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Inver Grove Heights council approves partial redistribution of decertified TIF funds
Summary
The council voted to approve a resolution redistributing funds from decertified TIF District 4-1, returning an estimated $2.4 million to the city for general purposes while the full $4.3 million option for affordable housing remains under consideration.
The Inver Grove Heights City Council voted to approve a resolution to redistribute tax-increment financing proceeds from the city's decertified TIF District 4-1, moving forward with the option that returns a portion of the funds to the city and other taxing districts.
Finance Director Hov told the council the district, created in 1991 for a regional mall development, decertified in December 2019. The district's remaining balance is about $4.3 million. Under the redistribution option Hov described, the city's share would be “just over $2,400,000,” the school district would receive about $985,000, and Dakota County about $947,000. Hov said the funds could be used for any city purpose if redistributed; the alternative would be to retain the full balance for an affordable rental housing loan-and-grant program the city established in 2020.
"You can fund affordable rental housing developments anywhere in the city," Hov said, explaining the program's unit-reservation requirements for projects that would use the money: either 20% of units reserved at or below 50% of median income, or 40% at or below 60% of median income.
A council member urged keeping the full $4.3 million to support affordable rental housing developments, saying the city needs more housing for seniors and young families. After a motion to deny the resolution (to keep the status quo) failed, another council member moved to approve the redistribution resolution; the council approved the motion by voice vote.
Hov noted that although the EDA was given administrative authority over the funds in 2020 and the city adopted an affordable-housing program, no loans or grants have been issued under that program to date. The council did not place a staff recommendation in the packet and deliberated before choosing the redistribution option.
The resolution takes effect as documented in the council's action; the council did not, during the meeting, designate a specific new city program to which the redistributed share would be assigned.
