[0:10] Okay. Good morning. Um, welcome to the Housing and Redevelopment Authority meeting of the city of Edina. Today is [0:17] Thursday, September 25th. It is 7:33 a.m. and I will call the meeting to [0:23] order. Um, uh, Executive Director Neil, will you please take the roll call? [0:30] Commissioner Risser here. Commissioner Pierce here. Commissioner Agnu here. Vice Chair Jackson [0:36] here. And now it's time for the pledge of allegiance. I pledge algiance to the flag of the [0:43] United States of America and to the republic for which it stands. One nation [0:49] under God, indivisible, with liberty and justice for all. [0:56] So, I forgot to say that we are continuing to hold these meetings in a hybrid fashion. Um, today's meeting [1:03] there will only be um time for public input for community comment. Um, and you [1:08] are allowed to speak for up to three minutes about anything that is not on today's agenda or scheduled for a future [1:13] public hearing. And that will come up pretty quickly here in our agenda. But we need to approve our agenda. So, um, [1:21] if we would, uh, anybody have anything they want to change on the agenda? So, I [1:26] have a motion to approve the meeting agenda. So, move. I second. Right. Um, any further discussion? All [1:33] those in favor signify by saying I. I. Okay. We have an agenda. So, now, as I [1:39] said, community comment comes up really quickly. Uh, we don't have anybody in the audience right now. Um, Director [1:45] Benerat, uh, what's your protocol? I don't have anyone online yet either, but [1:51] because there is a slight delay in the broadcast, I recommend we wait about a minute before moving on. My clock shows [1:57] that it's 7:36, so I will come back to you at 7:37 or when I have a caller, whichever's first. [2:02] Terrific. Thank you. [3:15] It's been a minute and I still don't have any callers. Um I think we've given people adequate time to call in so I [3:20] think it's safe to move forward with your agenda. Okay. Thank you. Um so Director Neil, this is when we respond to previous [3:27] community comments. Were there any comments at our last meeting? We don't have any community comments from our last meeting to respond to [3:32] today. Okay. Thank you. So now we're to the consent agenda. Is there anybody who'd like to take things off the consent [3:39] agenda? All right, we have a couple of matters. Um, do I have a motion to approve the [3:44] consent agenda? So moved. Second. Moved by Commissioner Agnu, a second by Commissioner Pierce. Any further [3:50] discussion? All those in favor signify by saying I. I. All right, it passes. And we are on [3:57] to today's um items. Our first item on the agenda is from our economic [4:02] development manager, Bill Nuendorf, and it's about a resolution amending a [4:08] spending plan for uh three tip districts, the Southdale 2, Pentagon Park, and Wooddale Valley View. Um so [4:16] hand it over to you, Dire Manager Newendorf. Great. Thank you. Good morning. Uh yes, [4:21] this first item is an action item. We are seeking your approval on resolution 2025-08 [4:27] which of course is in your packet. Um I have prepared a um uh a PowerPoint [4:33] presentation to review this. Uh we are seeking to amend a spending plan uh that [4:39] guides fund the use of funds from three uh existing uh tax increment financing [4:44] districts. Um I'll go through this in a little bit more detail. Uh the spending plan was first created back in 2021. So [4:51] it's been a few years. Um and a lot of the information is the same. Um but I will call out the couple uh details that [4:59] we're seeking to amend and update. Uh so first of all, as a reminder, uh this is [5:04] the city's spark program. That's what we've been branding it as. And it uh uh was born from special legislation passed [5:11] by the state of Minnesota back in 2021. And that legislation allowed municipalities throughout Minnesota [5:19] uh a new opportunity to invest their unallocated tax increment funds. So what [5:25] that means is some older tiff districts, some current tiff districts have funds that are collected. So these are taxes [5:31] that have already been paid and they're collected uh in the tiff fund, but uh [5:36] previous state laws prevented those monies from being spent. Um so this special legislation gave cities uh a new [5:43] opportunity to invest those dollars in their community. Uh earlier this year that in the 2025 [5:50] legislative session, the state of Minnesota passed additional new legislation that would slightly modify [5:57] uh the terms of how those monies could be spent. Um so as background uh a few years ago [6:05] the city did create what we're calling the spark program uh to use these unallocated monies. Uh we used funds [6:13] about 700,000 from the Pentagon park district. Uh about 8.5 million from our [6:19] Southdale 2 TIF district which is now expired and about 350,000 from the old [6:25] 70th and Cahill Wooddale uh tiff districts that are also expired. and uh [6:31] um that that created a total amount of about $9.5 million that we uh put into [6:37] this unallocated fund to invest in new projects. Uh in a few minutes I'll go through how [6:44] we've used those monies. Um but the the new legislation allows us to use the [6:51] interest earnings on those monies. before they were spent, they accumulated interest. But the previous tax laws did [6:58] not allow those interest earnings to be spent. So, uh the new legislation re recognizes that uh interest was [7:05] accumulated. Uh today, we are looking at about $775,000 [7:10] in interest earnings on those monies uh that at the moment is currently stranded in a way. Um, so if we do amend the [7:17] spark plan, our total budget is about 10.3 million and so far we've we've [7:22] invested and spent about 9.2 of that. Um, the the use of the funds is fairly [7:30] simplistic. Um, the tiff these are tax increment or tiff monies and they can be [7:35] used to fill gaps in private development projects. Um, just like tiff, they cannot be used for parks. They can't be [7:42] used for for fire trucks or general uh municipal purposes. They have to be invested in brick andmortar capital and [7:50] that can either be brand new construction or re rehabilitation uh remodeling of a building. Um they can [7:57] also be spent on some public improvements related to that private investment. For example, we did repair [8:03] some sidewalks right in front of a business and it was a business's front door. They needed a sidewalk that wasn't [8:09] cracked. that's an an eligible expense. Um, and the state legislation allows [8:15] these monies to be invested as either a grant, a loan, uh, also an an equity [8:21] type investment. So, the state law is pretty flexible. Uh, and to date, how has Adina used [8:27] these funds? We've supported a number of projects that are that are uh, mostly completed. Uh our first project was the [8:34] Adina Theater, getting that building back uh operational, getting it updated and restored. We also pledged funds to a [8:42] new restaurant uh that is currently under construction at 50th in France. That's that basement bar with a music [8:48] theme. We also invested some funds with the Adina Innovation Lab run by our Chamber [8:54] of Commerce. While that project is complete, earlier this year, we did uh discuss that the the programming in that [9:02] uh facility has been terminated for lack of operational funds, but those those dollars were invested. The building was [9:08] finished. We've also invested quite a quite a bit into the Finch Apartments. [9:13] Uh that project also included a brand new public street. Um and so we use the [9:19] uh the spark monies to to uh support the construction of that street. Uh we also [9:25] invested money in the settings apartments. That's the new one under construction at 72nd in France. Uh and [9:33] also made a a pledge to the Enclave lifestyle communities project, the old Macy's furniture site. Um and those [9:40] funds are pledged but they are not yet uh in uh expended. And then the last way we used them was uh in creating a [9:47] streamline grant program which provides capital support for small business. Uh and so far we've uh we've used funds for [9:54] one new cafe uh up at 44th in France. Uh and I do have a n number of other small [10:00] businesses that are uh interested in the interested in the program if it can be [10:06] amended and and uh if if we do extend the use of the program. So so far we've [10:11] used like I mentioned about nine about 9.2 million we've either used or pledged [10:16] out of the 9.5 total. So there's still a little bit left. [10:22] So the amendment has to has to do with when the funds can be used. The initial [10:27] legislation uh required that the program come to conclusion at the end of this year uh December 31st, 2025. Uh the the [10:36] new state legislation extended that date by one year. Um so that would push uh [10:41] the use of the funds uh to be con to be concluded by the end of 2026. [10:47] uh the um uh that it's a minor it's a minor [10:54] change but as I mentioned I have a number of smaller businesses that are ready uh to move forward if those funds [11:01] can be expended considering that it's almost October they're not going to finish by this year so certainly [11:07] extending this program one more year uh is is certainly recommended by myself [11:13] of course there's a process to do this and the process begins here with the HR uh and passing this resolution. What [11:20] this resolution then does then does is set in motion a