As, H in: 7 ADWINISTRATNE OFFICES WY 5701 Nermandsle Road Edina, MN $5424 (282) 48.9900 DEFINING EXCELLENCE worwedina ki2m.us February 29, 2016, Via Email and Regular Mail Mayor Jim Hovlend and City Council Members. Ciy of Edina 4801 West 50° Steet Edina, MN 55424 Re: Response to the City of Edina’s Proposed Modification to the Redevelopment Plan for the Southeast Edina Redevelopment Project Area and the Tax Increment Financing Plan for the establishment of the Grandview 2 Redevelopment Tax Increment Financing District Dear Mayor Hovland and Council Members: Thank you for providing the daft TIF Pian fr the proposed Modification tothe Redevelopment Plan forthe Southeast Ecina Redevelopment Project Area and the Tax Increment Financing Pin fr tho establishment ofthe Grandview 2 Redevelopment Tax increment Financing Distict dated February 1, 2016, The Edina Pubic Schools’ School Board met ina work session on February 22% to leem more about tax increment financing (TIF) districts from our consultants at Springsted Finance. The schoo! bard did discuss the proposal based on the share information from consultants, 2s well as concems the schoo! boat had received from the community regarding TIF distrets. The ‘school board is concemed thet approval ofthe TIF Plan as proposed will negatively impact local financial support for Edina Publ Schools, and request thatthe Plan be amended as outined below. Following the school board members’ review ofthe draft TIF Pai and accompanying information, some questions hhave arisen that require both consideration and the need fo aitonal information. We understand the document that was provided fous was in dra format and many ofthe development details have not yel been finalized, The school board would appreciate the opportunity to be updated es addtional deals onthe planned development activities become availabe, so that we can maintain a better understanding a to the probable impacto the schoo! distct as result ofthe establishment ofthe proposed TIF Distt. \We want to emphasize thatthe school dstict leadership values our working relationship wit the City of Edna, and the schoo! board recognizes the decision to estabish a TIF Distict is withthe City. We ask thatthe City address the following concems: '* Although the school board recognizes a TIF district does not directly impact the amount of the schoo! district's local revenue, it does increase voter reservation to approve school district referenda. Referendum funding is critical to the school district's ability to provide excellent education and to adequately fund student learner needs. + Underestimation of property values and decreasing the growth ofthe tex base resutn current taxpayers paying a higher tax rate than if development were fo occur either without the use ofa TIF district or a more scaled down TIF cstrict. ‘© Potential increase in residential enrollment in the schoo! cistrit's boundartes has a direct impact on the capacity of the school district's factities. Additional questions and conoemns include: Subsection 2-7 Duration and First Year of Tax increment of the District ‘The school board understands from the draft Pian that the Cty is electing to delay receipt of increment upto four years as allowed by statute, with fist increment collected in 2020, We also understand from both tis section and the WE GARE ¥ WE DARE ¥ WE SHAREj i ‘assumptions in the cash flow exhibits thatthe projections are based on the maximum term of a redevelopment district (of 25 years of increment after first receit (26 years total), and thatthe City intends to have the TIF District remain ‘open forthe full term, Reduced property value for two or more decades of pupils going through the system is detrimental to schoo! district fnancing. We have concerns regarding the TIF District remaining open the maximum term, and ask the City to consider a reduced term. Subsection 2-10 _Uses of Funds ‘The school board would Ike more information on the planned development actives as proposed in the TIF Distr. ‘The plan mentions 322 units of planned housing. Additional information regarding the specific type of housing would be helpful for school district leadership understanding as we plan for our future budget needs and any potential implications resutting from the TIF District, We would also ike to have a better understanding ofthe timing for development. Knowing thatthe planned build out is 2-6 years out (per the draft plan), schoo! district leadership ‘would lke to be updated as information becomes known regarding specific development actives and timing for development, all predicated on the assumption that the TIF Distct pian is approved and TIF Districts established ‘with the projects moving forward. Uubsection 2-14 Estimated Impact. ‘Taxing Jurisdiction ‘This section of the TIF District plan states that the estimated impact to the school district would be $0 upon creation ‘of the TIF District. Given the interest in the impacted area and the length of the TIF District, the school board feels the creation of the TIF Distict would have a negative impact on the school districl. We would ask that adtitional consideration be made regarding what the imoact to the school district (and other taxing jurisdictions) would bo as a result of the TIF District. We understand this statement is ultimately based on the but-for finding that the development would not proceed as proposed without establishment ofthe TIF District. However, we may be able to ‘assume that some development will occur on the project site over 25+ years which could generate some positive growth to the school district without establishment ofthe TIF District. Utimately, the school district's tax capacity and ‘ax capacity rate are impacted by the TIF District. Appendix D Estimated Cash Flow for the Distt Under the base value assumptions fr the TIF District, the estimated valuepurchase price of school-owned properties is listed as $531,342, The school board understands from the Plan this is based on a land value estimate of $7/SF. However, we received a resticted appraisal report which placed the value on the property at approximately $4.0. We would lke some assurance as to what the antcpated taxable value for the school-ovned property would be, as we understand ths wil be included as the original net tax capacity ofthe district, and be taxes realized by the schoo! district (and other taxing jurisdictions) upon the reclassification as taxable when development occurs, ‘Thank you for your consideration of these concems. We appreciate your awareness of our concerns in your decision-making process and look forward to your response to the concams addressed. We value our partnership and shared goals of pursuing excellence in our public schools and community. (On behalf ofthe Edina Public Schools’ Schoo! Board, (for lth — Lony K. Wallen-Friedman Schoo! Board Chair ce: Nick Anhut, Municipal Advisor Scott Neal, City of Edina Ric Dressen, Edina Public Schools Margo Bauck, Edina Public Schools REACHING NATIONALLY ® TEACHING PERSONALLY