On the agenda: Forest Lake meeting — Data Center (Aug 3)

1

NOTICE OF AGENDA
ECONOMIC DEVELOPMENT AUTHORITY (EDA) MEETING
City of Forest Lake - Link to Meeting Livestream

Forest Lake City Center – Council Chambers
Forest Lake, Minnesota
August 3, 2026 – 6:00 PM (new time)
1. Call to Order
2. Roll Call
3. Pledge of Allegiance
4. Approve the Agenda (Action)
5. Open Forum - Citizen Petitions, Requests and Concerns: Please sign in at the front table.
The Open Forum is available for residents to express personal opinions for any item of business.
Please limit your comments to three (3) minutes.
6. Consent Agenda Considerations (Action Items)*
a. Approve Minutes from Regular Meeting of June 1, 2026
*EDA may remove any item from the consent agenda for specific consideration.
7. Regular Agenda (Action Items)
a. 2027 Budget
b. Business Subsidy Policy
c. Elmcrest Avenue Predevelopment Finance Fund Grant
8. Discussion
a. Tax Increment Finance Policy
b. EDA Marketing and Communications
9. Updates
a. City
i. Headwaters 123 – Data Center Marketing (Verbal)
b. Washington County
c. Forest Lake Area Chamber of Commerce
d. Other
10. Adjourn
*A quorum of the City Council is possible at all Board and Commission Meetings

2

EDA MISSION STATEMENT
Assist and support the economic climate of the City of Forest Lake through programming and communication to achieve the greatest outcome
for its citizens and businesses by:
•
•
•
•
•

Marketing the City and its assets
Supporting existing businesses
Supporting new businesses
Creating partnerships
Providing a vision for the future of commercial areas

*A quorum of the City Council is possible at all Board and Commission Meetings

3

ECONOMIC DEVELOPMENT AUTHORITY 1408 Lake Street South

Forest Lake, MN 55025

Regular Meeting

www.ci.forest-lake.mn.us

~ Minutes ~
Monday, June 1, 2026

6:02 PM

City Center - Council Chamber

City of Forest Lake - Livestream and Recorded Meetings

1. Call to Order
2. Roll Call
Attendee Name
Leif Erickson
Eric Langness
Jill Grindahl
Blake Roberts
Jennifer Lorge
Chris Hoyt
Johnathan Wright

Title
EDA President
EDA Commissioner
EDA Commissioner
EDA Commissioner
EDA Commissioner
EDA Commissioner
EDA Commissioner

Status
Present
Present
Absent
Present
Present
Absent
Present

Arrived

Arrived at 6:08

3. Pledge of Allegiance
4. Approve the Agenda
Motion: EDA Commissioner Lorge made a Motion to Approve the Agenda as submitted.
Motion seconded by EDA Commissioner Langness. Motion carried 4-0.

5. Open Forum – Citizen Petitions, Requests, and Concerns

The Open Forum is available for residents to express personal opinions on any item of business.
Please limit your comments to three (3) minutes.
Comments:
None.

6. Consent Agenda Considerations (Action Items)*
a) Approve Minutes from Regular Meeting of May 4, 2026

Motion: EDA Commissioner Langness made a Motion to Approve the EDA minutes from the Regular
Meeting of May 4, 2026, as submitted.
Motion seconded by EDA Commissioner Roberts. Motion carried 4-0.

7. Regular Agenda (Action Items)

a) 67, 79, & 91 Lake Street South Commercial Improvement Incentive Program Application
Community Development Director Wittman reviewed the Commercial Improvement Incentive

Economic Development Authority

Page 1

Printed __/__/2026

4

ECONOMIC DEVELOPMENT AUTHORITY 1408 Lake Street South
Regular Meeting

Forest Lake, MN 55025

www.ci.forest-lake.mn.us

~ Minutes ~
Monday, June 1, 2026

6:02 PM

City Center - Council Chamber

Program Application received from Owala of Ace Hardwater for the exterior renovation of 67, 79 &
91 Lake Street South. She noted that the approval was conditional based on additional plans that
needed to be submitted and the work completed.
EDA Commissioner Roberts asked about the breakdown of the costs by property. Community
Development Director Wittman answered that it did not break down the cost by the property. She
stated that a majority of the work being proposed was on 91 Lake, but all three buildings would
have some work completed.
EDA Commissioner Roberts asked, with the additional properties, if the applicant was eligible for
more funds. Community Development Director Wittman answered that the requirement was per
project, not per property. She noted she could reanalyze the requirements.
EDA Commissioner Roberts noted that 91 and 79 were attached, and 61 was separate.
EDA Commissioner Langness asked if the final product was sufficient for the purpose, since 91 was
referred to multiple times in the document. Community Development Director Wittman answered
that the funds were project-specific. She noted that the 91 was sufficient for what was being
proposed, but she could take an additional look. She said she would be hesitant to include all three
properties.
EDA President Erickson said he would seek reimbursement for 91. He asked if they would be
eligible for a second grant for 79. Community Development Director Wittman answered that it
would have to be a separate project. She noted that the project itself was what was being
rewarded.
EDA Commissioner Langness discussed the difficulties for the developer to overcome, difficulties
with showing how they parsed out the funds. He requested clarification from the City Attorney on
the best part of the language. Community Development Director Wittman responded that there
was a significant number of improvements on 91, so the developer would spend in excess of
$40,000 on that building alone.
EDA President Erickson recommended removing 67 from the header.
Motion: EDA Commissioner Langness made a Motion to Approve Resolution 06-01-26-01, approving
the Forgivable Loan Agreements as presented.
Motion seconded by EDA Commissioner Wright. Motion carried 5-0.
b) 2027 Budget Proposal
Community Development Director Wittman discussed the need to finalize the budget proposal.
She discussed the 2026 EDA Budget and Year-to-Date expenses and the 2027 draft proposed
budget.
Economic Development Authority

Page 2

Printed __/__/2026

5

ECONOMIC DEVELOPMENT AUTHORITY 1408 Lake Street South
Regular Meeting

Forest Lake, MN 55025

www.ci.forest-lake.mn.us

~ Minutes ~
Monday, June 1, 2026

6:02 PM

City Center - Council Chamber

EDA Commissioner Roberts said that it could be helpful to understand the larger budget for the
City. He recommended providing feedback tonight and discussing the budget in a month.
Community Development Director Wittman noted that the budget drafts were due June 30,
2026.
Interim City Administrator Chaika said that they were looking at a 9.4 percent levy increase. She
said that they received direction to look at a lower levy rate.
EDA Commissioner Lorge asked the budget. EDA Commissioner Roberts responded that the goal
was to set the levy in September and not waver from the amount. He asked if the marketing
they discussed at the last meeting was contemplated in the budget.
Community Development Director Wittman provided additional information about each
different fund type. She noted that they had not exceeded $25,000 for plans and studies, so
they would have funds available that were not earmarked in the budget for other contracting
services.
EDA Commissioner Langness said he was supportive of the budget, but it was difficult when half
of the budget related to salaries was unknown. He asked about the Chamber budget increases.
Community Development Director Wittman noted that the City did not provide wage
information until the preliminary budgets were in. She asked if the other numbers in the budget
were what they wanted to see, or if they wanted to reduce other planning-purpose costs.
EDA President Erickson asked about the fund balance increase each year. Community
Development Director Wittman answered that it was a sizable increase. She noted that they
were saving money in the program funds. She noted that the fund reserve had an interest or
other compounding mechanism.
EDA President Erickson clarified that they were not adding staff to the EDA. He asked if there
were other line items that they would like to cut back to help the City Council with the overall
levy, or if they would like to have a reserve to respond to an opportunity.
EDA Commissioner Lorge asked about the wage increases. Community Development Director
Wittman responded that it was a nominal increase in wages.
EDA Commissioner Roberts said that they could use the fund balance to purchase properties.
Community Development Director Wittman confirmed this information and said they could also
use the funds for completing items like traffic studies when requested.
Economic Development Authority

