HRA approves technical TIF budget amendments for two senior housing districts
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Summary
The St. Paul Housing and Redevelopment Authority unanimously approved administrative budget amendments for two housing tax increment financing (TIF) districts — Osceola Park and Shepherd Davern — to shift $160,000 more to interest payments for each district and align budgets with actual tax increment collections.
The St. Paul Housing and Redevelopment Authority on Thursday unanimously adopted two administrative budget amendments to two housing tax increment financing districts, saying the changes are technical adjustments to reflect interest and principal timing.
Chair Johnson opened the meeting and the board voted 6–0 to approve amendments for the Osceola Park TIF district (260 South Osceola Avenue, Ward 2) and the Shepherd Davern Senior Rental housing district (1745 Graham Avenue, Ward 3). Both amendments increase the interest budget by $160,000 and reduce the principal amount reimbursed so the HRA’s multi-year TIF budgets match actual tax increment collections.
Why the change matters: Jenny Wolf of the Department of Planning and Economic Development (PED) told the board the projects were funded under pay-as-you-go notes that require the HRA to remit 90% of tax increments it collects to the noteholder; interest must be paid before principal is reduced. Because actual increments and timing have differed from projections, more of the collected increment has flowed to interest than originally budgeted. Wolf said the amendments do not change the total estimated tax increment expenditures or create new public subsidy beyond what was already pledged.
Commissioners pressed for plain-language clarity. Commissioner Naker said the amendment does not divert funds to other districts and noted that when a district underperforms it usually means the private developer bears a larger share of costs; Wolf agreed and added that legislative changes—specifically a change referred to as “4d”—and market values have contributed to lower-than-projected increments for some affordable projects.
The board’s action was procedural: staff characterized the amendments as technical and required to avoid overspending and potential state auditor flags. The Osceola Park district expires in 2028; Wolf said underperformance would leave some principal outstanding at closure that a developer with an outstanding bank loan would still owe.
What’s next: Both resolutions were adopted at the meeting and no further HRA action on these specific amendments was announced.
