--- title: 72nd & France #3 TIF District - Project Update ## author: Douglas Shumway date: D:20240501220600Z --- ## Item Report August 13, 2026 ## Housing & Redevelopment Authority ## Item Number: 8.1 Department: Community Development ## Item Activity: Information Prepared By: Bill Neuendorf, Economic Dev Mgr Item Title: 72nd & France #3 TIF District - Project Update ## Action Requested: No action required; for informational purposes only. ## Information/Background: There has been speculation about the status of the 72nd & France #3 TIF District with potential changes to the development program on the NW and SW parcels. The following information summarizes the status of this TIF District in an effort to curb misinformation. ## Summary The 8-acre property at 7235 France Avenue was confirmed to satisfy the State definition of "sub- standard" aka "blighted" and qualifies as a TIF Redevelopment District. The City Council and HRA approved the establishment of the 72nd & France #3 TIF District on November 19, 2024. The approved TIF Plan establishes the maximum 25-year budget ($80,982,935) and maximum duration (25 years) for this District. The HRA may enter into binding repayment obligations from this TIF District for the next 5 years. These budget limitations are based on projections from the 2024 site plans approved by City Council. At this time, there has been no commitment to collect or to spend this maximum amount. Private Redevelopment - The HRA approved three TIF Redevelopment Agreements with the anticipated real estate developers for this site: Enclave Companies (NW and East parcels) and Lifestyle Communities (SW parcel). These funding agreements are performance based; after the developers complete the work, the HRA will provide limited reimbursement. The HRA has no commitment to provide reimbursement to the developers until after they complete the projects, incur the private debt and deliver the agreed-upon public benefits. If any of the developers fail to complete and maintain the projects, the HRA has no obligation to provide reimbursement. Public Improvements - The City Council terminated further study and financing consideration for a dedicated pedestrian route that crossed France Avenue to connect neighborhoods on both sides of France Avenue / County Road 17. A pedestrian underpass was explored in 2024-25 after this was identified as being preferred instead of an over-the-road bridge. This initial concept was anticipated to be partially located in this TIF District and primarily funded with incremental tax revenue collected from the new buildings located in this District. This type of expenditure is no longer anticipated. ## Significant Fiscal Measures Pertaining to 72nd & France #3 District ## Description Amount Explanation Total anticipated private investment $309,949,995 • Based on 2024 site plans that include four independent multi- story buildings arranged on 3 lots and 2024 cost estimates • This degree of private investment would not be possible without the use of TIF to provide reimbursement for extraordinary costs Pre-TIF property taxes paid $348,609 • Pay 2024 property taxes paid on 8-acre site ## Property Taxes after completion $3,640,000 • 10x increase • Estimate based on 2024 site plans completed in 2030 • Will only be achieved if private projects can secure private debt and equity to enable construction ## Original Tax Capacity $276,948 • Based on 2024 valuations of 8-acre site ## Projected Tax ## Capacity $3,967,145 • 14x increase • Estimate based on 2024 site plans approved in 2024 • Will only be achieved if private projects can secure private debt and equity to enable construction ## Total Cumulative ## Spending Budget $80,982,935 maximum • Serves as the cumulative spending cap over the 25-year duration of the Financing District assuming original assumptions are accurate • This limits the total spending to a confirmed amount but does not obligate the HRA to collect or spend this maximum amount • Based on the site plans and schedule approved in 2024 • Actual amount may be less if the project scale is reduced or schedule is delayed ## Cumulative ## Redevelopment ## Costs $33,730,623 (42%) • Included in $80 M total spending budget • Cumulative amount over 25-year duration of the Financing District assuming original assumptions are accurate • State law identifies the type of costs qualified for TIF expenditures including: land acquisition, site preparation, site improvements,affordable housing, utilities, limited private improvements and all public improvements • Typical expenses include: payment of TIF Notes, payment of public debt, payment for public infrastructure expenses ## Description Amount Explanation ## Cumulative City ## Administrative Costs $7,712,660 (9%) • Included in $80 M total spending budget • Cumulative amount over 25-year duration of the Financing District assuming original assumptions are accurate • Can be retained by the City for administrative expenses, such as City staff, financial advisors, legal advisors, strategic planning, and miscellaneous expenses to manage the District • These funds would not be available to the City without the use of TIF ## Cumulative ## Financing Costs $39,539,652 (49%) • Included in $80 M total spending budget • Cumulative amount over 25-year duration of the Financing District assuming original assumptions are accurate • Dedicate to interest payments on TIF Notes or public debt issued to fund public improvements ## Next Steps If any of the lots are sold to a new developer, the related TIF Redevelopment Agreement will be renegotiated. Whlle financial gaps are anticipated to remain regardless of the developer, the HRA retains rights to fully evaluate and scrutinize the proposed public benefits and the financial pro formas of new projects and new real estate developers. The HRA has full discretion regarding whether or not to use TIF to achieve affordable housing and redevelopment goals. City staff will continue to apply Edina's thorough policy on the use of Tax Increment Financing on any new project proposed for this TIF District. Edina's TIF policy seeks to provide only the minimal amount of TIF support necessary to enable private financing while simultaneously delivering long lasting benefits to the general public. Edina's TIF policy includes multiple safeguards to ensure that TIF support does not result in excessive profits. City staff will continue to update the HRA as each phase of this redevelopment project takes shape. ## Resources/Financial Impacts: No impact. ## Relationship to City Policies/Plans/Budget Pillars: Not applicable. ## Values Impact: Not applicable. ## Supporting Documentation: Documents marked with "Board Portal" do not meet ADA Web Content Accessibility Guidelines (URL) and are not included in the public packet. To request a board portal document, please submit a data request (URL). ## None