public hearing to be held in October and then bring it [11:26] forward to the city council for final consideration in early November. So today is just the first step in this [11:32] process. Uh if you approve this resolution today, you will hear about this again uh on at least two future [11:37] occasions. Uh I also wanted to put a slide uh in [11:43] here about what if we don't do this? what if we decide just to let the program expire and and leave some funds [11:48] in there? So, that certainly is an option for us. Um, if we if we decide not to amend the spending plan, uh [11:56] there's about $900,000 uh in funds that are uh that would be unspent. Um what the process would be [12:04] would be to uh at the end of the year, early next spring, we would take those leftovers monies and return them to [12:11] Henipin County. They would then redistribute those not to individ individual taxpayers but to the tax [12:17] taxing agencies. So the city would receive about a third, the county would keep about a third and then eventually [12:25] the remaining third would find its way to the state. Um so uh that's what would [12:30] happen if we did not uh amend the plan. Certainly my recommendation is to have those tax dollars that were earned in [12:37] Adina, collected in Adina, um returned to Adina to help our community. Nothing [12:43] against the county or the state, but these are local tax dollars that I feel are best expended here in our community. [12:51] So, if we do extend the program, I would recommend re uh retaining the same [12:56] process as we've used the last couple years when it comes to deciding how to use those monies. Um, it's not purely a [13:03] staff decision, but even even that streamlined grant program, I'll work [13:09] with the with the original business owner, put their proposal together, review it, and vet it, but then bring it [13:15] forward to this body and have you approve those contracts, whether it's a grant or a loan. Um, so that process [13:22] would would remain the same. We do require a local match. It's not just uh free funds. It is intended to [13:30] fill a gap and to see to see that project move forward. And of course the the burden of actually building it, [13:36] hiring the contractor, hiring the architects, complying with all the applicable laws. We keep that in the [13:42] hands of the private owner. Uh what all we're trying to do here is provide them a little bit of capital to give them [13:47] that push to get the project uh over the finish line and get it built. So that [13:52] full uh that that full process would remain the same. And the types of [13:57] projects that we'll be considering are also the same. There's no change there. We'd be looking at renovation of vacant [14:04] commercial buildings or vacant tenant spaces that would allow new businesses to come to our community or existing [14:10] businesses to expand. Uh, also eligible would be construction of new facilities, [14:16] whether that be a commercial business or even a multif family home or a multifamily project. That's also [14:22] eligible. And then of course um we still would be able to make some minor [14:27] improvements to public roadways, parking, sidewalks, uh those public elements that are directly related to [14:33] the business if that's necessary. That's that remains an eligible expense. Um but [14:38] just to be to be um frank about it, the focus here is getting these new businesses up and running. [14:46] So in in summary, um this uh initial step spending plan goes back to 2021. Uh [14:53] based on this new state legislation that passed this year, we do have the ability to ex to extend that program by one year [15:01] and increase the budget to a to a small degree. Um [15:06] uh based on my my conversations conversations with the businesses in the area, this is a program that would be [15:12] helpful to our businesses to really fill those vacant uh spaces and allow job creation in Adina. So I I certainly do [15:19] recommend that this resolution be approved. I turn it back to you, Madam Chair, uh for any discussion or any [15:24] questions. Okay. Do we have any questions? So I've got mold do uh Commissioner Agne first. [15:30] Thank you. Good morning. Um thank you for being here today. Um, so I have a couple of questions. Um, so for the [15:37] interest in particular, what happens if we can't spend that? Does that also get [15:43] returned or do we have to do something else because it's interest? Um, a great question. So my [15:50] understanding is that interest earnings on TIF dollars uh need to be included in [15:58] the, you know, they're retained in that tiff district. So if we don't invest them in this program, they would go back [16:04] to the old tiff districts. Since those are descertified, they would then be returned back to the county for [16:09] distribution. Okay. So they would follow kind of that 1/3 model. Correct. Okay. Thank you. [16:15] Um I also wanted to to kind of just trace this through um to make sure that [16:20] I'm following it. Um so really what we're talking about here is this newly created spark program um and the the [16:28] associated kind of funding plan with it. There's the 10 almost three 10.3 million [16:35] um total. We've previously pre pledged the 9.4, but because of the timing of [16:41] everything, even though we've pledged that amount, we wouldn't necessarily be able to meet [16:49] all of those pledges if we don't extend this timeline to do to give additional [16:55] time for those projects to get underway and see completion. Is that correct? That's exactly correct. [17:00] Okay. So, there's both the let's stick to the obligations or the commitments [17:06] that we've already made of here's the pledges, let's do that full 9.4. And because we now have this new [17:13] interest that we're able to actually recognize and potentially use, um the 775 plus some additional residue, [17:21] 900,000 could also be used now over the next yearish um for some smaller [17:29] additional projects. Is that correct? Also very correct. Okay. Thank you very much. Um I think that's the only clarity I wanted. Thank [17:35] you. Thank you, Commissioner Agnu. And then Commissioner Rouser, could we go back to the image that showed the projects that [17:42] have been funded? And I do have concerns about TIFF being [17:51] used on top of TIFF and that happened with the settings. Um, it happened with [17:57] the Macy's site. And so question, when this legislation was created back in 2021, [18:04] was there nothing in it that said you can't give spark funds to an extent tiff [18:12] district? It seems like double dipping. Um [18:17] there was nothing in the state legislation that addressed anything like that. The whole purpose of that [18:22] legislation was to invest in businesses for for job creation, whether it be construction jobs or permanent jobs. Um, [18:32] and when we when we pledged TIFF to the 7200 project and the Enclave, [18:38] um, when we when we pledged TIFF and Spark, it was Spark in lie of TIFF. So [18:44] for every dollar of Spark money that goes into the project, that'll be one less dollar of TIFF money that goes to [18:50] it. So it's not layered on top. It's it's a replacement. So we will be getting $4.8 million back [18:57] from the TIFF funds from and it's over $4.8 million. When will that 4.8 million [19:03] end up coming back to us and could we get it? I'm very concerned about that in part because it financed very small [19:13] rental units and it's possible those 15 very small rental units might even be [19:19] reduced to 13 or whatever. We don't really have any control over that. Um [19:25] and by we I mean H and city council. Uh, and you know, there was an article in [19:31] the paper yesterday about small rental units really being um naturally [19:37] occurring affordable rentals. And I really feel like we spent 4.8 million on [19:43] something that does not bring much public benefit. And I would love to see those dollars go back to the county. I [19:51] would, you know, we're looking at an 11.03% 03% [19:56] um levy increase and you know with that and actually I'm a little disappointed [20:01] because I I thought it when I looked at this really quickly I was thinking oh we've got nine million dollars that [20:07] could go back to the county but that's not what we have but as we look at this [20:13] list of things we've invested in um it's just very disconcerting. The other [20:18] thing, the innovation lab, it didn't succeed. It involved moving to another [20:23] building. It involved our lodging tax revenue [20:29] compensating for the rent that the innovation lab was supposed to pay. And so I I'm looking at this list and I'm [20:36] looking at TIFF financing in general and I can't help but think about how, you [20:42] know, we really need to be analyzing these [20:48] tiff investments and keeping in mind the impact on the levy, [20:54] you know, because if if the money had gone back, it we'd be looking at a very different um level of increasing the [21:04] property tax levy. So, I I am very concerned about this. I also I have no idea. Well, I did see three [21:12] um potential investments with the leftover funds, but um and one is the [21:19] ebuilding, so putting more tiff into that, and that was the innovation lab [21:25] investment. So, I I feel like I need a lot more information before I can [21:31] approve this. I realize, you know, in the grand scheme of things, we're not talking about a huge amount of money, but um this is for me really troubling. [21:41] So, I I did want to say