News Flash

TIF: Tax-Increment Financing

Posted on: October 7, 2019

Using TIF Benefits Residents in Many Ways

Tax-increment financing helped pay for cleaning up industrial contamination and building the infrastructure on a site that became the condominiums, offices, library and Edina Senior Center surrounding Grandview Square Park.Tax-increment financing (TIF) is a tool Edina has used sparingly over the past several decades to deliver long-term outcomes that benefit the general public. The public benefit from Edina’s use of TIF usually falls into four categories:

  • Blight mitigation or elimination
  • Infrastructure improvements
  •  Public amenities
  • Affordable housing

“The City has intervened to prevent blighted, obsolete buildings from becoming a true nuisance to the neighbors and a hazard to the public,” said Economic Development Manager Bill Neuendor

An example would be the old Edina Cleaners & Launderers building at West 45th Street and France Avenue. The former single-screen movie theater and auto garage had been converted to a laundry operation by knocking holes in walls and filling in the sloped floor to accommodate equipment. This arrangement left few options for reuse. Combined with little parking, the buildings were obsolete and could have sat empty for years while a developer waited for a financially feasible project that maximized profit. Instead, the use of TIF has spurred a more modest four-story apartment building that includes retail space, public parking, public outdoor space and the removal of overhead power lines, all of which better fit the popular area. Infrastructure doesn’t sound exciting, but it includes those systems people rely on every day: roads, sidewalks, utilities and more. Take a walk along France Avenue south of Fairview Southdale Hospital and you’ll actually be standing on what TIF funds helped build. While France Avenue is a county road, Hennepin County didn’t have money designated to add sidewalks, crosswalks and lighting. A few years ago, it was common to see workers and residents run across France, dodging cars like the video game Frogger, to get to a lunch spot or Centennial Lakes Park. In 2013-2014, the City used TIF money from the Centennial Lakes TIF District to make France safer and more convenient.

People love plazas and open spaces, but it costs money for the land and to build them. In Edina, TIF funds are used to create new public amenities by having a developer build them as part of a redevelopment project. TIF helped turn a site of industrial contamination into the Grandview Square project that includes condominiums, an office building, the Edina Senior Center and Edina Community Library, all connected to a public park.

“While the City and Hennepin County used bond revenue to build the Edina Community Library and Senior Center there, the City used TIF to assemble the land, clean up the contamination and install the infrastructure that made it all possible,” Neuendorf said.

The City needs affordable housing so its businesses and organizations have workers, but it can be a challenge to build when the lower rents or purchase prices won’t pay for the cost of construction.

“TIF helps fill the gap between what the project needs to borrow and the costs to construct it,” said Affordable Housing Development Manager Stephanie Hawkinson. TIF funding will help secure 62 units of affordable housing for 25 years as part of the 7200-7250 France Ave. project.

While not every single Edina resident experiences a direct benefit from the use of TIF, they share in the overall outcome. “Every taxpayer will have a better place to call home when improvements are constructed that deliver long-term public benefit,” Neuendorf said.

Pictured is Egghead at Grandview Square Park. Tax-increment financing helped pay for cleaning up industrial contamination and building the infrastructure on a site that became the condominiums, offices, library and Edina Senior Center surrounding Grandview Square Park.

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