Page 3

Printed __/__/2026

6

ECONOMIC DEVELOPMENT AUTHORITY 1408 Lake Street South
Regular Meeting

Forest Lake, MN 55025

www.ci.forest-lake.mn.us

~ Minutes ~
Monday, June 1, 2026

6:02 PM

City Center - Council Chamber

EDA Commissioner Roberts suggested leaving the budget as presented, with the idea that the
City Council could use some of the funds for projects.
Community Development Director Wittman said she would bring additional information to the
next meeting.
EDA Commissioner Langness asked what was included in program funds. Community
Development Director Wittman answered that it was the forgivable loan projects.
EDA Commissioner Wright clarified that the EDA Fund was separate from the City Council
general fund, so reducing the budget would not impact the levy. Community Development
Director Wittman answered that it did impact the levy, as they did not have their own taxing
authority.
EDA Commissioner Roberts said he would like to use additional EDA Fund balance to complete
necessary projects or studies.
EDA Commissioner Langness asked about completing wayfinding studies with the reserves.
Community Development Director Wittman confirmed this information.
EDA Commissioner Langness confirmed that the final levy was approved in December.
Community Development Director Wittman said that the current proposed budget could include
wayfinding and another project.
c) Forest Lake Area Chamber Annual Golf Event
Community Development Director Wittman asked if they would like to have an EDA team at the
Forest Lake Chamber Annual Golf Event. She noted that they had sufficient funds to cover the
costs for the team fees.
EDA President Erickson asked if EDA Staff members would be interested in participating.
Community Development Director Wittman answered that Steven Gilmore would be interested
in participating.
EDA President Erickson thought it would be a great idea for them to form a team and asked for
participants.
EDA Commissioner Roberts suggested two staff participating. He volunteered to participate.
Motion: EDA Commissioner Langness made a Motion to Approve the EDA staff to make the
arrangements to register a team and return the scorecard at a future meeting.
Economic Development Authority

Page 4

Printed __/__/2026

7

ECONOMIC DEVELOPMENT AUTHORITY 1408 Lake Street South
Regular Meeting

Forest Lake, MN 55025

www.ci.forest-lake.mn.us

~ Minutes ~
Monday, June 1, 2026

6:02 PM

City Center - Council Chamber

Motion seconded by EDA Commissioner Lorge. Motion carried 5-0.

8. Discussion

a) Opportunity Zones
Community Development Director Wittman reviewed Opportunity Zones, which were a
community development program established by Congress in 2017 and reauthorized in 2025.
She provided an analysis of the potential Opportunity Zones in Forest Lake.
Chris Eng reviewed the intent of the program and specific benefits, such as tax deferral on
capital gains, unrealized gains on an account that can be invested into a low-income area, and a
step-up in basis. He said that this was a legal way to allow benefits to happen for investors. He
noted that they had to be designated first, but the State of Minnesota could only pick 25
percent of those eligible.
EDA Commissioner Langness asked about the timing for the selection process. Mr. Eng
answered that once it was set in place, there could be no change.
EDA Commissioner Langness asked which governor would select 25 percent. Mr. Eng answered
that it would have to be submitted to the State of Minnesota by June 30 and the Federal
Government by September 28.
Community Development Director Wittman said that the funds were intended to help lowerincome communities, but sometimes more development can have more adverse impacts. They
would want to make sure the development would have a positive impact on the community.
She discussed financial institutions that might be interested in partnering in the work. She noted
that it would benefit financial institutions by providing additional assets. She said it was
beneficial to find a local bank to partner with, as they are already engaged in the community.
She stated that they would bring it to the City Council next week.

Motion: EDA Commissioner Roberts made a Motion to recommend to the City Council to engage in
Opportunity Zones and work with the local officials to move forward with an application to the State.
Motion seconded by EDA Commissioner Lorge.
Amended Motion: EDA Commissioner Roberts made a Motion to Amend to include the tract or census
tract ending in 103 as the first preference.
Motion seconded by EDA Commissioner Wright. Motion to Amend carried 5-0.
Motion as Amended carried 5-0.
b) EDA Seal
Community Development Director Wittman requested feedback on the requirement to have a
seal or to amend the by-laws so a seal would not be required.
Economic Development Authority

Page 5

Printed __/__/2026

8

ECONOMIC DEVELOPMENT AUTHORITY 1408 Lake Street South
Regular Meeting

Forest Lake, MN 55025

www.ci.forest-lake.mn.us

~ Minutes ~
Monday, June 1, 2026

6:02 PM

City Center - Council Chamber

EDA Commissioner Langness voiced approval for draft options of a seal.

9. Updates

a) City
i. Airport Business Park Parcels Survey and Wetland Delineation Update (Verbal)
Community Development Director Wittman noted that the Airport Business Park Parcels
certificate of survey was completed, and the wetland delineation would go to the Technical
Evaluation Panel.
ii. 2025 Community & Economic Development Report
EDA Commissioner Lorge provided changes to the report.
EDA Commissioner Langness noted the need to change the language about the convenient
location and concerns from Columbus.
Community Development Director Wittman noted that she would bring the report to the City
Council and discussed different locations to post the report for the public to access.

b) Washington County
Chris Eng said they received two proposals to do a planning project on Elm Crest. He said he
would provide additional information in a future meeting.
Community Development Director Wittman said that the proposals were higher than
anticipated. She noted that there was no committed funding for the project currently.
c) Forest Lake Area Chamber of Commerce
Nannette LaNasa reviewed events held by the Forest Lake Area Chamber of Commerce in May.
She noted that they visited 50 small businesses in the service area. She reviewed future events
for the summer and the candidate forums.
d) Other
None.

10. Closed session pursuant to Minnesota Statutes § 13D.05, Subd. 3(c)(3), to
develop or consider offers or counteroffers for the purchase or sale of
property identified as 08.032.21.13.0169, 08.032.21.13.0170, and
08.032.21.13.0171 Washington County, Minnesota
Economic Development Authority

Page 6

Printed __/__/2026

9

ECONOMIC DEVELOPMENT AUTHORITY 1408 Lake Street South

Forest Lake, MN 55025

Regular Meeting

www.ci.forest-lake.mn.us

~ Minutes ~
Monday, June 1, 2026

6:02 PM

City Center - Council Chamber

Motion: EDA Commissioner Langness made a Motion to Move into Closed Session Pursuant to
Minnesota Statutes §13D.05 Subdivision 3 (c)(3), to develop or consider offers or counteroffers for the
purchase or sale of property identified as 08.032.21.13.0169, 08.032.21.13.0170, and 08.032.21.13.0171
Washington County, Minnesota, at which point they would conclude their meeting and adjourn.
Motion seconded by EDA Commissioner Lorge. Motion carried 5-0.
The Regularly Scheduled EDA Meeting was reconvened at 7:45 p.m.

11. Adjourn

EDA President Leif Erickon adjourned the Regularly Scheduled EDA Meeting at 7:46 p.m.