that. Thank you. I I just uh I I will recognize you, [21:48] Commissioner Pierce. I just want to say what we're approving today. Um when you say you want more information is to move [21:54] this to the city council to allow a public hearing. And I I just want to put that out there that that will give us [22:00] the opportunity to hear from the community and that's another source of information besides um manager newendorf [22:06] if it if we move forward. Right. And I have thought about that and um for me I feel like this needs to stop [22:13] now. Um I feel as so strongly about how tip dollars have been invested that I [22:19] think it would be good to just stop and but I hear your point. Um and so I just want to let people know where I'm coming [22:25] from. Okay. Thank you, Commissioner Pierce. Um, thanks, Madame Chair. [22:32] So, I my two questions I think um are really tangental to uh Commissioner [22:38] Agnu's questions, but if you could go through and just explain [22:45] pled, you use three terms. You pledged, spent, and allocated. [22:52] And so with those three terms, what's the impact at the end of 2026 [23:00] of funds that are pledged but not spent, you know, funds that are [23:07] spent, I think, is is pretty clear. And then you also mentioned allocated. [23:13] Sure. So I've used the terms allocated and pledged to be interchangeable. So apologize for any confusion there, but [23:19] there's not intended to be any difference. Okay. Um, whenever the city and HA uses TIFF [23:26] monies, uh, we pledge them, [23:32] uh, and require the developer to do the work first. I can't think of an occasion [23:37] where we would would have prepaid uh, the developer. So, um, once we pledge [23:44] that, those monies are uh, removed from our budget as available because they've already been pledged. Um, [23:52] a good example might be the Finch project. So, that project uh was approved, I believe, in 2022 [24:00] or 2023. We pledge those monies. Then it took the developer another 6 months to [24:06] finish the financing for the project. Then it took them 18 months to build the project. And now it's still taking them [24:12] another six months to do all the paperwork after they've opened it up. So, um, we've not, uh, well, actually, [24:19] take that back. We um we did uh we just paid them the money. So we pledged it [24:26] back in 2022 2023. It was kind of in limbo for several years and we just [24:31] wrote them the check uh in the last 60 days. Um I don't remember exa exactly when that was. So um that's my intention [24:39] is in our internal um uh uh paperwork. [24:44] We just don't want to commit those monies twice. Uh so that's why I use the term pledge. [24:49] Okay. Um and so then a followup to that. So then projects where we have pledged [24:57] um if if this gets approved then we're extending the time frame by another [25:04] calendar year. Um, at the end of that, if those projects [25:09] are still not completed, then those dollars would then go back to the county [25:15] or what would happen with those dollars that are pledged? Yeah. Yeah. So, they don't automatically go back, but if the if the monies are [25:22] pledged, and I like using real examples just helps me think better. So, um, a [25:27] few years we pledged, um, a small grant to, uh, the music facility, the [25:34] restaurant on on Fran on 50th Street. Um, it's taken a long time for that [25:39] project to come together. Uh, it's under construction. They they broke ground by [25:45] the deadline, but in our contract for those projects, we have defined dates to start the project, to um to invest the [25:53] monies, and then to finish the project. So, if they don't spend the monies in time or don't finish the project in [25:59] time, what we would then do is go back to our contract um and declare them a [26:04] default and nullify any payment on that. Um and so those pledge monies would then [26:11] become available, I suppose. But if we reach that deadline of the end of this year, yeah, [26:16] um we will not have an opportunity to invest those monies again. Uh it's not an automatic return to the county. I [26:23] believe we have 90 days. Okay. And so then there's that begins an internal process through our finance [26:28] department working with our finance advisor to make sure that we've got the right uh amount and then file the right [26:35] paperwork and get it to the right people at the right time. Um so there is a whole sequence and whole process there. [26:41] Okay. Um but at the end of the day it's it's really funds that are spent projects that are [26:47] completed. Correct. Those kind of come off the the scale if [26:52] you will. Correct. Everything else is kind of pending a particular process. Correct. Correct. The another way to to [27:00] another example would be the Enclave project. We've pledged monies, spark [27:05] monies in lie of TIFF monies for some of their expenses. Um, [27:10] so far that project is moving slower than than everybody had hoped. Uh, there's they met some big goals. The [27:16] furniture store is relocated. Um, but if they don't do it in time, we will not pay them. Period. [27:22] And then my last question, um, and this is probably a little bit more [27:28] complicated, um, but the process of the money going back to the county, and [27:35] you roughly said a third, a third, a third would come back. And so with that, [27:40] I had kind of two questions. one, if that money does come back, um, are the [27:48] restrictions of how it gets used different than what they are in the [27:53] SPARK program? Uh, yes, the restrictions are different. So, if we do return monies to the [28:00] county, um, we follow this the state law. So the monies go back to the county [28:05] treasurer and then the treasur follows the state law and returns them to the taxing agencies. They would be received [28:13] by us as a check made out to the city of Adina to use in an unrestricted fashion. [28:19] Well, it's unrestricted when it comes back. Yeah. So TIFF dollars are restricted restricted to infrastructure for the [28:25] most part, roads, bridges, private projects, parking, etc. Um, but if the monies are returned, we could use it for [28:32] anything within the city budget. Um, and that would be really a decision by you all as far as how to use those monies. [28:39] Okay. Thank you. Um, golly, that's a lot to that was those [28:46] are very good questions. Now I have all these follow-ups. Um, one thing you didn't mention is money going back to [28:52] the schools. Can you please review when there if the money goes back to the county for reallocation? [28:58] uh why that why you did not include the schools in that list. Sure. Um [29:04] so while the schools are one of the largest uh taxing agencies in our in our community um the way the state laws work [29:12] um when the monies are returned to the county um there's a brief period where the [29:17] money return where the county returns about a third to the school district [29:24] but then the next year the state recognizes that the school district got more money so the state holds back the [29:30] same amount from the school and retains it in the state budget. So, there is a a [29:35] one-year period where the monies are there, but then they're then they're removed. Um, I don't understand the [29:40] logic in all that other than that's how the state law works in Minnesota. Um, so if there are, let's call it excess [29:47] monies if we do return them. Um, the ultimate beneficiary um is the county, [29:53] the city, and the state, not the school district. Okay. Thank you for that clarification. [29:59] Um, any follow-up questions? Yes, Commissioner Risser, it would be really helpful if we could see how much money um is under pending [30:07] status and I can't remember how much was going to the Macy's site project. [30:15] Um sure, I uh I don't have the precise number, but the um the restaurant on [30:23] 50th Street, while it's under construction, they they're not finished yet. So, um, that was 225,000. [30:32] Okay. Um, the pledge to, uh, Enclave, I believe, is going to be [30:39] zero. Um, we had pledged the available monies because we thought [30:45] we had the deadline this year. We pledged them to to either the settings apartment or to enclave, whichever move [30:53] forward fastest. the setting is under construction so and they're incurring [30:59] costs. So I don't recall that any monies would be available for Enclave. I think we've invested them all at this point. [31:06] And with that streamlined grant program, I believe we have about $150,000 left, maybe a little bit less. [31:12] Okay. So not a lot to go back. Not not a lot. Can you elaborate more on that 4.8? I [31:18] I'm still confused about okay, that's going to come back at some point and [31:23] then it could go back to the county. Can you explain a little bit more how that process works and when that money would [31:30] become available to go back to the county? Sure, happy to address that. It's not [31:35] related to this request at all tonight, but um with the tiff district at 72nd [31:43] or 7200 France um uh we ple as a community we pledge the [31:50] use of spark in lie of tiff dollars to the apartment. So the tiff district [31:56] itself is going to run for 25 years I believe. Um, so those tax dollars will [32:03] still be collected. The property owner still has to pay their taxes. That doesn't go away. Um, but at at this [32:10] point, you know, the the taxes that they pay will be used to pay for other obligations in that area. We've made a [32:17] pledge to the to the rest of the site to to build out all the public spaces on [32:23] the rest of that site. uh we're considering some some type of improvement possibly uh to cross the [32:28] road whether it's a surface improvement and under the road over the road that's a possibility. So the actual you've [32:36] you've posited that the funds might be returned um I would um I guess I guess [32:42] my best estimate is the return of those funds could be considered in about 25 [32:49] years. Okay. So there's no potential for tax relief this year or anytime soon like 25 [32:56] a quarter of a century maybe. Okay, thank you. Yeah, correct. It's a those decisions [33:02] are in the future. Um I mean the they we've not even be yet begun to collect [33:08] tiff monies from that district. So we still have to collect them before we can [33:14] return anything. Okay. And if before the next meeting, and I know this is sort of tangential, but I think it is really key for people [33:20] to understand the way TIFF is being used. If we could have more information about the affordable apartment units [33:28] that we're getting in the setting, including the size, the number, all of that, that would be really great. [33:34] Thank you. Sure. We'll see what we can do. I believe that was all included in the planning commission packet and the city [33:40] council when the project was approved. Um, and there is the contract that binds the developer to build whatever was [33:46] approved, but we're happy to get that for you. Okay. Any other? Yes, Commissioner Agnu. [33:52] Okay. So, one one last question then because we are talking we've had a couple of questions about the [33:59] preliminary levy that we just approved last week or the week before time. Um, [34:05] so if we didn't move forward and there were the 900,000 [34:11] redistributed, one-third came to the city, would that or could that have any [34:17] impact on our preliminary levy for the 2026 calendar year or would that have to [34:24] be a 2027 impacting amount? I believe we would maybe there's a [34:30] two-part answer. Um, I believe the city would return would retain would see those funds in hand sometime late in [34:39] 2026. So, I don't know what that means for a budget modifications, but [34:44] So, right. So, it wouldn't we wouldn't be able to count on it when we're making a decision about setting that levy, but [34:51] we may be able to count on receiving it in 2026, certainly for 2027. [34:58] So, it would have no impact on the the levy that we approve for 2026. [35:04] It might cause there to be additional residual monies at the end of the year [35:10] that we could determine That's right. on how to allocate and potentially impact 2027, [35:15] but there would be no impact to the percentage that we're approving in the coming months. [35:20] Right. Because you you those those decisions aren't synced up very well. and the decision on final levy is going [35:26] to be made at either the first meeting in December or the second meeting in December. But either way, you're not [35:32] going to know the answer to the the big question before you have to make that decision. [35:37] And then let's assume well for this question, we approve this new spending [35:43] plan. We had the 900,000 to allocate towards other projects. What will be the [35:49] process for any of those projects that we're evaluating? I assume that they come back to us. We have a public [35:55] hearing. We continue to have that dialogue. But if you could walk through us again that process for any future [36:00] projects. Sure. Sure. Uh we're recommending that we use the same process that we have been using the last few years. So how it [36:08] uh typically has worked is either myself or other colleagues on staff will start [36:13] the conversation uh in response to the to the business request. um will vet [36:19] their application, review their actual need, review their project, make sure that it complies. Um for the streamlined [36:25] grant program, we've had our city attorney prepare um a template contract [36:30] that we use. So we try to keep that one simple. It's that's that's why we call it streamlined. Um so we use the same [36:36] template, fill in the blanks with a different project description, eligible expenses, um but then bring that back to [36:43] you for your formal consideration. uh and any any larger pledge um we we would [36:51] prepare a contract specifically for that project um to make sure that we're [36:57] covering all the bases and making sure that everyone's needs are met including the community's needs and again bring [37:02] that to you for your full consideration and remind me do we do a public hearing for those or no? [37:08] Uh no public the public hearing is required to approve the spending plan. [37:15] Um, but the approval of specific contracts does not require a public hearing. It simply requires that it [37:22] occur at a public meeting. Commissioner Pierce, just one request. So, um, assuming that [37:30] this goes forward when you present to council, um, and you you covered this in your [37:37] when you talk through it, um, but on the background slide three, um, we have [37:45] original total pledged is 9.5 million, but then you kind of spoke to what was [37:50] spent already. I just wouldn't I don't I'd like to see the the spent number. [37:57] Um, so that nobody gets the idea that we could if we did not approve this, we [38:04] would get $3 million back potentially from the county because this kind of says we've got 9 million pledged. [38:12] Sure. Happy to do that. So, but you did verbalize it. Just would like to see it on the slide. Thank you. [38:18] Thank you, Commissioner Risser. And I really appreciate what Commissioner Pierce just said and I think that really [38:25] is very confusing and um so anything you can do to clarify that that is not the [38:32] case would be much appreciated. The other thing I do really appreciate Commissioner Agnu's um question about [38:39] public hearings and tiff money and there aren't public hearings and I did just watch the I think it was um the June [38:46] 24th 2021 um H meeting where funds were allocated for the pedestrian bridge and [38:54] just seeing our process for spending tiff money. Uh I feel like our process [39:01] is not necessarily rigorous enough and it is very concerning to see just how [39:08] fast um monies can be allocated at a single meeting and there's pressure and there's time and in that case the [39:15] decision had to be made that day because the next day was the deadline um that [39:21] had to be met otherwise the money would have to be returned. So um I I really do [39:26] think as we move forward and I understand this is one ask but we really [39:32] need to review how we are investing tiff including the process and including you [39:38] know how projects get vetted um and including lack of public input because [39:43] that is very much something that is part of the tiff process. Um you can't you [39:48] don't have a public hearing when it comes to the actual tiff spending for the specific projects. Thank you. [39:55] So I'd like to just clarify those were excess tiff dollars and that's what we're talking about today or excess tiff [40:01] for creation of a tiff district and spending on a particular project. We have an extensive project pro process [40:07] where I believe it starts here and then it goes to the city count. We have do we have a public hearing even here or we do [40:12] we have two public hearings or and then there's also the planning commission. So we start here and then tell us the the [40:20] process for a tiff project. this these are excess tiff dollars but initially when we're creating the tiff and [40:26] deciding how to spend it what's the process sure the state law uh does mandate a [40:31] process that is confusing so it makes makes a lot of sense um that there's questions about it uh and while not [40:38] relevant to this resolution this morning uh when a tiff district is created and [40:44] the budget is created for that district there's a whole sequence of actions and events that happens uh visits to the [40:51] planning commission uh visit to the to this board, the H. Uh as public meetings, uh input in [40:59] community comment and other sources is always welcomed. Um but then a public [41:04] hearing is held at the city council. Um so we put it on the better together. We [41:10] invite comment online, on the telephone, via email, in person. Um, and then [41:16] through our through the city's typical protocol, we hold the public hearing, keep the public comment period open for [41:22] another week or two, depending on on the calendar, and then the city council makes that decision at a public meeting. [41:29] But there is one public hearing for the TIFF. Uh, and that is regarding the entire budget. [41:36] the the actual individual spending out of that TIFF budget then is still [41:41] brought to the HA and the city council at a public meeting but without a public hearing. So the the state protocol as [41:49] well as the city's protocol uh requires that all those activities happen at a public meeting but does not require an [41:57] an additional public hearing on every expenditure. Thank you. And then what we're talking [42:03] about today are funds that were collected in excess of the original plan. The state said we don't know the [42:11] impact of the shutdown related to COVID. We are going to give cities the opportunity to take these monies that [42:17] they have in tip districts and apply it to economic