In 2025, Edina’s HRA approved financing a down payment assistance program, the Hero’s Program, with $1 million of unspent Tax Increment Financing (TIF) revenue from the Southdale 2 TIF district. For people unfamiliar with TIF this might not appear to be a big deal. It is to me because these funds could have been returned to Hennepin County for redistribution to the county, city, and school district; each taxing authority would have received roughly 1/3, about $330,000. TIF money returned to cities goes into the general fund where it can cover expenses or be set aside to help keep the levy down.

Historically, TIF has been used for economic development. The Minnesota House of Representatives Research Department provides basic statement about how TIF can be used. https://www.house.mn.gov/hrd/issinfo/tif/mech.aspx

Tax increment financing (TIF) is a method of financing real estate development costs — i.e.:

• to encourage developers to construct buildings or other private improvements, or

• to pay for public improvements, such as streets, sidewalks, sewer and water, and similar improvements

Providing down payment assistance so people can purchase existing homes really isn’t real estate development. I have tried to find other examples of Edina using TIF funds this way. It’s possible this is the first time Edina has invested TIF for a program that does not result in construction.

Edina’s Hero’s Program provides up to $100,000 of downpayment assistance to individuals who can earn up to $106,000 for purchasing an Edina home valued $600,000 or less. To qualify, people must work in Edina — not all jobs qualify. Applicants can be teachers, educators, professors, special education, assistants, counselors, childcare, librarians, school food service workers, school custodians and administrators. Edina Law enforcement, Fire Department staff and other public employees can also apply.

No need to live in Edina, or even Hennepin County.

Work at a restaurant, store, or movie theater? You’re out of luck.

With steep Federal cuts to rental assistance programs, it’s appropriate to ask how many people the county could have helped with $330,000 flowing back into its coffers for that need. There are a lot of people in Edina who are on tight budgets, people who don’t have 6-figure annual incomes and are trying to make ends meet.

Investing TIF dollars in the Hero’s Program also seems at odds with Edina’s Tax Increment Financing policy. The first item under “Purpose of Policy” is: “Limit the use of TIF to only projects that deliver permanent benefits to the general public that are better than the minimum established in City Code.” It’s possible the Hero’s Program helps as few as 10 people. Hardly seems like the general public is benefitting.

https://www.edinamn.gov/DocumentCenter/View/770/Edina-Tax-Increment-Financing-TIF-Policy-PDF

So why was this TIF investment allowed?

It comes down to the word “assist” and changes the state legislature made back in 2021 to state statute Section 469.1763, subdivision 2, paragraph (d), clause (5). Specifically, “…the expenditures must:…(5) [be used] to assist owner-occupied housing that meets the requirements of section 469.1761, subdivision 2.” And here “assist” can be viewed as a broad term that is not limited to building and renovations even though it is TIF financed. Assist can mean down payment assistance programs.

As for whether this use contradicts Edina’s TIF policy, the policy includes a lot of verbiage along the lines of TIF having to deliver public benefits or benefits to the general public. But on page 10, there’s item 8: Deviations from Policy. “The City reserves the right to approve or reject the use of TIF, the amount of TIF, and the total term, on a case by case basis, taking into consideration established policies, project criteria, and demand on services in relation to the potential benefits from the project. Deviations from this policy shall be allowed if specifically approved by the City Council or HRA.” And so here we are, there is HRA support.

I was the lone vote against the Hero’s Program. The Heros Program received an enthusiastic response from the majority of HRA commissioners, and it will be interesting to see what new programs financed with more unspent TIF from the Southdale 2 district get passed in 2026. It will also be interesting to find out who gets to benefit, who pays for it, and how much more unspent TIF does not flow back to the county for redistribution.

I understand the need, but this is a program that should be financed by private donations, not public funds.

— Julie Risser is an Edina City Council member