City aims to soften tax loss from school district’s purchase of UNFI building

Eden Prairie Schools’ proposed purchase of a 165,000-square-foot office building from United Natural Foods Inc. (UNFI) would take the building off the property tax rolls. But, Eden Prairie city officials say they have softened the loss by negotiating the school district’s payment of roughly $300,000 to the city, or about 10 years’ worth of city taxes.

The arrangement disclosed by City Manager Rick Getschow came as the Eden Prairie City Council on April 16 tentatively approved a formal land-use change that would allow Eden Prairie Schools to use the UNFI office building at 11840 Valley View Road as a new base of operation for its TASSEL Transition program and an alternative learning center.

The land-use change – from office to school use – also needs approval from the Metropolitan Council. It applies only to the eastern 61 acres of the UNFI property sought by Eden Prairie Schools, including the existing office building. Developers are separately looking to purchase the western side, about 46 acres, for possible hotel and apartment construction as well as open space.

Getschow noted that the west side, if privately developed, would also provide property tax revenue for the city, county, school district, and other taxing authorities.

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Hennepin County records show the overall 107-acre UNFI parcel had a total property-tax bill of a little more than $378,000 for 2024.

Getschow said the provision requiring the school district to pay the one-time amount of about $300,000 would be included in the city’s final approval of the land-use change, anticipated to come before the city council in a couple of weeks.

Eden Prairie Schools did not attend the April 16 city hearing, and no public testimony was offered.

The district’s plan was also reviewed at length and endorsed on March 25 by the city’s planning commission, which advises the city council.

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Although school officials have not disclosed the property’s purchase price, Dirk Tedmon, its executive director of marketing and communications, outlined to the planning commission the tax impacts of the district’s purchase of UNFI property.

“The district was able to, through its lease levy purchase authority, get this at a cost of less than a dollar a month to taxpayers, so the tax on a $550,000 home is only $11 a year,” he testified at the commission’s hearing on the matter. “There is not going to be a major tax impact in the immediate term to people.” 

Down the road, Tedmon added, the district may engage the community to see what additional facilities are needed in the building to serve future students. “From that, there may be future bond referendum campaigns if there’s additional funding needed for those facility upgrades,” he said.

TASSEL, which stands for Teaching All Students Skills for Employment & Life, is a post-high school choice program for students ages 18 to 22 who have special learning needs. They receive special education programming, skill development, and job support, usually in one-on-one scenarios.

The TASSEL Transition program has been housed in rented space in the west end of the Eden Prairie City Center, the city hall building at 8040 Mitchell Road. However, the city plans to turn that space into new and expanded quarters for its Police Department and the department’s vehicle fleet.

A portion of the UNFI building’s lower level would be used as a centralized district warehouse, according to school officials, and the building would also be used as a gathering place for community events and staff development.

UNFI announced last April that, with many of its employees working remotely, it would put its 107-acre Eden Prairie business campus up for sale and relocate staff to a smaller regional office elsewhere in the Twin Cities.

The one-building Eden Prairie campus was established in the 1970s as the national headquarters for Supervalu Inc., a Fortune 500 company that Providence, Rhode Island-based UNFI purchased in 2018. UNFI made the campus its regional headquarters.