Tax Increment Financing

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Tax increment financing (TIF) is a financing tool cities may use to capture most of the increased local property tax revenues from new development within a defined geographic area, for a specified time period, to pay for qualifying costs that enable the development to occur. These revenues may be used for specified public purposes such as affordable housing, redeveloping blighted properties, remediating contamination, and constructing public infrastructure as well as creating employment opportunities. The purpose of tax increment financing is to facilitate certain types of development or redevelopment that would not normally occur without this financial assistance.

St. Louis Park has used TIF to initiate community improvements since the 1970s. Large-scale, mixed-use projects, such as Excelsior & Grand, The West End and the 36th Street commercial district would not have been possible without the use of TIF.

How does TIF work?

To receive TIF assistance, a developer must first complete the city’s TIF application process. After review and a finding that the proposed development meets the city’s policy requirements, the St. Louis Park Economic Development Authority may enter into a private development contract with the developer and establish a TIF district (development area).

When a TIF district is created, a base assessed property value is established for the properties within the district. This value is reflective of the current property value (vacant land, land with structures, etc.), not the value after development is complete.

The developer will continue to pay the property taxes assessed against the related properties. As the development moves forward and the assessed value increases, the property taxes increase. The revenue from the increased property taxes is collected by the city and used toward certain qualified redevelopment costs associated with the redevelopment project. The other taxing authorities will continue to receive property tax payments, but these payments will be based on the district’s base property value.

The TIF district is closed after the project is completed and financial obligations are met. All taxing authorities (city, county, school district, etc.) will now benefit from the increased property taxes generated from the improved property’s new, higher property valuation.

Uses and benefits of TIF

TIF is used in St. Louis Park to:

Provide funding for public infrastructure improvements without increasing the tax levy.
Deliver affordably priced housing not provided by the private market.
Redevelop sites in a way that increases the tax base and delivers public improvements and benefits that would not otherwise be provided by the private market.
Attract investment that creates employment, grows the local economy and enhances the community.
Facilitate the environmental cleanup of contaminated and blighted sites.

Rules for TIF

TIF districts and the use of TIF is governed by Minnesota State Law.

The City of St. Louis Park considers utilizing TIF to assist redevelopment and housing projects consistent with the city’s TIF policy and the city’s strategic priorities and economic development goals. These priorities and goals include facilitating projects that:

Foster racial equity and inclusion to create a more just and inclusive community for all.
Help achieve the city’s Climate Action Plan goals.
Providing a broad range of housing and neighborhood-oriented development.
Providing a variety of options for people to make their way around the city comfortably, safely and reliably.
Creating opportunities to build social capital through community engagement.
Enhance the overall livability and economic vitality of the community.
Foster the expansion, redevelopment and revitalization of the city’s business areas through environmentally sustainable projects.
Retain and foster the growth of the city’s existing high-quality businesses.
Assist the startup, growth, diversification and expansion of the city’s small businesses.
Recruit new businesses that are compatible with and complementary to the city’s existing businesses.

Information for developers

The city will consider TIF requests for projects that satisfy city goals and comply with city policies. The city’s economic development authority will consider whether or not to provide local funding.

How to apply

To apply for tax increment financing assistance, complete the TIF application.

There is a $3,100 application fee that is due at time of application.

An escrow is also required at the time of application to cover all third-party costs related to evaluation, consideration and implementation of financial assistance.

Other fees for additional city services (rezoning, permits, etc.) are the responsibility of the applicant.

Policies and resources

TIF policy (2022)
Inclusionary housing policy (October 2021)
Green building policy (2022)
Diversity equity and inclusion policy (2022)
Diversity, equity and inclusion policy reporting guide (2022)

Current and past TIF districts

Current TIF districts

The city has 22 active TIF districts, and one Hazardous Substance Tax Increment (HSTI) district. The city has proactively used TIF to spur significant redevelopment within the city to create options for life-cycle housing, increase commerce options and opportunities, and to create jobs.

Past TIF districts

Below are some examples of development projects in St. Louis Park that utilized TIF.

Excelsior & Grand
The West End
Elmwood Village/Hoigaard Village
Highway 7 Corporate Center
Park Nicollet Clinic expansion
Multiple mixed income housing developments
680 affordable housing units since 2016

St. Louis Park, MN

Most Requested

Tax Increment Financing

How to apply

Policies and resources

Current TIF districts

Past TIF districts