10-17-2022 Joint City Council and HRA Work SessionJOINT CITY COUNCIL AND HOUSING AND REDEVELOPMENT AUTHORITY WORK SESSION
RICHFIELD MUNICIPAL CENTER, BARTHOLOMEW ROOM
OCTOBER 17, 2022
6:00 PM
Call to order
1. Discuss opportunities to spend pooled tax increment within the community.
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at
least 96 hours in advance to the City Clerk at 612-861-9739.
AGENDA SECTION:Work Session Items
AGENDA ITEM #1.
STAFF RE P ORT NO. 25
WORK SESSION
10/17/2022
RE P O RT P RE PA RE D B Y: Melissa P oehlman, E xecutive D irector
D E PA RTME NT D IRE C TO R RE V IE W: Melissa P oehlman, E xecutive D irector
10/11/2022
O THE R D E PA RTM E NT RE V IE W:
C ITY MA NA G E R RE V IE W: K atie Rodriguez, C ity Manager
10/12/2022
I T E M F O R WO RK S E S S IO N:
Discuss opportunities to spend pooled tax increment within the community.
E X E C UT IV E S UM M ARY:
I n 2022, the Housing and Redevelopment Authority (HRA) approved the preparation of a Tax I ncrement
Management Review & Analysis report by HRA financial consultant Ehlers. The Management Report provides
a review of Tax I ncrement Financing (TI F) as a development tool, tax base impacts after decertification,
outstanding obligations, pooling, and more. I t also looks at all 13 active TI F Districts to assess opportunities,
challenges, and any compliance issues with those Districts. On September 19, Senior Municipal Advisor
Rebecca Kurtz presented the highlights of the Management Report to the HRA. The Executive Summary and
presentation are available for review on the HRA Agenda page of the City website.
Amongst the highlights discussed was the identification of a significant amount of pooled tax increment
(approximately $10 million) that is available to invest in the community in the next few years. There are three
separate statutory authorities under which the money can be spent; all with different timelines and authorized
uses. A preliminary plan to maximize the effectiveness of these monies was introduced to the HRA on
September 19. This work session is intended to allow for discussion of the preliminary plan and next steps,
with the inclusion of the Council.
D IRE C T I O N NE E D E D:
Confirm that the identified next steps align with policymaker expectations; and
Provide preliminary feedback regarding Spending Plan and Affordable Housing Trust Fund
priorities and guidelines.
B AC K G RO UND INF O RM AT I O N:
A.H IS TOR IC AL C ON T E X T
N/A
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
Minnesota State Statute 469.1763 Subd. 2(a) allows the HRA to retain a maximum of 25% of its
annual tax increment from its redevelopment TI F Districts and use it for other redevelopment
activities outside of the District's boundaries. This 25% maximum includes the amount retained for
administration.
I n 2021 the City obtained special legislation allowing the City and HRA to transfer 10% of
increment pooled for housing to an affordable housing trust fund. I n May of 2022, policymakers
modified the TI F plans of the Lyndale Gateway / I nterchange West, Urban Village, and City Bella
TI F Districts to allow for this transfer.
I n 2021 the State Legislature provided temporary authority to use unobligated TI F from existing
TI F Districts to help stimulate private development that would not otherwise occur without
assistance prior to December 31, 2025.
C.C R IT IC AL T IMIN G IS S U E S:
I n order to spend accumulated increment under either the temporary or special legislation, monies
must be authorized and/or transferred to the necessary funds.
Authority granted by the temporary legislation expires December 31, 2025. Only increment that is
not obligated as of December 31, 2022 (or within the following six months) may be spent. A
Spending Plan for money to be used under this authority must be adopted by December 31,
2022.
Special legislation allows the transfer of pooled TI F to the Affordable Housing Trust Fund (A HTF)
through December 31, 2026. There is no deadline to spend monies once in the A HTF.
Regular pooling must be spent prior to the decertification of the TI F District from which it is
generated. The TI F Districts in question expire in 2025 (Lyndale Gateway / I nterchange West &
Urban Village) and 2030 (City Bella).
D.F IN AN C IAL IMPAC T:
Approximately $10 million in pooled tax increment will be available over the next 8 years.
E.L E GAL C ON S ID E R AT ION:
See policies section.
ALTE R N AT IV E(S):
N/A
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
None
AT TAC H ME N T S:
D escription Type
P resentation P resentation
Pooled Tax Increment
Why we’re here
•Ehlers TIF Management Plan complete
•Significant pooled increment to spend
•Three tools - various limitations, timelines,
requirements
•Proposed next steps
TIF Management Plan
•Detailed analysis
•Obligations will be met
•Impact on market value +400%
•Approx. $10 million in pooled TIF
3 Pooling Options
•Special Legislation – Limited uses, longest
timeline.
•Temporary Legislation – Most flexible,
shortest timeline.
•Regular Pooling – Limited uses, medium-
term timeline.
Details
Temporary Leg. Special Leg. Regular Pooling
Alt. Name
Spending Plan Affordable Housing
Trust Fund (AHTF)
Housing & Redevelopment
Fund + Admin.
Timing ’22 Adopt Plan
’25 Spend
’26 Transfer to Fund
No deadline to spend
Spend prior to decertification
of contributing district
$ Limit No limit 10% 25% (incl. 10% Admin.)
Uses Spur
development &
create/retain
jobs
Development/rehab of
affordable housing.
Matching funds.
Acquisition, demo, site
improvements, infrastructure,
structured parking – blighted
sites
Next steps
•Transfer $750,000 to AHTF
•Adopt Spending Plan (Temporary
Legislation) for up to $6.4 million by
December 31, 2022
•Craft AHTF and Spending Plan guidelines
to articulate priorities
Spending Plan
•Based on Strategic Plan
–Vibrant downtown
–Increased tax base
–Maintain affordability
–Climate resilience
–Add’l goals of Comp Plan or other city plans
AHTF Priorities
•Further the goals of the Inclusionary Housing Policy (IHP):
–Larger bedroom sizes
–Deeper affordability
–Accessibility
•Plus:
–Leverage other funds
–Energy-efficiency
–Housing with supportive services
–Housing with resident subsidies
•Projects going above and beyond the IHP and Housing TIF District requirements.
Requested Feedback
•Does proposal for pooled money make
sense?
•Discuss draft AHTF and Spending Plan
guidelines.