Economic Development Authority

Page 7

Printed __/__/2026

10

EDA Meeting Date:

August 3, 2026

To:

President Leif Erickson and EDA Commissioners

From:

Abbi Wittman, Community Development Director

Re:

2026 Budget Update and 2027 Annual Budget Request

The City Council has requested the EDA’s budget for 2027. To finalize the budget proposal, staff
has prepared this memo for the EDA’s discussion and direction for staff. The intent of this
memo is to focus on operations, contracted services, planning and program funds; as of right
now no new wages (above negotiated contract increased) are proposed for 2027. For EDA
discussion, enclosed is the current workplan.
EDA Year To Date Expenses
The EDA’s 2026 budget is $259,069. A breakdown of the budget, with year-to-date expenses
(through June, 2026), is as follows:
2026 EDA Budget and Year-To-Date Expenses
2026 YTD
Category
2026 Budget
Percent of Total
Expense
Wages
$146,569
$60,917.51
42%
Operations
$7,500
$1,391
19%
Contract Services
$10,000
0
0%
Planning
$45,000
$16,335
36%
Program Funds
$50,000
$10,000
20%
Total
$259,069
$88,643.51
34%
Though through ½ of the year, the EDA has only spent (approximately 34% of its budget). This
is consistent with mid-year reporting for the past two years.
Funds not yet spent include committed funds for contracted (Chamber BR&E Agreement) and
professional (HW123 Concept Planning, developer engagement, and potential HWY 61 corridor
study) services. These funds are earmarked and will be needed in 2026.
EDA Fund

1408 Lake Street South | Forest Lake MN 55025 | 651.464.3550 | Fax 651.464.6874 | www.ci.forest-lake.mn.us

11

2

As a reminder, activities for the EDA are funded out of City Fund 212. This is a fund separate
from the City’s General Fund with revenues coming from an EDA-specific levy that, if not spent
by the EDA, stay within the EDA fund. In other words, if the EDA does not spend all of its dollars
in 2026, those monies will be used to grow the EDA’s fund balance. Conversely, if the EDA
spends more than the levy amount, the overage is subtracted from the EDA’s fund balance. As
June, the EDA’s fund balance is $429,576.11 which is an increase from $256,628.05 this time
last year.
2026 Budget
In 2026 the EDA had significant discussions regarding minor increases to the EDA’s budget to
reflect increased wages, contracted services and legal needs. Upon reviewing multiple budget
scenarios, the EDA ultimately forwarded to the City Council a 13.09% increase to the EDA’s
budget. This was approved by the City Council.
2027 Budget
In June the EDA requested staff bring the budget back with wage data as well as determine
what would be costs associated with developing additional community and/or local
development toolkits to assist with business and development attraction. To date, staff has
received one proposal for economic development marketing which could cost $12,000 in 2027/
2026 Budget & 2027 EDA Draft Proposed Budget
Category
2026 Budget
2027
Wages*
$146,569
$160,900
Operations
$7,500
$7,500
Contract Services
$10,000
$10,000
Planning
$45,000
$45,000
Program Funds
$50,000
$50,000
Total
$259,069
$273,400
Staff is recommending that, aside from $14,331 in salary adjustments, the EDA not increase its
budget in 2027. Staff believe there is sufficient funding proposed in the 2027 budget to
conduct necessary planning and predevelopment activities. In the event the EDA would like to
try to assist in lowering or stabilizing the levy, staff would recommend the EDA consider
lowering the EDA’s 2027 Planning budget as, in the last several years, the EDA’s expense have
not exceeded $25,000.
Requested Action
City staff is requesting the EDA discuss the proposed budget scenarios and take the following
actions:

1408 Lake Street South | Forest Lake MN 55025 | 651.464.3550 | Fax 651.464.6874 | www.ci.forest-lake.mn.us

12

3

1. Move to approve a proposed budget (as amended, if so desired); and
2. Direct staff to prepare a Resolution for formal EDA approval at the next scheduled EDA
meeting.
Attached
2026 Workplan Table

1408 Lake Street South | Forest Lake MN 55025 | 651.464.3550 | Fax 651.464.6874 | www.ci.forest-lake.mn.us

13

Economic Development Authority
2026 Workplan Table

EDA Policy Review
Business Subsidy
Tax Increment
Tax Abatement
Predevelopment Finance
Headwaters 123
Update Site Plan
Website Updates
Developer Roundtable
Site Incentives
Significant Private Properties
Vacant Land Analysis
All Public Properties
Community Visioning
Comprehensive Plan Consultant
Community Visioning
HWY 61 Corridor Planning
Plan Scoping
Request for Proposals

2026 Q1

2026 Q2

2026 Q3

2026 Q4

14

STAFF REPORT
MEETING DATE:

August 3, 2026

TO:

President Leif Erickson and EDA Members

STAFF ORIGINATOR: Abbi Wittman, Community Development Director
AGENDA ITEM:

Draft Business Subsidy Policy

______________________________________________________________________________
INTRODUCTION:
In May the EDA directed staff to make changes to the draft Business Subsidy Policy. Enclosed is
a track-changed version which summaries the direction of the EDA. Staff is requesting the EDA
review the enclosed policy and, if favorable, make recommendation the City Council adopt the
policy. Upon adoption of the policy by the City Council, staff will bring the matter back before
the EDA for the EDA’s adoption.
ANALYSIS:
State law requires that the City have an over-arching Business Subsidy Policy if the City is to
offer financial assistance to businesses and developments. The intent of this Policy is to serve as
a foundation for all types of financial assistance to businesses and for developments in the
future with the goals to:
1. Make the Policy easy to read and understand for the public, City Council/EDA, and staff.
Simply put, having a document only financial professionals can understand does not help
the City.
2. Make the Policy specific to the City’s future development and land use needs and
desires. While subsequent Policies can be tailored down, this Policy does need to be
broad enough to cover what the City anticipates for future growth and development.
Any other EDA financial assistance program thereafter would be tailored to specific types of
projects, developments, and land uses. However, all other EDA financial assistance programs
would need to conform to the Business Subsidy Policy.
RECOMMENDATION:
Staff is requesting the EDA discuss the enclosed Business Subsidy Policy, if favorable, motion to
recommend the City Council approve the City of Forest Lake Business Subsidy Policy.
ATTACHMENTS:
Draft Business Subsidy Policy

15

DRAFT City of Forest Lake Business Subsidy Policy
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.

Introduction and Overview
Purpose and Intent
Legal Authority
Business Subsidy Eligibility
Application Submission and Review
Legal Agreements
In-Eligibility and Disqualification
Disclaimers
Data Practices Law
Amendment

16

Introduction and Overview
It has been the practice of the City of Forest Lake (City) and its Economic Development
Authority (EDA) to provide business subsidies for redevelopment and to business and industry
relocating to or expanding in the city. These subsidies can be instrumental in developing and
maintaining Forest Lake’s sustainable, diversified economy. The development and adoption of
formal Business Subsidy Policy will ensure a uniform and coordinated approach to economic
development activities and incentive awards.
For the purposes of this Business Subsidy Policy, a "business subsidy" or "subsidy" means a
grant, contribution of personal property, real property, infrastructure, the principal amount of a
loan at rates below those commercially available to the recipient, any reduction or deferral of
any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or
any preferential use of government facilities given to a business.
Purpose and Intent
The purpose of this Business Subsidy policy is to establish policies and procedures for the
regulation and use of financial assistance tools.
The intent of the City of Forest Lake’s Business Subsidy Policy is:
1. To ensure the long-term well-being of Forest Lake citizens and the community by
ensuring the City’s ability to expand its diversified economy well into the future.
2. To create high-quality employment opportunities for its citizens by retaining and
expanding the existing business base and attracting new businesses to the City.
3. To build a diverse tax base, by strengthening commercial, industrial, and mixed-use
districts while providing a variety of housing options.
4. To encourage and sustain orderly growth, development, and redevelopment in and
around Forest Lake.
5. Ensure responsible stewardship of public funds.
For the purpose of this Policy document and subsequent amendments:
•
•

The term “City” includes the Forest Lake City Council, EDA, staff, financial consultants,
and legal counsel; and
The term “applicant”

Legal Authority
This policy is adopted in accordance with:
•
•

Minnesota Statutes Section 116J.993–116J.995 (the Business Subsidy Act)
Minnesota Statutes Chapter 469

