Aquatic Center Tax Abatement

Let’s be clear. Approval of the tax abatement bond for the aquatic center will be an increase to Edina’s pending 17% general levy increase.

In the January 21, 2025 CC meeting, staff shared a memo that said: “It is estimated that 75% of visitors are from outside Edina.” Therefore, the vast majority of attendees. are NOT residents. Accepting this information as materially correct, the aquatic center pool project does not meet the Minnesota state statue for “greater benefit” to EDINA residents and therefore it would seem that the project does not qualify as an appropriate use for an “abatement bond”.

In the June 17, 2025 CC meeting, the presentation made by staff included the following bullet point on page 9 of 12: “Financial History - Break-even operating cashflow”. A shout out to the ‘EdinaCivicObserver’ who shared the aquatic center’s financial history back to 2000 which reveals two key points:
1) on a CASHFLOW” basis, the pool was NOT breakeven in 2023 or 2024 and financial performance has declined each of the last four years, and
2) over the last 25 years, (2000 – 2024) the cash flow generated by the pool is $6,527,000 --- barely half of the proposed $12,965,000 tax abatement bond.

In the June 17th CC meeting, Mr. Anhut of Ehlers, shared the $4,392,000 TOTAL cost (principal & INTEREST) for the proposed city bonds to pay for “street reconstruction”. One is then left to wonder why neither Mr. Anhut or Staff chose to do the same with the pool abatement request. Instead, Mr. Anhut and staff only referenced the $8,985,000 of PRINCIPAL for the aquatic center project whereas total tax revenues to be abated are $12,965,000.
$ 8,985,000 bond principal
$ 3,362,377 interest
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$12,347,377 sub-total
$ 617,369 other items / 5%
-----------------------------------------------------
$12,964,746 TOTAL TAX ABATEMENT
This approach harkens back to approval of the most recent TIF districts where interest costs were not shared. And, where prior TIF districts collected tens of millions of tax dollars in ‘excess’ funds to then be doled out over the next decade to pet projects.

Given past behavior by this City Manager, it makes one wonder whether a project that was estimated at $6.5 million as recently as January 2025 and now stands at $13.0 million is more about finding a way to fund the much longer laundry list of aquatic center projects as chronicled in the June 20th edition of the Sun Current:
“The original pool pump house structure (from 1958, when the Aquatic Center opened) needs replacement to accommodate changes in State Code related to pumping apparatus, filter requirements, electrical capacity and surge tank reservoirs to address capacity displacement. Aquatic Center visitors will also see the usable deck space expand in this area and, if budget allows, the wooden shade trellis between the zipline and zero-depth entry pool will be replaced along with other user amenities. The Edina Parks & Recreation Department would like to pursue other improvements at the Aquatic Center, including new locker rooms, concessions and guest services in a future project.”
A list that is currently absent from the City’s 2025 - 2030 capital spending plan.

Finally, the timing and lack of detail supporting the decision smacks of the “Washington Monument Syndrome” --- i.e. isolate a treasured item and threaten its funding.

Regards,
Ralph Zickert

The current debate over this ill-conceived proposal to use a tax abatement scheme to fund renovations for Edina’s Aquatic Center highlights deeper issues in the community.
The “tax and spend” mentality of most current City leadership is reflective of people who are apparently ignorant of the fiscal prudence and long-term planning that built the City.
Most current leaders have not lived in the City more than fifteen to twenty years.
They did not “build it,” but they are dismantling it in a hurry.
Many supporters of these renovations are apparently nostalgic for the days when Edina had exclusionary covenants and a population that was financially self-supporting and socially self-regulating.
Those days are gone forever, as reflected in the steep drop in Edina’s standing as a “destination” suburb.
Today’s Edina has seen a sharp uptick in crime, rapidly declining academic achievement in its schools and lack of vision in its leadership.
The current trajectory of “tax and spend” on “bait and switch” proposals is unsustainable and will contribute to the complete devolution of the community.
The turnaround starts with reining in spending on projects such as the Aquatic Center at the expense of public safety.
Edina cannot afford the alternatives.

I have lived in Edina for the last 40 years. My kids were regular users of the Aquatic Center while growing up here It was a highlight of growing in this premier community, and one of the things attracting young families. It giving kids a chance for good clean fun with family friends. Time at the pool is time not spent on screens. I want young families today to have the same opportunity and will gladly pay higher taxes to make sure it stays open for all. When we spend so much for services than primarily benefit adult men, such as our fine golf facilities, we need to do this for young families.

