by Steve Timmer

Mar 1, 2016, 10:30 AM

The answer is a TIF

Here’s the question: If you take a student from every grade in the Edina Public Schools and lay them end to end, and then you do it again, what do you get?

Well, you get a TIF. That’s how long a TIF at Grandview would last.

Perhaps obviously, I am just talking to my Edina peeps here. I have written before, here and here and here (the last about a TIF at Grandview, specifically), about what I think is the extravagant use of tax increment financing in the City of Edina. But listen up, my friends, because TIFs are an issue beyond Edina.

There is a city council meeting on Wednesday, March 2nd at seven P.M. at city hall to consider a TIF for the Grandview site; I know I am late to the party in discussing this, for which I apologize.

By way of the briefest background: the City of Edina constructed a new public works site on the south edge of the city; it needed a new and larger facility, of that there is no doubt. The facilities on the old site have been knocked down in anticipation of redevelopment.

Since the property is presently owned by the city, its assessed value is zero. (More on this later.) It is clearly a desirable property, well located near 50th Street and Highway 100, near a rail line (that might, at some point, be available for public transit). At public meetings about redevelopment of the site, a stunning number of developer representatives are in attendance, finning like koi in the soft current. The Grandview public works site is a lynch pin in the redevelopment of the area as envisioned by the city’s planning and economic development departments.

These same people will advance the idea that the property is “blighted.”

And therefore in need of a giant public subsidy to make something happen on the site.

Which is baloney, of course.

But the answer, according to city staff, is a TIF for the Grandview site. By declaring the property a TIF, all of the incremental real estate taxes payable because of increased assessed valuation due to development will not flow into the coffers of the taxing authority that levied the tax: the county, the school board, the metro rail authority, the mosquito control people, the Minnehaha Creek Watershed District — well, you’re getting the picture — or even the city itself.

These “incremental taxes” will instead flow into the Edina Housing and Redevelopment Authority. From there, that tax money will go back into the pockets of the developer, be used to pay for infrastructure projects that would probably have been assessed to the developer, and perhaps for use elsewhere around town.

By way of example of the latter, the new parking ramp signs around the 50th and France area were paid for by the Centennial Lakes TIF. The Edina HRA controls the TIF, but part of the property at Centennial Lakes lies within the Richfield School District.

But back to Grandview. The spiffy thing about a TIF at Grandview is that there is another word for the incremental taxes: all of them.

The city’s staff considers this a feature, not a bug. In an informational meeting about plans for Grandview several months ago, the city’s economic development director waxed eloquent about the current zero tax assessment and said that all of the taxes would be “free money.” I am not making that up.

Currently, plans for Grandview may include up to 322 units of housing. Obviously, 322 units worth of people are going to demand municipal service: police, fire, emergency medical, streets, sewer, and very importantly, schools. But the project won’t contribute anything (or next to nothing) for the cost of these services.

Seems like freeloading to me. And it kind of seems that way to the Edina School Board, too, which penned a letter of objection to the TIF.

Which brings us back to our school children laid end to end. Essentially, two generations of kids from the housing built on the Grandview site will attend Edina public schools while the taxes levied by the school district on the property go instead to the HRA, and back to the developer.

How do you like them apples?

The TIF plan says that it has zero impact on the school district. But all of the kids in the development are an impact; they’ll have an obvious effect on the school’s facility needs. And if the development doesn’t pay its way, who will pick up the tab?

Guess.

The TIF proposal for Grandview is playing Sim City with other people’s money.

The city could play Sim City with its money only; it is possible to agree to abate only the city’s; it wouldn’t be a TIF. If the project is so desirable, that’s what the council members should do; then they can take all of the credit for the project.