Tax Exempt Review Committee - March 22, 2022 Minutes

ECONOMIC AND DEVELOPMENT INCENTIVE COMMITTEE
Fargo, North Dakota

Regular Meeting Tuesday, March, 2022

The February meeting of the Economic and Development Incentive Committee of the City of Fargo, North Dakota was held in the City Commission Room at City Hall at 1:00 p.m., Tuesday, March 22, 2022.

The committee members present or absent are:
Present: Dave Piepkorn, Mayor Tim Mahoney, John Cosgriff, Jessica Ebeling, Jim Gilmour, Deb Mathern, Arlette Preston, Prakash Mathew, Michael Splonskowski, Jim Buus, Steve Swiontek, Reid Middaugh, John Strand

Absent: Levi Bachmeier, Bruce Grubb, Kent Costin, Erik Johnson, Jackie Gapp, Joe Raso, Robert Wilson, Dean Brescani, Chad Peterson, and Nancy Morris.

Commissioner Piepkorn called the meeting to order at 1:00 p.m.

A motion was made by Dave Piepkorn to approve the minutes from February 22, 2022. John Cosgriff seconded, motion carries.

Proposals for 419 3rd St North

• TIFF assistance for 3 years
• Criteria #1- Proposed development is consistent with the downtown plan (preferably residential)
o Authentic Housing
 118 Units
 10 enclosed parking spaces
o Kilbourne Group
 115 Units
 152 enclosed parking spaces
• Criteria #2- Good design and quality of the project
• Criteria #3- Large amount of private investment
o Authentic Housing
 $40-50 million total investment
 Approximately 50% from housing bonds and approximately 50% form federal low income housing tax credits
o Kilbourne Group
 $25 million total private investment
• Criteria #4- Purchase price
o Authentic Housing
 Land at $0
o Kilbourne
 $162,964.00
• Criteria #5- Ability of the developer to implement the project
o Authentic Housing
 Has never developed a project before
 Incorporated 1/31/22
o Kilbourne Group
 Large number of downtown projects
 Active since 2006
• Criteria #6- Financial feasibility of development
o Authentic Housing
 Unknown
 No market study
 Unanswered financial questions
 Novel concept
o Kilbourne Group
 Successful track record with developing projects
• Criteria #7- Implementation to begin within one year and be completed within three years
o Authentic Housing
 Timeline is pending financial resources and development partner
o Kilbourne group
 Construction to begin in fall of 2022
 Open Spring of 2024
• Criteria #8- Experience with related projects and pas project history
o Authentic Housing
 Never developed a project before
o Kilbourne Group
o 6 past projects completed
• Next steps:
o Committee provides recommendation to FCC
o City Commission selects developer
o Final advisor the City of Fargo reviews incentives
o Development agreement prepared for the project
o City Commission approval of development agreement
• Questions:
o Arlette Preston: What is the background of the time frame?
 Jim Gilmour: Project that is ready to go within 1 year and completed within 3 years
 Prakash Mathew: Concerns of the people. There is a need but does not know if AH can afford it. Do they have the banking and can they handle the proposal?
 Tyrone (Authentic Housing): Finances- initially they were not required to provide letter of intent. Now they had 3 weeks. They need more time.
• City of Fargo- needs financial proof and needs parking
• Mayor Mahoney: Would like Housing Authority work with Authentic Housing on Burrell project.

A motion was made by John Cosgriff motion to recommend Kilbourne proposal #2. Mayor Mahoney seconded, motion carries.
8 YES / 2 NO. Motion carries.

A motion was made by Jessica Ebeling to have the Tax Exempt Committee to reach out and find other stakeholders within the city of Fargo to start some guidelines. Mayor Mahoney seconded, motion carries.
10 YES / 0 NO. Motion carries.

Proposals for 401 3rd Ave N

Minutes Approved

A motion was made by Dave Piepkorn to approve the minutes from February 22, 2022. John Cosgriff seconded, motion carries.

Tax Increment Financing

• Jon Casper- Alliance Management Group
• West Acres/Old Herberger’s
• 3940 13th Ave S
• 50,000 square feet retail with 160-180 apartment units
• Opportunity within the project to include public art
• Space has been vacant for 4 plus years

Questions:
• Dave Piepkorn- Will there be accessible parking and how many? And will there be covered parking?
o Jon- there will be underground parking. 90k square feet of internal parking. 1 parking space per bedroom. Will have to get back with details about accessible parking.
• Mayor Mahoney- How long is the TIF?
o Jim Gilmour- we have not run those numbers yet for the TIFF
• John Cosgriff- Is the current assessed value $700,000 for the property?
o Jon- The assessed value is around $4 million

A motion was made by Dave Piepkorn to approve tax increment financing for old Herberger’s property within West Acres Mall. John Cosgriff seconded, motion carries.

• If passed, the next steps would be:
o Rezoning
o Renewal plan (May-June)
o Talk with financial advisor

Co-Schedule
• 502 1st Ave
• Software company
• John Machacek- Fargo Moorhead Economic Development Chief Innovation Officer
o Previously worked with Co-Scheldule
o Spoke highly of Co-Schedule
• Justin Walsh
o Seeking a 5 year property tax exemption
o The only space the will be exempt is space that Co-Schedule will occupy
o Renaissance exemption will not be available as it was previously applied to this building.
o Flex base loan
o They have been in Downtown Fargo for 8 years at a various number of locations of downtown.
o Would like to put some additional dollars in downtown
o 1.5% of their revenue comes from North Dakota

A motion was made by Mayor Mahoney to approve the 5 year tax exemption. Jessica Ebeling seconded, motion carries.

Committee Membership

The meeting was adjourned at 2:21 pm.