Edina Officials Weigh Financing Risks for 701 France Avenue Redevelopment
The Edina City Council and planning officials met in late June to discuss the future of the 701 France Avenue project, focusing on how to best facilitate affordable housing and commercial development at the prominent 70th and France intersection. As the city evaluates its involvement in the redevelopment, members are navigating a complex landscape of lease structures and financial liabilities.
The discussion centered on whether the city should adopt a lease structure to support the project, which aims to bring new life to the site near the Galleria. While proponents argue that creative financing is necessary to make the development feasible, others have expressed concerns regarding the city's exposure to long-term fiscal risk.
If we're going to continue to be involved, we have to get more creative. And the challenge there is being creative without bearing any undue risk.
Balancing Development Goals and Municipal Risk
Mortenson representative Dan Leser addressed the council regarding the mechanics of the proposed lease, noting that the structure differs significantly from traditional debt issuance. He emphasized that the proposed model relies on contingent liability rather than a direct general obligation for the city, attempting to provide a buffer for taxpayers.
This lease structure is not viewed the same as a bond issuance... It's really a contingent liability versus a direct general obligation.
However, the proposal faced skepticism from some commissioners, who questioned the necessity of including a parking ramp as a key component of the development. The conversation also touched upon the broader impact of city design guidelines on developers’ ability to adhere to zoning codes, with some suggesting that current policies may be creating unintended hurdles for new housing projects.
I feel like what we're doing is because of our greater Southdale area design guidelines, we're forcing developers to come up with projects that perhaps violate our code and are possibly non-compliant.
The 701 France Avenue site is located near notable local developments, including the 7250 France (The Craftsman) office project. The council has provided direction for further study, as no formal vote was taken during the meeting to move forward with the current financing strategy.
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Votes (1)
701 France Avenue Project Update and Financing Strategy
Dissent: Commissioners Risser and Agnu voiced strong opposition to the proposed lease structure.
Moved by None [N/A] · Seconded by None [N/A]
The HRA discussed a complex Lease Revenue structure where a third-party non-profit would issue tax-exempt bonds to build parking. Commissioners expressed concern over risk, the city's eventual ownership of a parking ramp, and the viability of high-rise residential versus hospitality or office uses on Site A. Dissent focused on whether the city should be in the 'parking business.'
Notable Quotes (4)
If we're going to continue to be involved, we have to get more creative. And the challenge there is being creative without bearing any undue risk.
This lease structure is not viewed the same as a bond issuance... It's really a contingent liability versus a direct general obligation.
What we get out of this is a parking ramp and I don't know that I want that. I'm open to other creative solutions... but I don't love this creative solution.
I feel like what we're doing is because of our greater Southdale area design guidelines, we're forcing developers to come up with projects that perhaps violate our code and are possibly non-compliant.
Ordinances & Resolutions (4)
Policy document cited by Commissioner Risser as potentially forcing non-compliant or infeasible development requirements.
The city's overarching development vision that the 701 France project aims to satisfy.
The existing tax increment financing agreement that currently governs the project site.
Area-specific plan focused on density and landmark development at key intersections.
Source document
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Other Topics from This Document
701 France Avenue Project Financing Update
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