The redevelopment project has been in discussions for nearly two years and includes three separate legal contracts. Economic Development Manager Bill Neindorf presented the project as a vital opportunity for revitalizing the area, highlighting the financial gap that necessitated the city’s involvement through TIF and the use of SPARK funds. These funds, derived from already collected tax dollars, have a looming expiration date, making their timely use essential.

Neindorf emphasized the public benefits expected from the project, such as a tenfold increase in annual tax revenue and significant improvements in the site’s market value. The project also anticipates generating $2.8 million in park dedication fees, $1.9 million for sewer improvements, and $1.6 million for water system enhancements. A point of contention arose regarding the park maintenance agreement, which would require the developer to contribute $80,000 annually for maintaining Centennial Lakes Park.

The proposed site plan includes publicly accessible outdoor spaces, new roads, sidewalks, and bike trails, with provisions for maintaining public art and a potential pedestrian crossing to connect nearby neighborhoods. The project promises a mix of rental and ownership housing, aligning with the area’s broader housing strategy. Sustainable building practices are a key feature, with plans for rooftop solar installations and on-site stormwater management, with several buildings aiming for LEED certification.

Another topic was the financial structure involving TIF and SPARK funds. The project cost has risen to approximately $309 million, yet the TIF contribution remains at about $22.87 million. Without TIF, the developer faces a projected return of around 5.6%, deemed unattractive to investors, but TIF involvement could raise the return to a market-level cap of 7.1%.

The SPARK funds, primarily collected from the Southdale 2 District, must be utilized by late 2025. The city plans to use about $1.5 million in SPARK funds for the project, structured as a forgivable loan agreement during construction. This setup mitigates the risk of losing funds if the project fails but does not grant the city an equity interest.

Questions surrounding the city’s equity interest in the project were clarified, noting that state laws restrict the flexibility of SPARK funds. Forgivable loans were favored to avoid administrative burdens associated with traditional loans.

The meeting also addressed the project’s community-focused aspects, particularly the Northwest building’s public spaces. Discussions centered on ensuring these spaces are open and engaging for the community. The developer, represented by Patrick Brahma, responded with design adjustments to expand public access, though specifics on programming remain under consideration.

Further, the HRA approved the motion to establish the 72nd France number three TIF district, aligning with the broader redevelopment strategy. A related agenda item involved a site on France Avenue South, where the authority considered financing issues and a loan agreement. A proposal was made to deviate from the affordable housing policy, allowing for 8% of units to be designated as affordable indefinitely, rather than the typical 10% or 15% for a limited duration, resulting in 12 permanently affordable units.

The project on France involves 150 apartment units, with 12 affordable units planned to meet various housing policies and city sustainability goals. The financing request included a $3.8 million forgivable SPARK loan, representing a portion of the $55 million project budget, with discussions emphasizing the necessity of public investment for affordable housing and infrastructure improvements.

Additionally, the feasibility of constructing an underpass was confirmed, addressing safety and comfort for users, though financial considerations remain. The upcoming city council meeting will address these findings further.