HRA staff reports $37 million in tax increments for pay 2025; 58 TIF districts capture 7% of St. Paul tax base

The Housing and Redevelopment Authority heard an informational update on tax increment financing (TIF) at its meeting on May 7, 2025, where debt manager Jenny Wolf summarized pay 2025 collections, outstanding TIF debt and examples of how collected increments are spent.

Wolf said pay 2025 will include tax increments from 58 TIF districts, with $31.4 million attributable to HRA TIF districts and $5.6 million to port TIF districts. "For these 58 TIF districts, they're capturing 7% of St. Paul's tax base," she said, noting the city aims to stay below 10%.

The presentation put recent TIF outcomes in context. Wolf listed 26 housing TIF districts that have created 3,058 housing units to date (2,057 affordable rental and 50 affordable ownership), and 18 redevelopment TIF districts that have produced 2,616 housing units, more than 1.6 million square feet of commercial space, about 149 hotel rooms and nearly 3,500 structured parking spaces. She highlighted the Custom House Post Office TIF as an example of a redevelopment TIF that used a $5.8 million pay-as-you-go note to support a project completed in 2016.

On debt exposure, Wolf emphasized the composition of outstanding obligations and who bears the risk. "Pay-as-you-go TIF notes do not have scheduled payments. The HRA pledges tax increments as they are collected without any liability of the HRA or the city for any financial backing," she said. She reported $97 million outstanding on 32 pay-as-you-go notes, nearly $13 million outstanding principal on TIF revenue bonds and $2.3 million on the remaining GEO (general obligation) TIF bond (Block 39 Lawson), which matures Feb. 1, 2027. Wolf said the GEO bond carries the city's levy-backstop but pledged revenues and parking revenues have covered payments to date.

Wolf explained how pooled TIF dollars are used. Using the Custom House Post Office TIF district as an example, she said 65% of increments were pledged to reimburse the developer and the remaining 35% were retained by the HRA and expended consistent with the district's TIF plan—up to 10% for public improvements, 15% for qualifying affordable housing and 10% for administration. "Pooling expenditures are reviewed by PED leadership with any affordable housing expenditures authorized by the HRA board," she said.

Commissioners asked about risk if expected increments do not materialize. Commissioner Naker sought confirmation that the city would not be on the hook absent GEO bonds; Wolf and Director Newton responded that, with the exception of GEO bonds, the risk typically falls to developers. "So I think that's really important that the risk is primarily on the developer," Naker said.

The HRA also received a table of TIF districts scheduled to decertify in coming years and a projection showing an increase in captured tax capacity through pay 2028 followed by declines thereafter. Wolf noted these projections include established but not-yet-collecting districts such as Snelling Midway and the Ford site.

Ending

The HRA received the update as informational; no action was required at the meeting. Staff noted the collections figures are unaudited and will be finalized with the city audit process.