Tax Increment Financing (TIF) Request
Robbinsdale Economic Development Authority (REDA) adopted a Developer Fee Policy in 2014.
The Preliminary Plan Review provides the opportunity for a developer to explore the potential viability of a site prior to asking for REDA assistance. Kent Carlson submitted a $10,000 deposit on December 16, 2015 to cover the estimated cost of exploring the potential viability of the Terrace Mall site. This included paying for third party services - LHB for review of the eligibility of the site as a Redevelopment TIF district (including documentation of the condition of existing buildings) and Ehlers to provide financial analysis.
In late June 2016, Inland Development submitted a second $10,000 Development Fee deposit to cover the anticipated costs of preparation of a tax increment financing plan and development contract. On July 5, 2016, REDA adopted a resolution authorizing preparation of documents and scheduling meetings related to review of a TIF proposal. Draft Redevelopment Area do TIF Plan documents were delivered to the Hennepin County Board and ISD 281 on July 22nd as required by law. The building condition photos from the draft report are included on this webpage and were also displayed at the developers open house on July 13.
REDA adopted the Redevelopment Plan, TIF Plan and (Report determining Qualifications for Redevelopment TIF District (Blight Analysis report) at their August 10, 2016 meeting. Links to all of these documents are provided on this page. There will also be consideration of a Development TIF Agreement covering pay-as-you-go TIF at a future meeting.
The City Council held a public hearing and adopted the Redevelopment Plan and TIF Plan at a special meeting on August 23, 2016. Links to the staff report and attachment are shown on this page.
Tax Increment Financing is a financing tool authorized by the State of Minnesota where essentially the difference between the property taxes that are currently paid by the property owner and those paid by the property owner after redevelopment can be used to reimburse the costs of redeveloping the site. Those property taxes generated only exist because of the redevelopment. The city, county and school district will continue to use the current tax capacity for calculating the taxes from the property. Click this link for more information on Redevelopment TIF Districts.
The tax increment financing is being considered on a Pay-as-you-go basis, which means that instead of the city providing the money in advance, the funds generated by those extra property tax payments (tax increments) are available to reimburse the developer for certain costs incurred to make the property ready for development. There is no guarantee that the tax increments will come in at any certain amount. The developer is required to meet certain conditions on an on-going basis or the district will be terminated and no additional payments would be available whether the development costs have been repaid or not. If the project defaults - such failing to pay taxes or going out of business, the tax increment district ends and there is no guarantee on a different source of funds from the City or REDA in order to repay the privately financed TIF note.
On December 13, 2016, REDA approved the Development Agreement with Hy-Vee subject to the requirement that final site plan and elevation must be approved by REDA prior to issuance of building permits. More information on this action and next steps can be found on the Hy-Vee Development page