City seeking TIF authority for Burnsville Center area

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Redevelopment is envisioned north and south of County Road 42 under the Center Village concept assembled by a city-hired team of consultants.

‘Center Village’ plan comes into focus

As plans to remake the Burnsville Center retail area come into focus, city officials are focusing on the next step — locating money to grease the skids for redevelopment.

The city will seek special state legislation to create a tax-increment financing district for the County Road 42 retail corridor anchored by Burnsville Center. The City Council voted Dec. 18 to include the request in its 2019 legislative priorities, which council members will discuss with local lawmakers at a Jan. 15 work session.

Tax-increment financing allows local governments to grant incentives to developers and repay the costs of improvements such as new streets through increased future tax collections on redeveloped or newly developed properties.

Burnsville Center doesn’t qualify for a TIF district under state law because it doesn’t meet thresholds for building dilapidation or code noncompliance, according to a city staff report.

But experience with mall redevelopment in Minnesota and elsewhere shows that cities’ financial participation is “crucial to successful redevelopment,” the report said.

TIF has been used to assist the Ridgedale redevelopment in Minnetonka and the Southdale redevelopment in Edina, said Tom Whitlock of Damon Farber, the firm leading Burnsville Center/County Road 42 redevelopment planning for the city.

“That’s an important economic tool to pursue right away,” Whitlock told the council at a Dec. 11 work session.

Some properties around Burnsville Center may already qualify for TIF help, such as the aging Cub Foods-anchored mall at County Road 42 and Irving Avenue, which has lacked maintenance and reinvestment, Community Development Director Jenni Faulkner said.

At Burnsville Center, a new TIF district could be a game-changer. Seritage Growth Properties, which owns the vacant Sears store and parking lot, has told the city it would be “moved up the list” if it brought public assistance to the table, Faulkner said. Seritage holds numerous closed Sears sites around the country.

“And right now, they don’t qualify for TIF” in Burnsville, Faulkner said. “We don’t have any tools to offer them, except for (tax) abatement, and I don’t think that’s going to move the needle with them.”

It could take “one to three years” to secure special legislation, and “we don’t have much to come to the table with right now,” Faulkner said.

The longer the Sears site remains vacant, the greater the chance Seritage will seek a new tenant for the existing building rather than pursuing a “transformational” redevelopment, Whitlock has said.

The Damon Farber team has identified up to $31 million in public projects to complete the vision of a “Center Village” redevelopment in the corridor. The costliest projects are the extension of Aldrich Avenue north of 42 through the mall property on the south side, construction of a 42 pedestrian bridge and underpass, and a pedestrian bridge over Interstate 35W.

Center Village

The Center Village concept is split into North and South neighborhoods separated by County Road 42.

The South neighborhood is characterized by mall renovation and new development, offering shopping, entertainment, housing, public spaces and other uses in a walkable environment.

The North neighborhood would include new, smaller blocks of streets accommodating a mix of uses. It would include a “neighborhood-scaled park,” according to the plan.

A new, “iconic” County Road 42 bridge would allow continued unimpeded traffic flow with a bike and pedestrian underpass connecting the North and South neighborhoods.

Several retailers north of 42 are “doing very well,” while Burnsville Center is “struggling” and seeking renewal, said Bob Close of Bob Close Studio LLC, a member of the consulting team. Designs for the area stress flexibility and adaptability in a changing retail era, with the capability to accommodate both large and small stores, according to the plan.

Within Burnsville Center itself, the team is calling for a modernized interior, more food and beverage offerings, multiple spaces to create a sense of “place,” more natural light and improved entrances and welcoming points.

The earliest phases of a redevelopment plan that could take up to 20 years to complete would be south of 42, according to the plan. Land use, real estate value and taxes generated south of 42 could skyrocket with full build-out, consultants estimate.

Land use could increase from 1.4 million square feet to 3.1 million, real estate value could rise from $125.2 million to $935.4 million, and taxes generated could rise from $4.8 million to $36 million.

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