--- ## title: Item Report ## author: Douglas Shumway date: D:20240501220600Z --- ## Item Report August 13, 2026 ## Housing & Redevelopment Authority ## Item Number: 7.4 Department: Community Development ## Item Activity: Action Prepared By: Bill Neuendorf, Economic Dev Mgr Item Title: Resolution 2026-05 Approving the Decertification of 66 West Tax Increment Financing ## District ## Action Requested: Approve Resolution 2026-05 approving the decertification of 66 West Tax Increment Financing District ## Information/Background: The 66 West Tax Increment Financing (TIF) District was established in 2016 to facilitate the adaptive reuse and expansion of a commercial building to be used as affordable housing. Developed by Beacon Interfaith Housing Collaborative and managed by Simpson Housing Services, the 66 West Apartment building provides 39 units of affordable rental housing in a supportive environment for young adults that had previously been homeless. An unanticipated funding gap temporarily hindered the construction financing for the project. A one-time funding contribution from the HRA allowed this project to be constructed in 2017. The HRA sourced funds from the adjacent Southdale 2 TIF District and a $275,000 interfund loan was structured in the event that future property taxes from 66 West were sufficient to repay the HRA contribution. This strategy was selected by the HRA to sustain long-term funding for future affordable housing in Edina. At year end, the balance of the interfund loan will be $169,037. In 2019, the Amundson Avenue TIF District was established by the City and HRA using special legislation related to the use of funds from Southdale 2 District for affordable housing. The creation of this District enabled the commercial land to be transferred to a private developer to construct affordable housing without TIF support. This District continues to collect tax increment as a source to support future affordable housing in Edina. This TIF District collected $30,326 in tax increment in 2025. The overall property tax payment including TIF and distributions to City, Schools, and County was $39,127 in 2025. Due to changes in Minnesota property tax laws, the tax increment revenue collected in the 66 West TIF District is lower than initially projected. This tax change reduced the overall property tax burden on affordable housing with the "Class 4d" tax designation. This change was made by state legislators in an effort to reduce operating costs and rent of affordable housing. In 2025, the property in the 66 West District paid a total of $14,424 in property taxes, $10,511 of which was tax increment. In 2026, the tax increment is anticipated to drop to $7,380. With this statewide change in tax law, the repayment of the interfund loan has slowed to the point where the administrative burden on City staff is no longer worth the effort. To better use the City's limited staff resources, it is recommended that funds from the Amundson Avenue TIF District be used to repay the Southdale 2 Interfund loan in full. It is further recommended that the 66 West TIF District be decertified no later than December 31, 2026. This early decertification will halt the collection of tax increment at the end of 2026. In the future, the property taxes that had previously been designated as "tax increment" will be distributed to each of the taxing agencies. ## Resources/Financial Impacts: The recommended actions will use existing funds to repay an internal loan with no net impact to the budget. This action will reduce the future administrative workload and will return a parcel of land to the overall tax base. Staff can carry out these actions as part of their regular workload. ## Relationship to City Policies/Plans/Budget Pillars: Strong Foundation - Early decertification of this TIF District reduces the administrative workload and returns this property to the overall tax base. Livable City - support and financing of affordable housing contributes to a more welcoming and vibrant community. ## Values Impact: ## Stewardship Ctiy staff monitors the use of public finance programs to ensure City resources are used wisely. Early decertification of this TIF District will reduce the administrative workload without a negative impact to the City's efforts to enable future affordable housing. ## 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). ## 1. Staff Presentation_Decertify 66 West TIF District 8-13-2026