17

•

Applicable DEED reporting requirements

Business Subsidy Eligibility
The City may consider business subsidies for private development projects that meet a “public
purpose”. The public purpose cannot be limited to an increase in tax base, must be measurable,
and must benefit the City as a whole. Such assistance must comply with all applicable statutory
requirements and meet two or more of the following criteria:
1. Projects that provide needed public infrastructure improvements that would be
completed in conjunction with the project.
2. Projects that create new business or residential opportunities in Downtown Forest Lake
as defined in the Downtown Plan.
3. Redevelopment projects that result in the stabilization of business districts or
transportation corridors by eliminating blighted conditions.
4. Projects where the capital investment in existing local business or industry combined
land and improvement value (as determined by the Washington County Assessor’s
Office) is increased by greater than 50% the assessed valuation
5. Projects that assist in the orderly growth of the City and generate significant economic
spinoff.
6. Projects that enhance or increase the economic diversity of the Forest Lake by attracting
businesses or industries not currently located in the City.
7. Projects that enhance the value of surrounding properties, stabilize the area, or foster a
‘sense of community’.
8. Projects that result in the creation of higher wage and quality employment
opportunities, as required by the Business Subsidy Act.
a. New Job Creation – The applicant will be required to demonstrate that the proposed
project will create at least one new non-owner job, considering the project type and
site. If the City determines that the creation of jobs is not a goal of the specific
project, the job creation goal will be set to zero.
b. Minimum Wage Requirements – New jobs created by the project must pay at least
400% of the State of MN Minimum Wage or 100% or the Forest Lake median
household income, both exclusive of benefits, whichever is greater. The City may
establish wage goals for new jobs to be created that vary from the standard above.
Meeting this policy criteria does not guarantee the award of business subsidy for the project.
Application Submission and Review
Applicants will complete and submit:
•
•

A City application.
Site plan, building floor plans, landscape plans, and building elevation concepts.

18

•

•

The application fee of an amount established in the City’s Fee Schedule to cover
administrative review costs and professional services, including financial and legal
advising.
Other information which may be requested by the City. This will include, but not be
limited to, required market and financial feasibility studies, appraisals, soil borings,
information provided to private lenders for the project, and other information or data as
requested.

The review process shall involve at least the following:
1. Once the application is submitted and deemed complete, the City will review to ensure
the following:
a. The project is deemed consistent with City’s Goals and Objectives outlined in the
Comprehensive Plan and City Code
b. The project meets the minimum qualifications of this Business Subsidy Policy
c. The project meets “but-for” analysis and/or other statutory qualifications.
2. The City will prepare a non-binding Term Sheet outlining the details and conditions of
any public assistance.
a. For assistance that does not constitute a business subsidy under the Business
Subsidy Act, the grantee and the City will enter into an agreement setting forth the
terms of the assistance.
i. Approval will occur at the next available City meeting after Agreement signature.
b. For assistance that does constitute a business subsidy under the Business Subsidy
Act, the EDA will review the Term Sheet and
i. Act on the application, if so authorized by specific policy.
ii. Make a recommendation to the City Council,
1. The City Council will consider approval of the Term Sheet at a subsequent
meeting.
3. If the Term Sheet is approved by City Council, the developer shall make an additional
escrow deposit to cover costs incurred as part of establishing a TIF district or abatement,
drafting and negotiating a development agreement, and conducting any fiscal analysis
that may be required to meet the requirements of utilizing any public financing. If
additional expenses are incurred beyond the initial deposit, prior to the execution of a
development agreement, the City/EDA shall notify the applicant in writing and the
applicant will be required to deposit additional funds upon notice.

19

4. Prior to approval of any Agreement the City Council will hold a public hearing. A public
notice shall be published in print and if possible, on the internet, at least 10 days prior to
the hearing identifying the location, date, and time of the hearing and providing
information about the business subsidy proposed, including a summary of the terms of
the subsidy.
The City reserves the right to approve or reject projects on a case-by-case basis, taking into
consideration established policies, project criteria, and demand on City services in relation to
the potential benefits from the project.
Legal Agreements
If the subsidy application is approved, the business and the City will enter into Agreement. All
Agreements shall contain:
•
•

A description of the subsidy, including the amount and type of subsidy
A statement of the public purposes for the subsidy

If required by the Business Subsidy Act, the Agreement will commit the recipient to provide the
reporting information required by the Business Subsidy Act, if any. The Agreement shall provide
the following information:
a.
b.
c.
d.
e.

Wage and job goals (if applicable)
Measurable, specific and tangible goals for the subsidy
Commitment to provide necessary information for reporting purposes
Five-year operation commitment after the benefit date
Recourse for failure to meet goals required by the Statutes

Business Subsidy Act required Agreements may be incorporated into a broader development
agreement for a project.
Ineligibility or Disqualification
An applicant shall be deemed ineligible for assistance under this policy if any of the following
conditions apply:
•
•

Financial Delinquency – The applicant is delinquent on obligations to the City or other
government entity (e.g., taxes, fees, utilities, loans), unless covered by an approved
repayment plan.
Pending Legal or Regulatory Action – The applicant is involved in litigation or
enforcement actions that may, in the City’s judgment, impact their ability to perform or
comply.

20

•
•
•
•

History of Non-Compliance or Default – The applicant has a record of defaulted,
breached, or non-compliance otherwise been in non-compliance with agreements,
permits, or approvals from the City or other government entities.
Good Standing – The applicant is not in compliance with applicable legal or regulatory
requirements (e.g., licensing, taxes, labor, environmental laws).
Reputational or Performance Concerns – Credible evidence of poor business practices—
such as repeated violations, substantiated complaints, unethical conduct, or failure to
complete projects—may indicate risk to public resources or community interests.
Material Misrepresentation – The applicant has provided false, misleading, or
incomplete information in current or prior dealings with the City.

The City retains sole discretion to evaluate the totality of circumstances in determining
applicant eligibility and may request additional documentation as needed. Determinations
made under this section shall be final unless otherwise provided by applicable law or appeal
procedures established by the City.
Disclaimers
•
•
•

Applicant will be liable for any additional costs beyond the initial fees and escrow
deposits.
Approval or denial of one project is not intended to set precedent for approval or denial
of another project.
All materials submitted to the City in connection with a business subsidy application
shall become the property of the City.

Data Practices Law
The City of Forest Lake is a governmental body and is subject to the requirements Minnesota
Government Data Practices Act. Some of the data provided by the applicant to the City as part
of the application for a Business Subsidy may be required to be disclosed if requested pursuant
to the Minnesota Government Data Practices Act.
Amendments
The City may amend this document at any time. Amendments to this Policy are subject to
public hearing requirements contained in applicable State Statutes.

21

STAFF REPORT
MEETING DATE:

December 1, 2025

TO:

President Leif Erickson and EDA Members

STAFF ORIGINATOR: Abbi Wittman, Community Development Director
AGENDA ITEM:

Elmcrest Avenue Corridor Study Cooperative Agreement Predevelopment
Finance Fund Grant

______________________________________________________________________________
INTRODUCTION:
In December, 2025 the City entered the Elmcrest Avenue Corridor Study Cooperative Agreement
with the cities of Columbus, Hugo, and Lino Lakes, along with Anoka and Washington County’s
Economic Development Authorities. The Agreement indicated all parties would work together
on developing a study for Elmcrest Avenue. Since that time, the Cities and Counties have
selected a firm to conduct the study. Staff is requesting the EDA take action necessary to keep
this project moving forward.
ANALYSIS:
The total cost of the project is anticipated to be $112,000. Members of the cooperative have
verbally agreed to 50:50 (by County) split of the expenses. The 50% portion of Washington
County can be wholly funded through the Washington County Predevelopment Finance Fund.
However, this will require Hugo and Forest Lake to apply for funding, with each City’s grant
serving as a match to the other City. In other words, this will be at no cost to the City of Forest
Lake or the Forest Lake EDA.
Two actions need to occur:
1. The EDA must pass Resolution authorizing submittal of a WA County Predevelopment
Finance Fund Grant for the Elmcrest Avenue Corridor Study; and
2. The City Council must approve a Cooperative Agreement Amendment.
RECOMMENDATION:
Staff recommends that the EDA motion to approve Resolution 08-03-26-01, authorizing the
submittal of Predevelopment Finance Fund grant application for the Elmcrest Avenue Corridor
Study.
ATTACHMENTS:
Resolution No. 08-03-26-01

