A new tax increment financing (TIF) district for the Snelling-Midway redevelopment site is moving ahead, with hopes it will spur affordable housing and redevelopment by Allianz Field.
On Nov. 3, the St. Paul City Council approved establishment of the renovation and renewal TIF district, following an Oct.28 vote of approval as the Housing and Redevelopment Authority (HRA) Board.
Council members expressed support for the TIF district, with Dai Thao and Mitra Jalali praising the inclusion of affordable housing and potential to spur more development along University Ave. and Green Line light rail.
TIF will support redevelopment of the “superblock” bounded by Pascal Street and St. Anthony, Snelling and University avenues. A master plan for the site, which won city council approval in August 2016, calls for 620 dwelling units, one million square feet of office space, 421,100 square feet of retail space and 4,720 parking spaces. But Bill McGuire of Minnesota United FC has cautioned that those plans would be revised with a changing economy. He and Rick Birdoff of RK Midway are leading redevelopment efforts on the block, through a development partnership, Snelling-Midway Redevelopment, LLC
An HRA staff report indicates that site redevelopment could include 800,000 square feet of office space, approximately 399,250 square feet of retail, approximately 400 hotel rooms, approximately 3,350 stalls of structured parking, and approximately 620 housing units. For the housing unit, there is a planned goal of 30 percent of units to be income-restricted. Thirty percent of housing units would be affordable to households earning 60 percent or less of area median income, with at least one-third of units affordable to households earning not more than 50 percent AMI, and one third affordable to households earning 30 percent AMI.
The taxable base value for the TIF district is estimated at $28 million. Increments will start being collected in 2024.
It’s assumed the site will have $485 million of market value by the end of 2032, generating annual tax increment of $8.78 million. Over 16 years that will generate $112 million. A gap is anticipated, according to the city staff report.
That will be used to help cover an estimated $115 million in costs including public improvements and affordable housing.
The goal is for construction to start in 2021, with buildout complete by the end of 2030.
The potential redevelopment impacts and mitigation steps are outlined in an alternative urban areawide review (AUAR). The AUAR also won approval in 2016 and is due to be updated in 2021.
Nicolle Goodman, director of the St. Paul Department of Planning and Economic Development (PED), said the actions are a statutorily required step in a process that began in 2017, when initial steps were taken to set up a TIF district. Council members had to act by Nov. 13 to preserve the ability to use TIF at Snelling-Midway and meet a state-mandated deadline.
“This action is needed to meet a deadline and preserve a tool for possible use,” Goodman said.
Goodman emphasized that the council action isn’t a commitment to TIF assistance for any developer or project. Applications for TIF uses have to come in in the future.
The council and HRA in June approved a demolition and development agreement with Snelling-Midway Redevelopment, LLC. Findings were made to determine that the remaining section of Midway Center and the former Big Top Liquors buildings are substandard. Both were extensively damaged by fire in May, in the wake of civil unrest tied to the death of George Floyd.
The council in 2017 took similar action to determine that part of Midway Center, including the Rainbow Foods site, and the original Big Top Liquors building were substandard and should come down to make way for Allianz Field. The timing of that initial round of building demolitions started a three-year clock ticking and triggers the upcoming Nov. 13 deadline.