development so that uh the [42:23] impact felt to our economies based on the shutdown and the disruption of of [42:29] the co uh pandemic we would have extra money in order to stabilize our economy. [42:36] And so that's why it's very limited on what we can spend it on. And the question is whether we as a city want to [42:42] take advantage of this program that the city the state has given us and now [42:47] given us the opportunity to um extend. Is that correct? That's correct. And then today's vote isn't a final [42:54] vote. It's a vote to trigger a public hearing at the city council level. Correct. [43:00] That's also correct. Okay. So those are my questions. Any other comments from people? Okay. I will [43:07] entertain a motion to approve resolution 25-08 amending a spending plan for the [43:13] Southdale 2 Pentagon Park and Wooddale Valley View tax increment financing [43:18] districts. Do we have a motion to that effect? So moved. Second. Moved by Commissioner Agnu, second by [43:24] Commissioner Pierce. Any further discussion? All those in favor signify by saying I. [43:29] I. I. Those opposed? Nay. Okay, we It is passed. Thank you. And [43:35] then we've got another item. And is this under the executive director? Is it u Are you going to lead this, director, [43:41] Neil? It it is, but I'm deferring this one to Bill. And we've had a uh we've had a brief discussion about kind of toning [43:49] this down a little bit in terms of of what we're trying to accomplish today. And and I just want to let you know [43:54] that. Yes. Thank you. So, it's my understanding that we're going to have as a commission a work session on um how [44:03] we use to tax increment financing to achieve community goals. A big broad overall look at our policy. Um and but [44:11] today is we have anformational only kind of presentation and that the discussion will be in a work session at a further [44:18] date. Is that correct? That's correct. Yes. Okay. Well, then manager newendorf here we go with your next presentation. [44:24] All right. Uh so you may remember uh earlier this year uh we uh gave a little [44:30] warning that uh over the last several months in 2024 uh you collectively had [44:36] asked some questions about the use of tax increment financing and wanted an opportunity to discuss some of those [44:42] items. Um so in the spring we brought this back to you uh to try to schedule it get any additional questions. Um, so [44:48] what I'll do this morning is run through the questions that we've received and um don't have any final uh conclusions. Uh, [44:56] but we do have some options for you to to think about. Um, so I'll run through that this morning. Uh, happy to answer [45:03] any questions. Um, and we're also happy to schedule a discussion um, at a future [45:10] meeting wherever it fits into our calendar. So, none of these items are urgent or groundbreaking, but we want to [45:16] make sure that we're responsive to your questions. Um, and I've titled this discussion about how Adina has used tax [45:23] increment financing to achieve community goals. Uh, Adina has used uh tiff since [45:30] the early 1970s. We've delivered a lot of amazing improvements to the community [45:36] um for the community. Sometimes those projects are led by the city, sometimes they're led by private developers. [45:42] Depends on the times and the opportunity. Uh but we do keep the community interest in mind whenever we [45:48] use these. So this morning briefly, I'll go through our background. I'll go through our tiff policy that was most [45:55] updated a few years ago and then get into those five discussion topics. [46:00] Uh so currently Adina has a dozen different tax increment financing districts. They're scattered throughout [46:06] our community. Uh always in commercial or industrial areas. As a typical habit, [46:13] we really don't use tax increment in individual residential neighborhoods, but focus on those commercial and [46:18] industrial properties that see um uh more challenges. [46:23] Uh for many years, uh Adina operated with a very simple tiff policy. It was [46:29] uh less than less than a page, but it we're always guided by state law. That's that's the biggest, you know, the [46:35] biggest uh policy out there. It's mandatory. Um but I believe in 2010 or [46:40] 2011, Adina added our own tiff policy which basically just reiterated some of [46:46] those highlights of things we' done for the last 30 years, some of the best practices. In 2022, based on direction [46:53] from this group, uh we were uh uh advised to redo that policy to be a little bit more thoughtful, intentional, [47:00] and focused. So, in 2022, we completely rewrote the policy, [47:05] still retaining all of the best practices that we've always been using, but that TIFF policy expanded from half [47:12] a page to 11 pages. Um, and what we wanted, one of our go biggest goals there was to put down in writing some of [47:19] the things that we do on every single project because there's always questions. So, um, staff knows the [47:26] process we use, our adviserss and consultants know it, but we realize, you know, we never wrote it down. So, the [47:31] general community might have no idea of all the things we do. So, that's what's in that 2022 policy. [47:39] Um, the state law, um, frankly, is a little bit more generous when it comes to TIFF than the than how Adina has used [47:47] that. So, typically Adina puts, um, more constraints on the use of TIFF. um than [47:54] state law would allow. That's we've done that successfully and for intentional purposes. Um again, we're trying to re [48:02] we're trying to deliver outcomes to the community that that will benefit the community for decades and generations. [48:10] Um let's see. So that's the tiff policy. So the the five discussion questions uh [48:15] and I'll run through these and in fact I won't go won't go through them here but just get jump into the first one. uh is [48:22] city policy driving the need to use tiff more frequently? So in looking at our past several pro uh [48:30] TIFF funded projects uh there's a number of themes that that uh arise [48:37] um and these are hurdles that private developers see in their projects um and [48:43] these hurdles have gotten higher in since co um the cost of materials the availability of labor um taxes [48:51] regulations like they've gotten increasingly more difficult So uh in Adina we are [48:58] also stymied by the high cost of land. Um even a vacant property in Adina will [49:05] sell for millions. Other communities don't have that burden. Um but that is one of the [49:12] biggest challenges to development in Adina is getting the land and then getting it together at a price that's [49:18] manageable. Uh material costs, financing costs. Um, [49:25] right now the capital markets are very slow to finance big projects. Um, uh, if [49:30] you look around the metro area, you'll notice that there's not very many big cranes out on job sites these days. The [49:37] capital markets have really slowed down. We're experiencing that in Adina as well. And um you know I I will say that [49:45] we are blessed because we will have three tower cranes here and hopefully a fourth soon with an off two office [49:52] buildings and apartment um under construction in the last couple months [49:57] and more coming hopefully. Um but those capital markets are really delaying new projects. Also in Adina one of our [50:04] biggest challenges to uh to delivery is um the phase delivery on these large [50:11] properties. The Macy's furniture site is a great example. Um, [50:17] in order to build the last, there's four phases in that project as you might remember. In order to build the last [50:24] one, you've got to build the first three. In order to build the first one, you have to build all the infrastructure [50:29] and incur all the costs that won't actually be paid back until the fourth one is built in the future. And so, it [50:36] adds a huge financing burden to the developer. That's um again just kind of [50:42] the the challenge of of development these days. We also see hurdles in demolition costs of old buildings. [50:49] Sometimes some of the properties in Adina and elsewhere have environmental contamination. That's a big burden [50:56] costwise. Some of our sites, I'll pick on the Macy's furniture site, they don't [51:01] have modern utilities. They don't have modern amenities. Basic things like a sidewalk. Um and all those things cost [51:07] money. Um the the second biggest b hurdle today in [51:12] construction is the cost of structured parking. So especially in a commercial building [51:18] as a customer we typically expect and demand free parking. Um but the cost to [51:25] build a structured parking stall can easily get to $50,000 for one stall. [51:32] Where does that money come from? So I mean that's that's the challenge of the of the developer. There are two other [51:38] hurdles that are related to city policy. Um, and those are the last ones on the [51:44] list. There is a high cost of our regulatory compliance and our entitlement process here in Adina with [51:51] our zoning code. We do the multi-step, the sketch plan, the preliminary, the final, we do public hearings, multiple [51:58] of those. It can take months and months. That all costs a developer time, which [52:04] is money. So that is something it's a process we've created. We tend to like how that works. We like to scrutinize [52:11] the projects. It does add cost and risk to the project. Um, and then another [52:16] city policy that adds a lot of