22

ECONOMIC DEVELOPMENT AUTHORITY
CITY OF FOREST LAKE
WASHINGTON COUNTY, MINNESOTA
RESOLUTION NO. 08-03-26-01
A RESOLUTION APPROVING THE APPLICATION FOR FUNDING THE WASHINGTON COUNTY CDA
PREDEVELOPMENT FINANCE FUND
WHEREAS, the City of Forest Lake has entered into Cooperative Agreement for the study of the Elmcrest Avenue
Corridor; and
WHEREAS, the City of Forest Lake’s Economic Development Authority has identified this study meets the
Washington County Community Development Agency (CDA) Predevelopment Finance Fund’s purposes and
criteria; and
WHEREAS, the City of Forest Lake’s Economic Development Authority is supportive of enhancing economic
development opportunities that will serve to create jobs, enhance the tax base and improve the lives of
Washington County residents; and
WHEREAS, the City of Forest Lake’s Economic Development Authority has established that the area in
consideration has been zoned and/or guided for future development accordingly and the proposed project is a
high priority of the city; and
WHEREAS, the City of Forest Lake’s Economic Development Authority has the legal authority to apply for financial
assistance; and
WHEREAS, the City of Forest Lake’s Economic Development Authority supports the proposed project and hereby
supports the $28,000 grant application, with $28,000 grant match from the City of Hugo, to the Predevelopment
Finance Fund.
NOW THEREFORE BE IT RESOLVED that the City of Forest Lake’s Economic Development Authority approves the
application for funding from the Washington County CDA Predevelopment Finance Fund.
BE IT FURTHER RESOLVED that upon approval of its application by the Washington County CDA, the City of Forest
Lake’s Economic Development Authority’s President Leif Erickon (or successor), is hereby authorized to execute
such agreements as are necessary to receive and use the funding for the proposed project.
Adopted this 3rd day of August, 2026.
CITY OF FOREST LAKE EDA

Attest:
________________________________
Abbi Wittman, Secretary

_____________________________
Leif Erickson, President

23

STAFF REPORT
MEETING DATE:

August 3, 2026

TO:

President Leif Erickson and EDA Members

STAFF ORIGINATOR: Abbi Wittman, Community Development Director
AGENDA ITEM:

Draft Tax Increment Financing Policy

______________________________________________________________________________
INTRODUCTION:
As the EDA is aware, staff have been working on public financing policy updates. As the Business Subsidy
policy (again ‘the umbrella’) has been finalized, we are starting to review specific public financing tools.
Enclosed is City Exhibit 360, the City's legacy 1990s TIF Policy. Staff have not been able to confirm if this
policy was ever formerly adopted and, upon searching of EDA records, it does not appear to have been
reviewed in 35 years. Using this policy as a based, staff drafted the enclosed City of Forest Lake – Tax
Increment Financing Policy (Draft). Staff is requesting the EDA review the enclosed policy and provide
directions on amendment prior to making recommendations to the City Council for a TIF policy update.
ANALYSIS:
The enclosed draft TIF Policy started from the Exhibit 360 Policy. Then staff benchmarked it against
comparable Minnesota cities' business subsidy and TIF policies (including Prior Lake and Rosemount) to
see how they structure job creation, wage floor, and investment-ratio criteria. From there, staff
incorporated the key statutory framework under the Minnesota TIF Act (Minn. Stat. 469.174–469.1794)
and built in specific benchmark criteria including:
• a 3:1 private-to-public investment ratio
• a 1.2:1 debt service coverage ratio
• a 1:2 pre/post-redevelopment tax base ratio
• a 10% land-price ceiling above market value
• a 50% pre-leasing threshold for distinguishing speculative from non-speculative projects.
Staff will guide the EDA through the enclosed policy at the EDA’s next meeting. Staff will be seeking
feedback on any additional changes the EDA may want to see made before recommendation to the City
Council.
RECOMMENDATION:
Staff recommends the EDA review and discuss the enclosed policy, providing direction to City staff on
EDA desired updates.
ATTACHMENTS:
City Exhibit 360
City of Forest Lake – Tax Increment Financing Policy (Draft)

City Exhibit 360
24

CITY

TAX

1.

PURPOSE

1.
01

The

INCREMENT

it

as

FOREST

this

of

purpose

position

OF

LAKE

POLICY

policy

is

to

relates

to

the

the

establish
of

use

Tax

City's

Increment

Financing for private development. This policy shall be
used

as

a

applications
1.
02

The

City

guide in processing and reviewing
requesting Tax Increment assistance.

shall

sections

the

have the option of amending or waiving
or
policy when determined necessary

this

of

appropriate.
2.

2.
01

STATUTORY
In

LIMITATIONS

accordance

with

the

Increment
Policy, TIF
the
applicable State

Tax

with

Requests

must

Statutes.

The City of Forest Lake is governed

limitations

comply

established

in Minnesota

the
Minnesota Tax
Increment
districts created after August
3.

ELIGIBLE

3.
01

As

a

will

USES

matter

FOR THE USE

Act

all

for

1979.

TAX INCREMENT

adopted policy, the
Tax
Increment

of

consider

OF

Financing
1,

by the

Statutes 469.174,

FINANCING

City of Forest Lake
Financing ( TIF) to

using

assist private developments only in those circumstances

in which the vroposed private projects meet one or more

of the following uses:
A.

To

maintain

and

point

focal

expansion

improve

of

and

the

community

downtown

activity

concentration

area

the

which

will

uses

of

provide goods, personal and professional

entertainment, and recreational use to
of Forest Lake and its surrounding area.

B.

To

the

encourage

concentration

of

the

as

through

new

services,
residents

commercial

activities and development in the downtown area as
a means of re-enforcing existing retail activities
the
discouraging
fragmentation and
decentralization
of
the
retail
vitality of the
City.
and

C.

Provide
and

for

public

the

improvement of existing
and
to
rights o
- f way
provide

streets
a

more

attractive and pleasant pedestrian environment.
D.

E.

utilities

Provide

expanded

a means

of encouraging

Make

the

area

efficient

for

more

and

public

new commercial
attractive,

both

people

services

as

growth.

convenient

and

and
commercial

activities.

1-

P1

25

F.

Provide

firms
G.

To

sites

accommodate

to

new

expanding

or

in the City.

create

new

and

expanded

employment

opportunities.
H.

To improve the tax base of the community.

I.

To

the
promote and secure
prompt
development of
in the
property
development
district,

certain

which

property

its

highest

with

the

best

City's

in

use,

a

use or

manner

in

consistent

a
plan and with
and
environment,
the
development of

comprehensive

minimum

adverse

impact

thereby

promote

and

other
J.

is not now in productive

and

on

secure

the

land in the City.

Promote

and

additional

secure

employment

opportunities
within the development
district and
the
City for residents of the City and the
surrounding area, thereby improving living
and
the
loss
of
standards, reducing unemployment

skilled

K.

labor

and

other

human

in the City.
increase

the

Secure

unskilled

and

resources

of

housing, commercial, and
subject to taxation
by the
City, Independent School District #831, Washington
County, and other taxing jurisdictions in order to
industrial

better

property

enable

governmental

such

services

entities

and

programs

to

pay

for

required to be

provided by them.
L.

Provide

for
the
of
financing and construction
improvements in and adjacent to the
for
the
development
district, necessary
orderly

public
and

M.

beneficial

development

district

and adjacent

Promote

the

of

the

development

areas of the City.

concentration
of
commercial, office
appropriate development in the
development district so as to maintain .the area in
a
manner
its
and
compatible with
accessibility
and

other

prominence in the City.
N.

