Soccer Update: TIF and the Cost of Cleanup

Soccer Stadiums Do Not Qualify for TIF

State statute prohibits the use of Tax Increment Financing (TIF) for recreational facilities, including Minnesota United’s future soccer stadium. It does not exclude the infrastructure surrounding the stadium.

How is TIF Being Used?

The soccer stadium is part of a larger master plan developed by the city and includes two parcels of land, adjacent to the stadium, that will be available for private development.  TIF may be used to prepare these sites for future use, which could include high-rise apartments, office buildings or retail facilities.

Qualifying TIF expenses could include work done to streets, sewer lines, stormwater lines and utilities. TIF could also be used to remove obsolete buildings and cleanup contamination.

By using TIF, the city is spreading its financial commitment over time, similar to a loan structure. The developer will cover costs upfront, with the expectation of recouping a portion of their investment from the “incremental” tax dollars realized when property values, and ultimately property taxes, increase because of these improvements.

Have Cleanup Costs Gone Up?

No. As of right now, cleanup costs are coming in under their original bids. All that has changed is the redirection of TIF. The city approved $1.5 million for cleanup, with the goal of finding grants to cover most of these costs. Grant funds are never guaranteed, and while more than $500,000 has been secured in grants to date, any gap in grant funding will be covered by TIF.

Is the Metropolitan Council Paying Their Fair Share?

Met Council owns 50 percent of the land that is being prepared for Allianz Field and future private development sites, but projections show them paying closer to 60 percent of the $7.1 million estimate. This includes up to $4.5 million in cash and a $1.25 million grant from their Tax Base Revitalization Fund. Other funding sources for cleanup include:

  • $1.5 million from the Minnesota Department of Economic Development
  • $1.5 million from the City of Saint Paul (less any Ramsey County grants)
    • To date $525,000 in grants have been secured, reducing the City’s obligation to under $1 million

The Saint Paul Port Authority has partnered with Met Council in the past, securing significant grants to redevelop business centers in the North End, Frog Town and East Side neighborhoods. Paired with TIF, these projects have resulted in nearly 3,000 jobs in neighborhoods that need them most.