St. Louis Park EDA and City approve Terrazza redevelopment support, TIF and trust‑fund loan

The St. Louis Park Economic Development Authority and City Council voted this month to enable a major redevelopment at 5401 Gamble Drive by approving a housing tax‑increment financing (TIF) district, an interfund loan to reimburse EDA administration costs and a redevelopment contract that includes an affordable‑housing trust fund loan.

The action clears the way for the project known in staff materials as “Terrazza,” a proposed $91.7 million mixed‑use, mixed‑income transit‑oriented development that would replace a largely vacant 3.3‑acre office site. Greg Hunt, the city’s economic development manager, told the EDA the proposal includes a pay‑as‑you‑go TIF obligation of $5,500,000 anticipated to be paid over about 11 years and a $1,000,000 deferred loan from the city’s Affordable Housing Trust Fund that would be repaid with interest in the same period.

Why it matters: Staff and developers said the project would add housing and ground‑floor commercial space in the West End, including 23 units listed in staff materials as affordable at 50% of area median income and additional units the developer intends to reserve with project‑based vouchers. Advocates on the dais said the development would repurpose underused office stock and increase long‑term tax revenue; a dissenting commissioner said the city should use TIF more sparingly.

At the EDA meeting, Hunt summarized the package and said the TIF is “the vehicle for providing financial assistance … but not the financing itself,” and that the EDA’s legal counsel and financial consultant were present to answer questions. The EDA chair moved the resolution and the motion carried at the EDA meeting (tally not specified in the EDA minutes provided).

At the City Council meeting the related items were presented by senior planner Laura Chamberlain and by Hunt. Councilmembers approved motions to: amend the West End Office Park special permit to allow removal of 5401 Gamble Drive from the special permit, adopt a planned unit development (PUD) ordinance for Terrazza, approve a conditional use permit and shared‑parking agreement needed for parking reductions, establish the Terrazza TIF district and TIF plan, and adopt the redevelopment contract and Affordable Housing Trust Fund loan. Councilmembers recorded votes on the TIF and the redevelopment contract as 6–1 in favor.

Council discussion reflected a split in emphasis. One councilmember said TIF is “wrongly mischaracterized as a handout to developers” and described consultant analyses that, in the member’s view, justify the $5.5 million loan as a use of future tax revenues that would not exist without the project. Another councilmember said they would vote against the financing, calling for more deliberation on TIF use and raising concerns about near‑term service demands from new residents and whether the “but‑for” case always requires public subsidy.

On affordability and vouchers: Karen Barton, the community development director, explained that project‑based vouchers would limit tenant rent to 30% of household income with the voucher covering the remainder and that the housing authority typically issues project‑based vouchers for fixed terms (staff said five years is typical, with terms sometimes varied up to 20 years).

Implementation and conditions: Staff said the project already holds planning and zoning entitlements and that the redevelopment would adhere to city policies including the inclusionary housing policy, green building requirements and the city’s diversity, equity and inclusion commitments. The proposed TIF district would cover the single parcel at 5401 Gamble Drive.

What’s next: The redevelopment contract and financing approvals obligate the city to the instruments described in the staff report; the TIF is described as pay‑as‑you‑go and the trust‑fund loan as deferred with an 11‑year repayment expectation. Staff and the developer will proceed to the project’s next steps under the terms approved by the EDA and Council.

Ending: The EDA and City took formal votes to enable the Terrazza project; the council recorded 6–1 votes for both the TIF plan and the redevelopment contract. The project team and city staff remain available to answer additional technical questions about schedules, exact repayment terms and the project’s future phases.