Encourage -local

business
expansion, improvements,
whenever possible.

and development
0.

Create

a desirable

and unique

character

within

district through
quality land
alternatives
and
in
new
design quality

development

the
use

and

remodeled buildings.
P.

Encourage

and

provide

private

redevelopment
structures
which -are

maximum

opportunity
existing areas
compatible with

of

for
and

the

development program.
Q.

To provide for the orderly use of vacated streets
within

the City.
2-

P2

26

R.

of property
promote and secure the conversion
presently serviced
by private wells and septic
to
tanks
the
City's water and sewage system,
impact on the
thereby preventing any adverse
To

environment and the general health
of residents within the City.
S.

To

the

encourage

economical

and well b
- eing
and

development

improvement of the downtown area on a planned and

It is the further objectives of
organized basis.
the program to enhance the City's core area as the
and
focal
point of retail, commercial, office
service activity.
T.

To encourage an expansion of commercial activities
in a manner which will promote the image of Forest
Lake and expand its drawing power.

U.

To

the

promote

of

development

commercial

new

activities which will support existing commercial
uses and which contribute to the well being
of the
downtown
V.

It

is

will
of

area.

use
land
anticipated that this
be accomplished through the public

sites

for

improvement
W.

new

construction

and

of public

facilities.

with

above

Incorporated

the

will

objective
provision

through

be

the

programs

to
designed
improve parking relationships and
pedestrian corridors which will allow convenient

4.

TAX

4.
01

All

movements

of

attractive

and pleasing

INCREMENT

people

PROJECT

the

throughout

in

area

an

environment.

APPROVAL

CRITERIA

new
projects approved by the City of Forest Lake
should
meet
the
following mandatory minimum approval
criteria.
it
should
not be presumed that a
However,

be
meeting these criteria will automatically
no
Meeting these criteria creates
contractual
rights on the part of any potential

project

approved.
developer.
A.

The

TIF

assistance

shall

be

provided

within

debt
legislative restrictions,
applicable
limit
guidelines, and other appropriate financial
requirements and policies.
state

B.

C.

D.

The

project should meet one or more
adopted Tax Increment Financing Goals

of

the

above

of the City.

project must be in accord with the
or
Comprehensive Plan and Zoning Ordinances,
required changes to the plan and ordinances must
be
active
under
consideration
by the City at the
time of approval.
The

TIF

that

assistance
have

the

will
not
be
provided
financial
feasibility

to
to

projects
proceed

3-

P3

27

without
In

the

benefit

effect,

of

Tax

assistance

TIF

Increment
Financing.
will
be
not
provided

solely to broaden a developer's profit margins on

to
Prior
consideration
of
a
project.
assistance
financing
request, the City
undertake
an
independent underwriting of
a

to

project

assistance

E.

Prior

is

to

of

information

project,
City or

a

other

its

financial

To

flows

cash

ensure

private

infoLmation

to be available

should

developer
guarantees to

projects

to funds

financial
adequate
repayment of the TIF

the

may

include,

These

required

provide

ensure

assessment

but

are

not

limited

of

credit,

letters

agreements,

etc.
H.

Any

able

developer
to

may

independent

an

adequate

service ). ,

The

data

or

consultants

proceed. with

are

and

soil
lenders

should
normally have a
ratio -(
a
ratio
of
coverage —

service

projected

subsidy.

the

plan,

assistance

TIF

1.
1
2:debt
-

to

provided

to

to:

financing

TIF

and

require in order
underwriting.
receiving

G.

for

provide any required market
feasibility studies, appraisals,

for
the
that
the

debt

the

request

valid.

borings,

for

the

shall

financial

funds

that

ensure

approval

developer

F.

help

TIF

may

requesting

demonstrate

TIF

assistance

should

be

past

successful
general
development
capability as well as specific
capability in the type and size
of
development

proposed.
I.

The

developer should
project at least long
stabilize

its

ownership
complete

to

of

the

it, to

occupancy,

management, and to
J.

retain

enough

to establish the project
initiate repayment of the TIF.

The level of TIF funding should be reduced
lowest

possible

private

debt

level

and

by

maximizing

the

to the
use

of

equity financing and then
using other funding sources
or
income
producing
vehicles that
can
be
structured into
the project
financing, prior to using additional TIF funding.
5.

TAX INCREMENT PROJECT EVALUATION CRITERIA

5.
01

All

projects

will

be
evaluated
on
the
following
comparison with other proposed TIF
projects reviewed by the City, and for comparison with
other
subsidy standards ( where appropriate).
It
is

criteria

for

realized

that

construction,
the

amounts

in local
changes
markets, costs
and
interest rates
may'cause changes
of
Tax
Increment
subsidies
that
a

project may require at any given time.

of

in

given

4-

P4

28

5.
02

criteria, by their very
However, wherever
subjective.

Some

criteria
The

fact

established

been

have

that

given

a

proposal

nature,

remain

must

possible "

benchmark"

review
for
purposes.
or
one
more
meets

benchmark" criteria does not mean -that it is entitled

to funding under this policy, but rather that the City

position to proceed with evaluations of ( and
comparisons between) various TIF proposals, using
uniform standards whenever possible.
is

5.
03

in

a-

Following are the evaluation criteria that will be used

by the
A.

City

The

of Forest

TIF

All

TIF

possible
ratio.
of

3

the

private

the

highest

optimize
of a site.

should

proposals

development
B.

Lake:

potential

private

to

The Council
parts private

obtain

should

proposals

public financial investment
establishes a benchmark ratio
for
to
1
part public funding

industrial project- Housing-and retail commercial
/
projects shall be reviewed on an individual basis.
C.

TIF
All
feasible

proposals

should

number

new

Council

establishes

created ( or

of

retained)

jobs

the
create
highest
site.
The
the
on

benchmark

a

of

one

newly

TIF job per $

of TIF assistance provided to industrial projects.
projects shall be
Housing and Retail /Commercial
reviewed
D.

All

on

an

individual

basis.

create
the
highest
proposals should
of
paid before and
property taxes
different
the
Given
redevelopment.

TIF

possible
after

ratio

in the City, this ratio
circumstances
assessment
normal
under
will
However,
vary
widely.
least
at
Council
will
the
expect
circnmstances,
after
and
of
taxes
1:
2
ratio
paid before

redevelopment.
E.

to
used
not
be
normally
and
commercial
support speculative industrial,
office
In general, speculative projects
projects.
TIF

proposals

of

projects which have letters
preleasing for less than 50%of the
leasable space.

defined

are

intent

All
the

TIF

as

those

or

available
F.

should

will

proposals

be

reviewed

determine

to

provide the City with equity
feasibility
participation in new developments through a share
of

to

the

profits,

or

a second mortgage
G.

All

TIF

proposals

and moderate
attention
residents.

income
to

to

treat

the

TIF

assistance

the

involving

of

displacement

low

residents should give specific
rehousing needs of those

Normally,

this

should

be

TIF
the
funding proposal.
needs
to
these
resolutions
housing

part

as

with fixed payments.

of

done

as

a

Adequate
will

be

required as =a matter of public policy.
5-

P5

29

H.

will

TIF

normally

involves

an

This will normally
is

I .

more

All

than

10%
in

land

will

project

a

that

and or
/
property

price.

be where the acquisition

price

excess

will

projects

TIF

TIF
test.
the
City's

in

used

not . be

excessive

not

of

market

value.

to meet
the " but
for"
need
be used unless
the need
for

economic participation is sufficient
that without that assistance the project could not

proceed
J.

in the

as proposed.

TIF will not be used in projects that would give a
financial
over
significant competitive
advantage
similar projects in the area due to the use of tax
increment

K.

manner

subsidies.

will

TIF

not

be

when

used

the

developer's

credentials, in the sole judgment of the City, are
inadequate due to past track records relating to:
completion of
general reputation and or
/
bankruptcy, or other problems or issues considered
relevant by the City.
L.

