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