Tax-Exempt Review Committee - July 28, 2020 Minutes
TAX EXEMPT REVIEW COMMITTEE
Fargo, North Dakota
Regular Meeting Tuesday, July 28, 2020
The July meeting of the Tax Exempt Review Committee of the City of Fargo, North Dakota was held in the City Commission Room at City Hall at 1:00 p.m., Tuesday, July 28, 2020.
The committee members present or absent are:
Present: Dave Piepkorn, Bruce Grubb, Jim Gilmour, Mike Splonskowski, Mayor Tim Mahoney, Jessica Ebeling, Kent Costin, Robert Wilson, Jackie Gapp, Ryan Aasheim, Joseph Raso
Absent: Levi Bachmeier, Jim Buus, Erik Johnson, John Cosgriff
Commissioner Piepkorn called the meeting to order at 1:00 p.m.
Minutes Approved
A motion was made by Kent Costin to approve the minutes from the June meeting held on June 23, 2020. Jessica Ebeling seconded. Motion carried.
Application for PILOT for PRx Performance
Jim Gilmour explained that this was on the agenda last meeting, however they are expanding the previous plan that was presented. They are now looking at 170,000 square feet.
Bryan Brasch said they heard of a manufacturing plant that was closing down and they contacted them to see if they would be interested in working for PRx. They made an offer to the General Manager, who accepted the position, will bring 10 of his key employees. They will be brought on October 1. The new employees will work other jobs until the plant opens in about a year.
Ryan Aasheim presented analysis on some of the secondary impacts. Based on Implan, an economic modeling tool, out of the 99 jobs created by PRx, it will result in 57 indirect and induced jobs. The impact will be 156 jobs. Compensation will total $2.6 million in payroll. Direct and induced annual sales in our region will be approximately $17.9 million. The construction phase will add 87 jobs that will support 67 other direct and induced jobs throughout the community. Construction will have a direct impact of $14.2 million and support $7.7 million in indirect and induced sales and other sectors. The tax impact to the City of Fargo for one time construction will be $55,000 in new tax revenue (i.e.: sales tax, property tax from employees purchasing homes), operations of PRx amount to $36,000 each year, after 10 years of operating at full capacity the project will have generated nearly $600,000 in tax revenue. Ryan will be emailing the additional information.
Kent Costin moved to approve the motion with Jackie Ebeling seconding. Motion Carried.
New Industry Aplication by AdShark Ventures, LLC
This will be moved to the next meeting due to a family health issue.
New Industry Application by Access Point Technologies EP Inc.
Jim Gilmour gave an update that the planned location wasn’t working out.
Sean Carroll – Company President via phone shared that they are a medical device manufacturing company out of Rodgers, Minnesota that provides Map-IT catheters to the industry. They are doing development on a next generation product and the work that would be done in Fargo would be for the new system. APT will start by leasing a facility, they are currently looking at 4 spaces in Fargo. They will begin small but anticipate growing over the years. The plan includes 4 jobs in the first year, with pay of $35+ an hour.
Jim Gilmour thought the higher pay would result in a higher score, however, because it is only 4 jobs and a weighted scale is used, they didn’t score as high. The value of the space they would lease would be $417,000 in value with a tax savings of $5,700 a year over 5 years. The exemption will be less than $30,000 for some very high paying jobs and a company that has tremendous potential for growth.
Mike Splonskowski explained that the weighted average was taken from the manual, taking salary points, using the weight for the number of jobs, jobs below ten people equal 20% of the 30 points.
It was decided that an interim meeting would be held with on-line participation if needed, once Access Point Technologies has found a space.
Report from the Greater Fargo-Moorhead EDC on economic activities and the Growth Initiative Fund
Joe Raso presented on how all economies work, EDC & Partners, Growth Initiative Fund Projects and economic impact to city and businesses.
Four Economic Inputs to the regional economy
1. Transfer Payments – retirees, government
2. Tourism
3. Higher Education money
4. Primary Sector
What the EDC does: The goal is primary-sector job creation. They support recruitment, retention and expansion of the primary-sector companies. Primary-sector companies export a majority of their goods and services outside the trade area and bring new wealth into the region.
The EDC partners with Valley Prosperity Partnership, Fueling Our Future, Emerging Prairie and there are a number of others.
The Growth Initiative Fund was started back in the early 90’s. Over the history 237 projects have been supported. They have a loan loss rate of only 1-2%. In 2019 they helped 29 different companies’ complete projects in the region. This in turn directly or indirectly helped other companies in the area.
Since 2015 the EDC has received $75,000 of investment from the City of Fargo. A conservative estimate of the taxes provided to the City because of the EDC assisted projects has been $10.22 million. This is a return of $136 for each $1 invested.
Dave Piepkorn adjourned the meeting at 2:06 pm.