Edina needs to take a deep breath and step back from this rush job project to spend almost $10 million before summer is over. Maybe keep the pool closed for the 2026 season, to give everyone more time to think this through? The Aquatic Center is only open for 10 weeks a year. Spending $10 million on something used so little seems like a waste of money. Maybe permanently close it down? Edina is not lacking for swimming pools. The City already has an indoor pool at Edinborough Park. Two country clubs in Edina with pools. Dozens of apartments with pools. Health clubs with pools. Several swim schools with pools. Richfield and SLP community pools within 5 minutes of Edina. And with this abatement proposal, for 15 years, the property taxes that 328 homes pay will go towards paying-off the pool debt, rather than going into the City’s operating budget. Bad idea!

I listened to the meeting on June 17 My question is why wasn't this address in 2021 and now all of a sudden you want the tax payers to subsidize a project that lose money every year. Kathy had a great question what's the percentage of users from Edina . But my surprise was how Derek Otten and Pa Thao couldn't even answer the question on the percentage. Was this request brought up in the middle of the summer when nobody's really paying attention what's going on in city?
That's my thought. If you ran a business and you were losing money every year wouldn't you close it?

I listened to the meeting on June 17th and it seems that the true cost of this project is undetermined and that ultimately if that amount of taxes is "abated" this means funds are not available for other projects that might impact more residents? I think it would be interesting to know what % of users of pool are Edina residents? Most apartments that go up these days have a pool. I have listened to Park Board meetings and they admit they have to keep admission prices on the low end for the area as the Edina pool is not as state of the art as so many other community pools and water parks. It seems Edina taxpayers will be asked to subsidize a regional amenity.  One speaker said cheaper to buy everyone pool passes to Lifetime!! Very much opposed to this and it is a shame it was allowed under our city leadership to decline to this emergency situation.

The proposed tax abatement for the Edina Aquatic Center, tied to MN HF245’s $10.5 million in state bonds, could significantly impact local taxpayers in several ways. By redirecting property tax increments to fund the aquatic center’s improvements, the abatement would reduce revenue available for essential services such as schools, road maintenance, or public safety, which rely heavily on property taxes—approximately 37% of Edina’s annual revenue. This could lead to higher property taxes for residents or a reallocation of the tax burden onto other property owners, increasing financial pressure on households and businesses. Additionally, the aquatic center’s long-term maintenance and operational costs, which are not covered by the bond, could further strain the city’s budget, potentially requiring future tax increases or cuts to other services. Prioritizing a recreational facility over broader community needs may create inequitable financial consequences for Edina taxpayers, risking long-term fiscal instability.

Mayor / Council Members,
City staff has scheduled a public hearing and a city council vote this coming June 17th on the how to fund a new pump for the Edina pool . On BTE (Better Together Edina), city staff has put forth two funding alternatives asking for public input:
“The first proposal involves the City abating property taxes levied on the property identified in Exhibit A. The second proposal is for the City to issue General Obligation Tax Abatement Bonds…”

Without answers to the following questions, it seems unclear how the Council can be asked to vote on this matter:
1) Nowhere on BTE has city staff shared how tax abatement works, with respect to city finances or why these are the only two alternatives.
2) Nowhere on BTE has city staff shared the pros / cons of the two alternatives. Without that transparency neither residents nor the council can property evaluate the alternatives.
3) Nowhere on BTE has city staff shared the project details with respect to design, engineering, equipment, and the financing / interest costs.

Similar to the June 3rd decision to outsource the assessing department to Hennepin County, Manager Neal is again forcing a significant budget decision to be made in isolation. On the night of the vote, the pool will be 62 days from closing for the season. It’s not like a new pump will impact this season so why the rush?

Finally, this is yet another funding option that further obscures the cost of running the city. Like a TIF district it will skim future revenue off the top and create yet another ‘piggy bank’ with little initial public awareness and even less future visibility or accountability.

The Council has said it was going to press for a better 2026 budget process. It’s time to step up. For the cost of this project, you could fund Lewis Park shelters and then build eight more.
regards
Ralph Zickert

Susan McCarthy. I live in the Cornelia Neighborhood.

I am EXTREMELY against this proposal. First and foremost, residential property taxes need to cover our annual city budget and capital improvements, which as you know, are already underfunded for this coming year and already required an extreme and controversial property tax increase. My understanding is that you now wish to earmark the property taxes on certain residential properties to use instead for paying the interest and servicing costs on a self-made loan (municipal bonds) to repair the Aquatic Center. In my opinion, the city has been tragically negligent in tracking and prioritizing future maintenance needs and budget for them accordingly and instead, comes up with these stop-gap, last minute strategies such as property tax abatements and the creation of new TIF districts.

Here's the definition of what residents are in for (reprinted here from a google AI search):
When cities use property tax abatement to fund city expenses, "using the fund to pay bonds" refers to a specific financing mechanism where the revenues generated by the abated property taxes are used to repay bonds that the city has issued.