A

developer

using

will

TIF

need

to

provide

a

financial guarantee for the repayment of the TIF,
within the constraints
M.

will

TIF

place

not

demands

to
used
support projects that
City services, or other capital
expenditures, that exceed the average

Consideration
that

be

similar

for

will

facilities.

be

given to the . total. public
required support the project,

are

including

tax law.

on

or operating
City expenditures
costs

of existing

offsite

facilities

costs

that

are

required.
N.

TIF

will

would
in

not

generate

the

used

be

normally

significant
of

opinion

for
projects that
environmental problems

local,

state

or

federal

governments.
0.

TIF

will

not

development

has

be

when

used

exceeded

the

the

schedule

schedule

for

established

in the redevelopment agreement, and where the
has not agreed to extensions of that schedule.
P.

TIF . funding
should
projects that fail

criteria.as

determined

not
be
to
meet

by

poor
project
accord
with

the

to
those
provided
good public policy
Council, including:

quality;
projects that are not in
the
comprehensive plan, zoning,
redevelopment
plans, and City policies ; projects
that
provide.. no significant
improvement to
or
surrounding land uses, the neighborhood

significant
not

have

projects
criteria

increase in tax base; projects that do

significant

new, or retained, employment;
not
meet
financial
feasibility
established
by the City; and
projects

that

do

do
not
provide the
use for the property.
that

highest

and

best

desired

6-

P6

30

1. Purpose and Authority
This policy (“Policy”) establishes the position of the City of Forest Lake (“City”) and the Forest Lake Economic
Development Authority (“EDA”) regarding the use of Tax Increment Financing (“TIF”) to assist private
development and redevelopment. This Policy is a guide used by City and EDA staff, the City Council, and the
EDA Board in processing and evaluating applications for TIF assistance. It is not a substitute for, and does not
modify, the requirements of the Minnesota Tax Increment Financing Act, Minnesota Statutes Section 469.174 to
469.1794, as amended (the “TIF Act”), or any other applicable law.
The EDA is the City's designated development authority for the administration and issuance of tax increment
financing under Minnesota Statutes Chapter 469. The EDA and City Council will consider TIF requests only where
a proposed project furthers the City's adopted economic development goals and objectives and satisfies the
statutory “but for” finding described in Section 8 below.
The City considers TIF assistance to be a limited public financing tool, not an entitlement. All elements of the
City's Business Subsidy Policy, as may be amended, apply to TIF assistance granted under this Policy to the extent
the assistance constitutes a “business subsidy” under Minnesota Statutes Sections 116J.993 to 116J.995 (the
“Business Subsidy Act”).
The City reserves the right to amend, waive, or deviate from any section of this Policy when the City Council or
EDA determines it necessary or appropriate to serve the public interest, consistent with statutory requirements.

2. Definitions
•

•
•

•
•

“But For” Test – the statutory finding that the proposed development would not reasonably be expected to
occur solely through private investment within the reasonably foreseeable future, and that the increased
market value estimated to result from the proposed development would not occur without TIF assistance.
“Developer” or “Applicant” – any person, business, or entity requesting TIF assistance from the City or
EDA.
“Pay-As-You-Go Financing” – a TIF financing structure in which increment is paid to the developer
periodically, only as and to the extent it is generated and collected, as opposed to funding assistance with
public debt issued in advance.
“TIF District” – a tax increment financing district established under the TIF Act, including redevelopment,
renewal and renovation, housing, economic development, and other district types authorized by law.
“TIF Plan” – the tax increment financing plan for a TIF District, adopted in accordance with the TIF Act.

3. Eligible Uses and Targeted Development
The EDA may consider TIF assistance for private development only where the proposed project includes one or
more of the following targeted uses:
•
•
•

•

•
•

Industrial and manufacturing development or redevelopment.
Research and development, and office/industrial corporate headquarters uses.
Residential development or redevelopment, where the use satisfies the “but for” test, is located within or
adjacent to the City's designated Downtown area, and expands housing choice (including affordable,
workforce, or senior housing).
Commercial and retail uses of general City-wide benefit, where the project (i) is part of an adopted
redevelopment plan or otherwise satisfies the criteria for a redevelopment TIF district; (ii) results in a net
gain of ten (10) or more new full-time jobs; and/or (iii) significantly enhances the appearance, character,
or quality of the Downtown consistent with the Comprehensive Plan or Downtown Plan.
Removal of blight, deteriorated or obsolete buildings, or correction of substandard soil conditions.
Public infrastructure necessary to serve a redevelopment or economic development site (streets, utilities,
parking, or similar improvements).

4. Eligible TIF Expenditures
City of Forest Lake — Tax Increment Financing Policy (Draft)

Page 1

31

Project costs qualifying for TIF assistance are governed by the TIF Act, and generally may include land
acquisition, demolition, site preparation, soil correction, public utilities, parking facilities, streetscape and
landscaping improvements, and related design, engineering, and administrative costs. The City and EDA will
prioritize TIF expenditures in the following order:
Removal of deteriorated or obsolete buildings.
2. Public streets and utilities, which may include the write-down of publicly owned land.
3. Soil correction.
4. Site improvements (parking, lighting, landscaping).
5. Site grading.
6. Land write-down.
The City and EDA will retain a maximum of ten percent (10%) of any tax increment received from a district to
reimburse administrative costs, consistent with the TIF Act.
1.

5. Financing Structure
The City and EDA generally have three financing structures available: (i) bonding or other debt, which is most
advantageous to the developer but carries the greatest risk to the City; (ii) pay-as-you-go financing, which is the
lowest-risk structure for the City because increment is paid only as generated; and (iii) loans, which may be
structured under either approach but require repayment of proceeds to the City or EDA. The following guidelines
apply:
•
•
•

•
•

Pay-as-you-go financing is the City's preferred structure and will be used unless the EDA determines
another structure is warranted.
The City and EDA generally desire at least as much private equity in a project as the level of public (TIF)
financing.
Public financing will generally be limited to no more than fifteen percent (15%) of total project cost for
economic development projects, and twenty-five percent (25%) of total project cost for redevelopment
projects, consistent with benchmark practices among comparable Minnesota cities.
TIF Districts will be limited to the minimum term necessary to meet the project's financing needs.
If public financing needs exceed the tax increment reasonably expected to be generated within the
corresponding TIF District, the City and EDA will evaluate other funding sources before increasing the
level of TIF assistance.

6. Project Evaluation — Benchmark Criteria
Some evaluation criteria are necessarily subjective. Where possible, however, the City and EDA have established
benchmark criteria, consistent with practices used by comparable Minnesota cities, to provide consistent, uniform
review. Meeting a benchmark does not entitle a project to TIF assistance; it allows the City and EDA to compare
proposals using consistent standards.
•

•
•

•

Private-to-Public Investment Ratio: a benchmark of at least three (3) parts private investment to one (1)
part public (TIF) assistance for industrial and economic development projects. Housing and
retail/commercial projects will be evaluated individually given differing capital structures.
Debt Service Coverage: TIF-assisted projects should generally demonstrate a debt service coverage ratio
of at least 1.2:1 (funds projected to be available compared to funds required for debt service).
Job Creation: industrial and economic development projects should demonstrate a minimum net gain of
new or retained jobs proportionate to the level of assistance requested, consistent with the wage and job
standards of the City's Business Subsidy Policy. Housing and retail/commercial projects will be evaluated
individually.
Tax Base Impact: TIF-assisted projects should generally result in at least a 1:2 ratio of property taxes paid
before and after redevelopment, recognizing that this ratio will vary based on individual site and
assessment circumstances.