uh uh hurdle is our affordable housing policy [52:22] where we ask the developers to build a certain percentage of the units at the same price as every other unit they're [52:29] building and then rent it for half of that price or whatever the precise number is. So that puts a huge drag on [52:36] their project. But again, as a community, we've established a policy that says if the developer is going to [52:42] build luxury or market rate housing, we expect that people that are not luxury [52:48] apartment income can still live in our community. So, that's a choice we've made. Um, but I would say of all the 11 [52:56] major cost factors that are hindering development, um, the city is involved in [53:01] two of those. um we could change our policies, we could change our process [53:06] that would help the overall development picture, but it doesn't eliminate all those other nine hurdles that we have [53:13] zero control over. Um the second item [53:20] uh is regarding our process and I can condense that to a question of whether [53:26] or not there's a preferred order and timing when we consider the use of tiff. [53:32] So I've got a couple slides. I'm going to just start with start with one and then I'll I'll jump to the conclusion. [53:38] Uh but in the yellow box, a reminder that our current policy requires that [53:43] zoning consideration and financing consideration be kept in two separate [53:49] lanes. Um when as a city council or as a planning commission when they make a [53:55] decision about zoning, they're prohibited by state law to consider the financing implications of those zoning [54:03] decisions. So how we apply that here in Adina is to keep those two conversations [54:08] separate. Um so that uh uh just to prevent any shortcircuiting where a [54:15] comment is made in the zoning conversation about well I don't like the cost. I'm not going to approve the zoning. That's a good way to get the [54:22] city in some legal trouble. So we keep those two conversations separate and [54:27] we'd recommend that we continue those continue to keep those separate. But the timing um can certainly be um can [54:35] certainly be adjusted. The second thing that we do currently uh is the order of [54:40] the project is to have the preliminary zoning go first and if the preliminary zoning gets [54:47] approved, if there's actually a project to talk about, then we talk about the financing second. Um, [54:55] and we've we've chosen that process just out of a smart use of city resources. [55:02] Our thought process has been if a if a zoning request is too big or not enough [55:08] or, you know, doesn't pass muster from the zoning perspective, why spend weeks and months and thousands of dollars of [55:14] time on a financing request that might be moot. Um, so we've we've structured [55:21] the financing conversation after the zoning. Those are choices we made and those are [55:27] the choices we can change. So let me jump ahead to kind of a summary. So this [55:33] is our current process. When it comes to a development project, we first look at the sketch plan um through the planning [55:41] commission and the city council. Then it goes step 2A is the preliminary zoning [55:46] planning commission and city council. If that's successful, we jump to the HRA and talk about financing. We put [55:53] together a very detailed term sheet so that we know exactly what we're getting into. Um, and then step three is once [56:00] the developer knows that they've got their zoning, that they've got a an ability, a pathway for city financing to [56:06] help out f to help fill in their gaps, then they really go go beg and spend all [56:12] their money on the construction plans, the the site work, all the environmental. They get their full uh [56:18] financing packages together and then they come back to the city council for step 3A, which is to get that final [56:26] zoning um uh finished. And then usually the same meeting or maybe the next [56:31] meeting, we'll come in with 3B and do their full TIFF financing agreement. [56:36] That's our current process. If uh if we think there's a better way [56:41] to do it, this would be our suggested process. start with a sketch plan just [56:47] like we do today, but flip-flop the discussion of TIFF financing [56:54] with the preliminary zoning. Um what we currently do is as the project comes in [57:01] for zoning um I work handinand uh or Stephanie Hawinson depending on who's managing the [57:07] project will work handinand with Carrie and with the developer um because we [57:12] know that in our TIF policy we have certain expectations if we're going to use tiff we expect them to meet our [57:19] sustainable building policy we expect them to meet our affordable housing there's a whole number of other goals [57:25] and guidelines So if they're going to need TIFF, we make sure that they've satisfied all of [57:30] our goals. So while that's how it happens today, but we could certainly flip the order so that they come in a [57:37] sketch plan, they get some general direction, they seem that seems like it goes well. [57:43] We could come to the H first with a very rough um term sheet knowing that they've [57:50] got a financial gap. we wouldn't know what it is yet, but we knew that there'd be something. Um, the reason we don't [57:57] know the gap is they haven't gotten their zoning. So, maybe the zoning allows six stories or maybe it allows [58:02] four stories. We don't that can make a huge difference, but usually you're going to know when there's a gap. Um, [58:09] when the land cost is too high, when there's a lot of environmental impact, when the market costs are just through [58:14] the roof or financing costs. So, we can make some predictions, but they'd be rough. we wouldn't have the precise [58:20] numbers, but we could easily flip those conversations, come to H first and just [58:27] see, is there any interest? If there's no appetite, I'd recommend we tell that [58:32] to the developer upfront so they don't waste their time or our time, frankly. Um, if there is some interest, we'd want [58:39] to keep want to have them keep going. They would then go to step 2B and go through preliminary zoning. They then [58:45] they'd go through three 3A and the final zoning. and we'd still conclude with the last step and have the full tiff [58:51] agreement at the very end. The key difference in this process is that in [58:57] the beginning we would have to become become comfortable with approving a term [59:02] sheet that has a dollar amount that's a fill-in- thelank and a time period [59:08] that's a fill in the blank. We would fill all those in. I'm not saying we would not, but we would not know that [59:14] precise amount until the very end. Um, so that's that's a difference. And then [59:21] an alternative process, a way to really shake things up is to try to do it all at once. Start with our sketch plan and [59:28] then at preliminary zoning the same day, have the city council take action on the [59:35] TIFF financing and the zoning at the same meeting on the same day. They'd be [59:41] two separate motions. Um, it's possible. Um, I don't recommend this. It could be [59:48] a huge cost burden for the city, a huge cost burden for the developer, and it [59:53] might invite um the city council to interject financing decisions with zoning decisions, which are clearly [1:00:00] prohibited by state law. Um, so that'd be the alternative. Don't recommend it. Um, but we could easily flip-flop uh the [1:00:07] convers the timing of the conversations about the use of TIFF. Um, so something [1:00:12] to think about for future discussion. Um the third third question is about [1:00:19] Adina's budget pillars and our budget values. You recall most recently when we [1:00:24] considering considered selling property the old public works site we looked at those pillars and values. Um we could [1:00:32] and should also consider how those apply to the use of tiff. Um, I think this is [1:00:37] a deeper dive because at our budget pillars, it's looking at a strong uh [1:00:42] foundation for the community, reliable services, building a livable si city, [1:00:48] and doing it in a in a way that we're better together. Um, how you apply that to TIFF could be a whole another [1:00:54] workshop. Um, but as as staff puts together proposals and works with [1:01:01] developers, just so you know, we do look at those values. We look at those pillars again to achieve the goals as [1:01:08] have as have been defined in our plans, our policies and your direction. And the [1:01:14] same with our values about how we use those monies um for stewardship, you [1:01:19] know, we ask is tiff investment um is it best in a particular type of project? [1:01:25] Right now we use it for private and p public for housing and for residential [1:01:30] and for infrastructure. If you want to change any of that, we certainly could. Um, for equity, we want to look at how [1:01:37] how can TIFF investments be used to provide equitable outcomes for more people. Um, for health and in all [1:01:46] policies, we look at how tiff can be used to promote that overall well-being, [1:01:51] whether it's providing a sidewalk or providing a new social opportunity um or providing a new grocery store to get [1:01:57] healthier vegetables to people. Lot lots of different ways that tiff can trickle down. um to to our real real world. Um [1:02:05] but with the values and pillars, I wanted to just put this up here and start that conversation. We are trying [1:02:11] to incorporate these values and pillar