Tax Increment Financing (TIF) is one of the few public finance tools available to municipalities in the State of Minnesota. The use of TIF has been governed by State Law since the late 1970s. Edina has used TIF as an economic development tool for several decades. The use of TIF is a two-step process:

1. Establishing a TIF District
2. Funding a public or private project using TIF monies. Sometimes Steps 1 and 2 occur simultaneously although it is not unusually for the Steps to occur separately in large-scale, multi-phased projects.

Following Establishment

TIF Districts are established based on the authority, limitations and provisions contained in Minnesota State Law. New TIF Districts are considered by the City of Edina when they can help achieve community goals. Each TIF District is evaluated on its own merits. After a TIF District has been established, the City can then consider whether and to what extent it participates in funding a private project or public improvement with incremental tax revenue collected in the TIF District.