Reporter’s Notebook: Communities in Conversion

Briana Bierschbach

Editor’s note: “Reporter’s Notebook” is an occasional blog that will feature worthwhile content left out of a news story.  It will also give reporters an opportunity to talk about challenges they faced while working on a story.  

A closer look at tax-increment financing:

Tax-increment financing, also called TIF, is a method of paying for city development, in lieu of ever-dwindling federal dollars, in areas that might not otherwise be improved. There are currently thousands of TIF districts operating nationwide, from small and mid-sized cities, to  a large portion of the state of California, which invented tax-increment financing in 1952. Arizona is the only state without a tax-increment financing law.

In 2008, the Minnesota Legislature passed special law allowing the city of Minneapolis to establish a  tax increment financing (TIF) district comprising all the city’s oldest TIF districts. The  Legislation specified that funding from these districts would go to paying debt on the Target Center as well as a source of funding for neighborhood revitalization activities. 

Target Center debt: 

The Target Center facility was completed in 1990. The city purchased the facility from the owner of the Timberwolves in 1995, thus taking on any debt and repair payments.  As the facility has aged, the financial burden of maintaining it as a "premier sports and entertainment venue" – as stated in the city’s contract – has continued to increase.

Here’s how the numbers add up:

1. Debt – $59,850,000

2. Capital improvements – $37 million

Add this $100 million to anticipated interest and the burden of maintaing the building as a "premier" sports and entertainment venue and the total racks up to $120 million over the next decade, according to city documents.