pillars into more and more of our decision- making. Um uh so that's an [1:02:18] option for future discussion as well. The fourth question uh comes up [1:02:24] regarding the specific types of costs that this group is comfortable using [1:02:30] tiff for. In the last year or so, we've had a lot of conversations, right? A lot of discussions with this body or the [1:02:37] city council, and I've heard comments like, well, I like the project. I'm I can deal with TIFF, but I really don't [1:02:43] want to use it to pay for for this one discreet little item. And then someone else will say, I like the project. I can [1:02:51] somehow get comfortable with TIFF. In fact, I think TIFF is a good thing, but I really don't want to use it for that thing. Um, [1:02:59] we can certainly decide with your direction if we should exclude any of these costs. Um, I would just offer a [1:03:06] bit of caution in in that every project is different and unique. And so if you [1:03:11] set a policy saying we're never going to use it for parking, you might get a project the next month [1:03:19] that if parking isn't somehow addressed, it'll die. So just a word of caution there. We keep the flexibility for a [1:03:25] reason. Um the two additional policies that Adina does apply um are on the [1:03:32] right hand side here. Um the lefth hand box shows all the things all the [1:03:37] categories that the state law allows tiff to be used for. Uh on the right hand box, Adina's policy currently [1:03:44] exempts two of those things. Um we typically do not allow tiff to be used for private parking. If it's the [1:03:52] executive officers heated underground garage, they should probably pay for [1:03:58] that themselves. If it's on street parking for anybody that gets rainy and snowy, well, maybe we're comfortable [1:04:04] with that, but we we don't use tiff for private parking. And then when we do use tiff, we always equate it to the value [1:04:11] of the public benefits that are being delivered. And that's been a foundational element of of a dina's [1:04:16] policy since the 70s. That's something we really recommend we stick with. Um, [1:04:21] but over the next couple weeks or months, certainly, you know, feel free uh to think about, you know, are there [1:04:27] any costs we should exclude or change? It's it's our policy. We can modify it. [1:04:33] And then the last uh question comes from our our strategic use of TIFF. Um, [1:04:40] currently our TIFF policy is performance-based. So, we look at a project on a case-byase [1:04:47] basis. Everyone has been different. I've been here 14 years. Everyone has been [1:04:52] different. Um, so our our policy is written to be responsive to the needs of the project. [1:04:58] Um, but it makes it challenging. You know, when when when staff brings a presentation and proposal to this body [1:05:05] and the council, it can be a tough decision. There's a lot out there. You know, staff invests [1:05:11] dozens or hundreds of hours on some projects. So, we know it well. and then we ask you to make a decision in 90 [1:05:17] minutes um based on lots of input. So in the last year it was uh the topic [1:05:23] was brought up could we change that strategy to create tiff programs that [1:05:28] are well defined with specific guard rails and uh uh and goals. We certainly [1:05:35] could um I've seen that in other communities. I've done it in other communities. So some of the types of [1:05:41] programs we could could consider would be a specific program to use tiff for affordable housing. We could come up [1:05:48] with a specific program to use tiff for infrastructure, roads, bridges, retaining walls, pipes. [1:05:56] We could use we could come up with a tiff program to incentivize development of a particular site. if there's some [1:06:03] property in town that's just become a drag on the community, we could come up with a program for that. [1:06:10] Um, and then we I I would always suggest a tiff for other unique things because there's always things that don't fit in [1:06:16] a box, but we certainly could go through the effort to create pre-established [1:06:22] programs. The thinking is that staff and our adviserss could vet the applications [1:06:27] to make sure they comply with the program and bring it forward to you. Um, [1:06:34] uh, it sounds great in theory, doesn't it? If it could be that simple. Um, [1:06:40] a couple of the challenges and some of the negative consequences of that though, I would want to raise to your [1:06:45] attention. I mentioned I've been here 14 years. Every TIFF project project I've worked [1:06:51] on has been different and unique. It's hard to put them in a box. Nothing in a [1:06:56] dinina is replicable. All of our commercial properties are a different size, a different shape, a different [1:07:02] location with different problems and different opportunities. So that flexibility is a good thing. Um, so just [1:07:09] be cautious that if we bring a if we bring a proposal to you following a program, [1:07:16] nine out of 10 of them are probably going to say it complies with the program except for these two or three things. So just a bit of caution there. [1:07:24] Um, also when you create TIFF programs, in my experience, you get more TIFF applications. [1:07:30] When you declare, we're going to we've got a program. It's going to be TIFF for affordable housing, you're going to have [1:07:36] a lot of developers coming in to build the project. Um, and they're all going to ask for TIFF because we have a [1:07:42] program. Why would we not use it? Now, if there's a community goal that we want to push affordable housing, I just [1:07:49] picked the first one on the list. Maybe that's what we want. But if it's private development, just a caution, when I've [1:07:56] created predefined TIFF programs in the work in other communities, every developer that walks in the door finds a [1:08:03] way to meet those program rules and says, "Hey, you've got a program. I've checked all these eight boxes. Let's see [1:08:10] the contract." Um, so it takes away some of our our discretion. And it seems to be it illustrates the to the development [1:08:17] community that we are we want to participate whether they need it or not. We want to and I I don't know if that's [1:08:24] the message we want to send. Um and then in some of these programs I found um [1:08:31] we've had discussions about how much tiff is the right amount and as a [1:08:36] general rule someone once said 10%. No one can find out who said that or when [1:08:41] they said it, but we've heard that from a number of consultants and advisers. Um, if we come up with a rule that says [1:08:49] we're going to cap TIFF contributions out at 10%. Expect every application to come in here [1:08:55] at 9.9%. Whether they need 3% or 12%, they will [1:09:01] come to that. So, that can be some of the negative consequences of these programs. But that being said, there's [1:09:08] no wrong way to do this. There's the Adina way. So, uh, for the last 50 [1:09:13] years, we've used tax increment to fund a lot of amazing projects in town. [1:09:18] Centennial Lakes Park, Edinburghough Park, Grand View, 50th in France. On a number of occasions, we've used those in [1:09:25] those areas. So if there if there are higher priorities and if there are some programs that we should establish to [1:09:32] deliver what we want, we're happy to create those programs. Um and we'll figure out a way to make sure that [1:09:38] they're not gaming the system. Um but I just wanted to plant that seed and put that in your mind because uh TIFF can be [1:09:45] an amazing financing tool to deliver what the community wants. So if we want [1:09:50] to change our strategy, we're certainly open to that conversation. Those are our five questions that I've [1:09:58] received um over the last several months from you all. Um so uh happy to [1:10:03] entertain any questions. I know we can I just wanted to get this started. We can have a conversation in the future, but [1:10:08] are there any questions before I wrap it up? So I want to just kind of limit to clarifying questions this morning. I'd [1:10:14] like to have that discussion when our chair is here. So member Risser, you had a question. Um, can we include PUB and [1:10:21] the of zoning in this analysis? Because oftentimes there is a commitment made in [1:10:27] the PUD zoning that does, you know, carry financial costs for the developer [1:10:33] and there's the assumption that um that is part of the PUB agreement. And I [1:10:40] think what we're missing from our analysis is acknowledging the financial benefits a developer gets when say [1:10:47] they're able to go from like with Maison Green it was a twotory limit and a [1:10:52] four-story limit on that site and they got to go seven stories. So what is the value of that? And then what is the you [1:11:00] know what do we think we're getting for that? because then, you know, when we've seen this happen, we think we're getting [1:11:07] something then, oh, we need TIFF money and so PUB has to be a part of this [1:11:12] analysis and I know we're kind of running past time. Um, the other comment I wanted to make is I am very open to [1:11:20] taking another look at the the Grand View design guidelines and the costs or [1:11:25] excuse me, the greater Southdale area design guidelines and the cost that those impose on developers. And I do think, you know, that plan was a while [1:11:31] ago. It pretty much put a grid on top of the Southdale area. Um, it's expensive. [1:11:37] I question really the wisdom of dividing