Here's a breakdown:
City Issues Bonds:
The city issues municipal bonds to raise money for eligible projects, such as public improvements, acquiring land, or reimbursing property owners for certain costs. These bonds are essentially loans that the city takes out, with a promise to repay the principal and interest to the bondholders.
Property Tax Abatement:
Simultaneously, the city grants a property tax abatement on certain properties. This means that a portion of the property taxes that would normally be collected from those properties is directed to the city instead of the general tax base.
Abatement Revenues Pay Bonds:
The revenue generated by the abated property taxes is then specifically dedicated to paying the principal and interest on the bonds that were issued for the project. The city essentially "abates" the property taxes and uses that specific stream of revenue to pay off the debt incurred by issuing the bonds.

In essence, using the fund to pay bonds means that the city utilizes the abated property taxes as a dedicated funding source to service the debt on the bonds that were issued to finance a specific project. This allows the city to undertake projects upfront using the funds raised from the bond issuance, with the assurance that the abated property taxes will provide the revenue stream to repay the bonds over time.

NO. I am against the use of property tax abatements for maintenance on existing buildings and infrastructure.

I live at and own one of the Property IDs listed in the notice. Why these Properties, or only these Properties? Because they are geographically close to the aquatic center? Agree with some of the prior feedback this feels pushed/rushed with a lot of alternative financing options unexplored. Love the aquatic center and think we should repair/upgrade it (for the whole city’s benefit) but what are all the options to pay for the work and why is this one best?

I am in the 'abatement' zone and I don't clearly understand the word or the effect of it. If this is an unforseen and unbudgeted cost, why not just add it to the budget and figure out how to pay for it. Shifting the cost will only mean we pay for it later. That's why Minnesota is having to pay this year for the spending of the excess from last year. Sorry if I sound ignorant about the process but I'm probably not alone.

I am writing to express strong concerns about the proposed $9 million in tax abatement funding for improvements to the Edina Aquatic Center. There are several troubling aspects of this proposal that warrant a pause and reevaluation before any decisions are made:

#1. Lack of Transparency and Planning - This proposal appears to be rushed and unvetted. The $9 million in “necessary” improvements were not even mentioned in the City’s own 2023–2028 Capital Improvement Plan (CIP). For a project of this size and cost to be brought forward without any prior inclusion in the CIP raises serious questions about transparency and governance. How can residents be expected to have confidence in the City’s long-term planning if such major expenditures appear without warning?

#2. Extremely Limited Public Comment Period - The timeframe provided for public input—just seven days from June 6 to June 12—is wholly inadequate. A project of this magnitude, which represents a significant financial commitment and departure from existing plans, deserves a thorough public vetting. Holding a public comment window during a one-week period in early summer, with no significant outreach to residents, feels more like a procedural checkbox than a genuine effort to engage the community.

#3. Questionable Priorities and Increasing Reliance on Obscured Funding Mechanisms - The Aquatic Center is a seasonal facility, open less than three months per year (this year, June 6–August 18). In the context of deferred maintenance on existing year-round infrastructure across the city, spending $9 million on an amenity with such limited use seems frivolous. Even more concerning is the City's continued shift toward “alternative funding sources” like tax abatement and tax increment financing (TIF), which obscure the true cost to taxpayers. These mechanisms lack the direct accountability and visibility that traditional funding methods provide. Taxpayers deserve to know where their money is going—especially when spending is rising so dramatically across City departments.

I urge the City of Edina to delay this proposal until it has undergone a more transparent planning process, been subject to robust community engagement, and evaluated in the context of other citywide priorities. Anything less would be fiscally irresponsible and disrespectful to the residents who fund these initiatives.

The idea of tax abatement for this project is just another indication of Edina’s financial troubles and city leadership’s need to hide the true cost of operations from residents. The use of tax abatement is a terrible idea. ***The thought that for the next 15 years, not a single penny of the property taxes from these 328 properties would go to fund city operations such as police and fire is disturbing at two levels: ***FIRST, the tax abatement option is yet another way for City leadership to obscure the cost of City government. Much like Edina’s dozen Tax Increment Financing (TIF) districts , the property tax revenues and the costs they fund have limited public review. Look no further than the $30 million earmarked for the TUNNEL UNDER FRANCE. ***SECOND, the idea that City leadership even suggests this option tells residents that Edina’s financial ‘WANTS’ are so out of control that the option of using the normal borrowing process jeopardizes Edina’s credit rating --- why else pledge tax revenues from a dedicated residential area. ***This year Edina has a looming 17% increase in the property tax levy for 2026. After six months of ‘hard work’ to reduce that LEVY PERCENTAGE, the best ideas proposed by city leadership are: 1) increase the fees the CITY currently adds to your utility bill by one million dollars and 2) add another ½ percent to the Edina’s sales tax --- NEITHER of which reduces the tax burden on residents. ***You need look no further than the recent City Council decision to TRANSFER, not save, but transfer one million dollars of Edina’s operating costs onto Hennepin County’s tax levy. A change that provides no real tax relief.
Posted 06Jun2025
Ralph Zickert