads, sidewalks and plazas would be secured with permanent public easements. Phase 1 would also include 118 public parking stalls on the street level of the apartment block. The public could use these areas while the developer must maintain them. This TIF Note would be paid using only the “new” property taxes generated by the new construction over 15-years. The “base” taxes continue to be distributed to the Schools, County and City. The developer bears the risk if the “new” taxes are unable to repay the TIF Note.

     

    Upon completion of Phase 2 (275,000 square feet of professional office space, retail space and structured parking), the City would issue a $17 million TIF Note to reimburse the additional infrastructure, additional public plaza(s) and additional public parking (540 parking stalls). This TIF Note would also be paid using only the “new” property taxes generated by the new construction. The “base” taxes continue to be distributed to the Schools, County and City. The developer bears the risk if the “new” taxes are unable to repay the TIF Note.

     

    In Edina, the use of TIF is intended to address unusual costs that hinder private investment recognizing that benefits to the general public should result from the private development. During the 15-year term of the TIF District, the City also applies safeguards to ensure that the use of TIF does not create an excessive profit for the developer. Additional information about TIF can be found here: https://www.edinamn.gov/1833/Understanding-TIF


    -Bill Neuendorf, Economic Development Manager

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    Is there really a need for high-end housing in Edina? What are you doing to provide housing ( like townhomes or updated condos) for middle class citizens, like teachers, who really want to live in Edina? There are people who want to live in Edina instead of Eden Prairie or Bloomington, who would become involved in the community and volunteer and contribute and patronize local businesses. Isn’t that how Edina should want to grow?

    Ms Rose asked 7 months ago

    While most of Edina’s residential neighborhoods consist of single-family homes, there are also thousands of apartments and condominiums that are currently available at a wide variety of price points throughout the city. In recent years, hundreds of new apartments and some new condominiums have also been built. These new units are also priced to meet a variety of income levels.

     

    In recent years, City policy has required most newly constructed apartments to include some affordably-priced units too. In lieu of including affordable units in the new construction, some developers choose to provide a payment to Edina’s Affordable Housing Trust Fund. This Fund is used to support affordably-priced units elsewhere in the city.  Since this 2015 policy was enacted, 161  new affordably-priced units have been constructed throughout the city. An additional 228 affordably-priced units are currently under construction with completion expected in 2023 and 2024.

     

    The City also sponsors and supports a number of housing programs to support single-family home ownership. Since the “Come Home 2 Edina” program was started in 2007, 132 moderately priced homes were purchased with financial assistance. Additional information about the City of Edina’s affordable housing policies and programs can be found here: https://www.edinamn.gov/1819/Affordable-Housing 

    -Bill Neuendorf, Economic Development Manager

Page last updated: 23 Mar 2022, 06:15 AM