up our very few remaining larger lots. [1:11:43] So, there's there's a lot there that I think is problematic. Thank you. Any other Yes, Commissioner Agnu. [1:11:51] Uh, and yes, it was on this page. So, thank you. Um, so you mentioned that if we were to kind of flip the preliminary [1:11:58] zoning with the term sheet approval [1:12:04] that we would have some ambiguity in the exact numbers. Like talk me through how [1:12:11] exactly that would work. Would would we be looking at maybe a range without the final numbers or what would we actually [1:12:18] be approving? Because I don't think we could approve something that's like question mark, right? Yeah, sure. Happy to address [1:12:25] that. So, um, how I envision this is, um, well, the process is always [1:12:32] iterative. So, when there's a TIFF district, um, created, there's we always [1:12:38] create financial projections of the future taxes that are going going to be created. Um, if a developer is is in for [1:12:46] a request for either a four-story building or a six-story building, depends how zoning goes. I will ask our [1:12:52] adviser, run it both ways. What do the numbers look like? What happens if it's if it's at four? What happens if it's at [1:12:58] six? Um, uh, and what we can then create is a pretty good estimate of the number [1:13:05] of the amount of taxes collected based on that project. Um, and that's regular [1:13:11] taxes that go into everybody's general fund as well as the incremental taxes. So, we know what that maximum is going [1:13:18] to be. What I would do is put a not to exceed amount of like 90% of that. You [1:13:24] know, I always want to error on our side. We always do that. Um we don't want to error to benefit the developer. [1:13:30] We error to benefit the community. Um uh so while we would create a maximum [1:13:37] amount, it all depends on what happens at the zoning. Do they get the four stories or [1:13:42] do they do they get the six stories? Do they get the this density or that density? do they have to do a public [1:13:48] plaza or not? Um, so the actual commitment to them would be undefined, [1:13:54] but I I could see my staff report saying uh total amount not to exceed X for a [1:14:01] certain type of cost, public parking, public spaces, public plazas, affordable [1:14:07] housing, that kind that type of thing. So we would try to be as definitive as we could as far as the maximum dollar [1:14:14] amount and the types of expenses without having a precise amount in the early [1:14:20] days and hopefully that would be some good comfort and that that's helpful and I mean maybe [1:14:28] this can be a part of the discussion when we get further down but I'm just curious if if you'll even know enough at [1:14:33] that point to have the level of granularity that and not super granular but that we've [1:14:39] benefited from before of seeing here are the six components of the project that [1:14:45] are eligible for and are therefore contributing to this total dollar amount [1:14:50] because I know that that's what's led to some of the discussion of oh I don't want it for X or I don't want it for Y. [1:14:57] Um, so maybe just something to reflect on of like how much information would we [1:15:03] be able to have. Um, and maybe even coming if as we have a discussion coming forward with an example of like this is [1:15:10] how what we think we might know at that phase of the process or even having you [1:15:15] know a sidebyside of like we might come to you for step 2A and have two different options or two like uh two [1:15:23] different points that create the spread of the range. Um that might be helpful. [1:15:28] Thank you. All right. Uh Attorney Kendall. Madam Chair, I just wanted to make a quick comment about the interaction. Um [1:15:38] so the city council having approved a PUD zoning does not obligate the HA to [1:15:44] grant TIFF. In order to meet the but for test, they do have to come in on a TIFF application and indicate that the [1:15:50] project will not go forward but for TIFF. But that does not mean that the HA is required to approve that TIFF. You [1:15:58] can still have discretion to not approve that and then they can go back and look for more private financing or they can [1:16:04] ask for amendment to their zoning. But the fact that the city council has approved PUB zoning does not obligate or [1:16:11] require the HA to grant TIFF. And the reverse would also be true. So, however, [1:16:17] whatever order it's done, um, this body, whatever capacity you're acting in, just has to keep in mind that you have to [1:16:23] apply the standard for whatever application is in front of you. So, if you're looking at a PUD, you apply the standards for that. And if you're [1:16:29] looking at TIF, you apply the standards for that. And you shouldn't feel obligated to grant TIFF because you [1:16:35] approved a PUD as a city council. and vice versa, you shouldn't feel obligated to approve a PUD as a city council [1:16:41] because you've made any preliminary determinations on TIFF as the HR. So, um [1:16:48] I think that always needs to be kept in mind as you approve or review these [1:16:53] applications as two different bodies. Thank you very much. Thanks for that clarification. Um, I what I heard [1:17:00] Commissioner Risser say is that when we first heard about the South Deale guidelines in particular that it would [1:17:08] create so much new value um by using the PUD process and we've we have not been [1:17:14] getting um a quantification of the value created by using PUD and I think that's [1:17:20] what she's referencing not but and and thank you for that clarification. We they are two completely different [1:17:26] decisions. the use of TIFF and the use of of PUD, but um folklore or uh common [1:17:34] understanding is that PUD does create value for the developer and I believe [1:17:39] she's asking for is there a way to quantify what that value is. [1:17:44] Yeah. And we'll certainly give that some thought. we we would have that value conversation as a HR because again and [1:17:51] correct me if I'm wrong uh city attorney Kendall. Um but I don't believe financial considerations can be included [1:17:59] in your determination of whether or not to use PUD. So we'd have to have those conversations here. Um but we'll [1:18:05] certainly give that some some thought and see how we could address that. I think that's for our discussion as an HR [1:18:11] about the policy not about any particular um program or uh project [1:18:16] that's before us. That's my understanding member commissioner. Correct. Right. And the I think another [1:18:23] part of this is that we have such the tiff district is the PUD site is the [1:18:30] site plan of the developer. We're doing we're not doing things like Centennial Lakes or you know I mean we are in the [1:18:37] past when we referenced these really big projects or much larger projects that had public um benefit that was a very [1:18:45] different use of tiff than what we're seeing now where you know we're not talking about a tiff district for an [1:18:50] area of France Avenue we're talking about France TIFF one two three and [1:18:56] those are all individual de developer projects um that get puds zoning and get [1:19:03] tiff. And so, um, it's a very sticky situation, I think, in your comment [1:19:09] about, um, I agree with what you said about the greater Southdale area design guidelines and, you know, not really [1:19:16] seeing what we were expecting to see. Um, it's not coming forward the way like [1:19:22] Centennial Lakes did. But I think part of the problem and part of in terms of public transparency is really just [1:19:28] thinking about how much public benefit, you know, including the PUD benefit and [1:19:34] the TIFF do these individual development sites get um which may have been what [1:19:40] you were saying I was saying, but I just want to emphasize the point. We're these are small little tiff districts. So I [1:19:47] think what we want to do for purposes of our future discussion is have if there's [1:19:52] um a way to find quantity that we could attribute to using the PUD a financial [1:19:59] benefit that would be helpful. I think we want to look at it in the abstract. And um let's see are there any other [1:20:06] follow-up questions Commissioner Pierce? Okay. So do you have need any further clarification from us for setting up [1:20:13] this discussion that we're going to have? No, not at this time. I'll do some homework on the PUD. I I will address it. I'm not sure how yet, but give me a [1:20:19] couple weeks. We'll figure that one out. Okay. Terrific. Thank you. Um, so that concludes that. Our our executive [1:20:26] director stepped out for a second. Um, I will go to member comments and then we'll see if he has anything further. [1:20:32] Any comments? No. Nothing for me. Nothing from me. Okay. Member. [1:20:37] Nothing for me. Okay. Terrific. Well, um I I'm going to assume we don't have any other executive [1:20:43] director comments. So, I will entertain a motion to adjurnn. So, moved. [1:20:48] Second. Motion to adjourn by Commissioner Agnu, second by Commissioner Pierce. Any further discussion? All those [1:20:54] Maybe I'll just add I believe um manager Neil had another meeting that started at [1:21:00] 9. Okay. That presented. Yes. Thank you very much. I I appreciate that. Um so, with that, we will uh [1:21:07] adjourn the meeting. Thank you. At 8:54 a.m. [1:21:13] Sorry. Yeah. Uh, all those in favor of adjourning. I I All right. Any opposed? We are [1:21:20] adjourned at 8:54.