Tax Increment Financing (TIF) is one of the few public financing tools available to municipalities in the State of Minnesota. Since the 1970s it has been used sparingly in Edina to achieve redevelopment goals.
When a TIF District is created, a base valuation of the property in that area is established. All taxing authorities continue to receive tax revenue from the base valuation. Taxes from increases in assessed value go to the TIF account and pay debt or other financial obligations necessary to complete the redevelopment project. After the obligations are met, the TIF District closes and all taxing authorities benefit from the new, higher valuation.