City of Forest Lake — Tax Increment Financing Policy (Draft)

Page 2

32

•

•

•
•
•

•

Land/Property Price: TIF assistance will not normally be provided where the acquisition price of land or
property exceeds fair market value, as determined by an independent third-party appraisal, by more than
ten percent (10%).
Non-Speculative Development: TIF will not normally be used to support speculative industrial, office, or
commercial projects, defined generally as projects with signed letters of intent or pre-leasing for less than
fifty percent (50%) of available leasable space.
Financial Guarantees: the developer should provide adequate financial guarantees for repayment of any
TIF assistance, which may include assessment agreements, letters of credit, or similar security.
Developer Capacity: applicants should demonstrate successful past development experience and specific
capability appropriate to the type and scale of the proposed project.
Ownership Commitment: the developer should retain ownership of the project at least long enough to
complete construction, stabilize occupancy, establish project management, and initiate repayment of any
TIF assistance.
Minimizing Public Assistance: the level of TIF assistance should be reduced to the lowest level necessary
by first maximizing private debt and equity, and then other funding sources, before increasing TIF
assistance.

7. Project Approval Standards
In addition to the benchmark criteria above, all projects considered for TIF assistance must satisfy the following
minimum standards. Meeting these standards does not guarantee approval and creates no contractual right to
assistance on the part of any applicant or developer:
•

•
•

•
•
•

•
•

The project must be in conformance with the City's Comprehensive Plan, any applicable small area or
Downtown Plan, and the City Code, or required amendments to the plan or code must be under active City
consideration at the time of approval.
TIF assistance will not be provided to projects that have the financial feasibility to proceed without TIF,
and will not be used solely to increase a developer's profit margin.
The developer must demonstrate market demand for the proposed project through market and financial
feasibility studies, appraisals, soil borings, and other information requested by the City or its financial
consultants.
TIF will not be used where it would confer a significant, unfair competitive financial advantage over
similar, unassisted projects in the area.
TIF will not be used where the developer's credentials — including past project completions, general
reputation, financial history, or bankruptcy — are inadequate in the sole judgment of the City.
TIF will not be used to support projects that place demands on City services or capital/operating
expenditures exceeding those typical for similar facilities, considering total public costs including offsite
facilities.
TIF will not normally be used for projects that would create significant adverse environmental impacts, in
the opinion of local, state, or federal authorities.
Projects involving the displacement of low- and moderate-income residents must specifically address the
re-housing needs of those residents as part of the TIF funding proposal.

8. The “But For” Test
Before creating or amending a TIF District, the EDA and City Council must find, as required by the TIF Act, that
the proposed development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future, and that the increased market value estimated to result from the development would
not occur without TIF assistance. In evaluating this finding, the City and EDA will consider whether:
•

The site has been targeted by the City or EDA for redevelopment based on documented needs and adopted
policy.

City of Forest Lake — Tax Increment Financing Policy (Draft)

Page 3

33

•
•
•
•

Development obstacles — such as deteriorated or obsolete buildings, or poor soil conditions — are
demonstrable characteristics of the site.
Public infrastructure necessary to serve the site or a larger targeted area is not otherwise funded.
Land acquisition costs are elevated due to a specific public strategy or need.
The public financing fills an identifiable financing “gap” caused by factors such as inadequate private
lender financing or below-market projected return on investment.

9. Application, Review, and TIF District Procedure
9.1 Application Requirements
An applicant must submit a completed City TIF application, together with the required application fee and escrow
deposit established in the City's Fee Schedule, a project description, preliminary site plan, building elevations,
landscape plan, and a description of the applicant and proposed financing structure. The applicant must also submit
any market and financial feasibility studies, appraisals, soil borings, and lender information requested by the City
or its financial consultants.
9.2 Procedure
A completed application and required deposit are submitted to the City.
The proposed project is presented to the EDA. If the EDA wishes to proceed, it authorizes staff and/or
consultants to prepare a new or amended TIF Plan, or a redevelopment agreement if the project is within
an existing district.
9. The EDA approves a preliminary plan and requests that the City Council call a public hearing on the
proposed TIF District/Plan.
10. The Planning Commission adopts a finding that the proposed use is consistent with the Comprehensive
Plan.
11. Notice of the proposed TIF District/Plan is provided to Washington County and the affected school district
at least thirty (30) days prior to the public hearing, and published notice of the hearing is provided as
required by law.
12. The City Council holds the required public hearing and approves or disapproves the TIF Plan/District; if
approved, the district is certified with Washington County and the State of Minnesota.
13. City staff and/or consultants prepare a Contract for Private Development identifying the responsibilities of
all parties; the EDA reviews and recommends the contract to the Council for final adoption.
14. Construction may not commence until the Council and EDA have approved the TIF District/Plan and
executed the corresponding development contract.
9.3 Reimbursement of City Costs
The City and EDA will be reimbursed by the applicant for all reasonable costs associated with reviewing the
application, approving a TIF District/Plan, and negotiating and executing a development contract, including legal,
financial advisory, and administrative costs, whether or not the project or financing is ultimately approved or
completed.
7.

8.

10. Compliance and Reporting
All TIF assistance is subject to the reporting, disclosure, and public hearing requirements of the TIF Act and,
where applicable, the Business Subsidy Act. Recipients of TIF assistance that constitutes a business subsidy must
enter into a subsidy agreement consistent with the City's Business Subsidy Policy, including measurable job and
wage goals, a statement of public purpose, and recourse provisions for failure to meet stated goals. The City may
require a recipient to retain a trustee or independent arbitrage consultant where applicable.

11. Reservation of Rights and Amendment

City of Forest Lake — Tax Increment Financing Policy (Draft)

Page 4

34

Meeting the criteria and standards of this Policy creates no contractual right to TIF assistance for any applicant or
developer. The City Council and EDA reserve the right to approve, deny, condition, or withdraw preliminary
approval of any TIF request in their sole discretion, consistent with applicable law. The City may amend or waive
any provision of this Policy at any time; amendments are subject to any applicable public hearing requirements
under the TIF Act or Business Subsidy Act.
This Policy supersedes the City's prior Tax Increment Policy (City Exhibit 360) upon adoption by the City Council.

City of Forest Lake — Tax Increment Financing Policy (Draft)

Page 5

35

STAFF REPORT
MEETING DATE:August 3, 2026
TO:

President Leif Erickson and EDA Members

STAFF ORIGINATOR:

Abbi Wittman, Community Development Director

AGENDA ITEM:

EDA Marketing and Communications

______________________________________________________________________________
INTRODUCTION:
In June the EDA reviewed its 2027 budget proposal. At that time the EDA discussed the possibility of
expanded marketing efforts the EDA might want to engage in (i.e. digital billboard presence, developer
toolkits, etc.). Discussion surrounded around trying to determine if there was opportunity to conduct
some of these activities in 2026 and/or budget for these services in 2027.
Since the meeting, staff has met with Commissioner Grindahl regarding a Citywide Strategic
Communications strategy. A portion of this would include EDA-specific activities to create a
Development Pitch Kit that includes:
-

2026 ($6,000)
o Refreshing the EDA’s Investinforestlake.com website
o Updating the digital billboard ‘Come Grow with Us’ campaign
o Creating a professional developer pitch deck with supporting print materials (including a
financial incentives flyer)

-

2027 ($12,000)
o Three-minute video teaser and YouTube compatible video presentation
o Corresponding social channels

ANALYSIS:
The EDA’s 2026 workplan does not include new developer-related marketing. However, costs associated
with this work could be absorbed in both the 2026 and 2027 budgets. Staff believes there is a need to
conduct some of this activity – include refreshing the EDA’s website, updating the billboard campaign,
and creating additional materials for developer engagement. All of this said, however, City procurement
policy does require the City obtain three quotes for service.
RECOMMENDATION:
Staff recommends the EDA discuss this matter and provide direction to staff regarding 2026 and 2027
EDA communication strategies.
ATTACHMENTS:
N/A