Tax-Exempt Review Committee - October 27, 2020 Minutes
TAX EXEMPT REVIEW COMMITTEE
Fargo, North Dakota
Regular Meeting Tuesday, October 27, 2020
The October 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, October 27, 2020.
The committee members present or absent are:
Present: Dave Piepkorn, Mayor Tim Mahoney, Jessica Ebeling, Jim Buus, John Cosgriff, Kent Costin, Bruce Grubb, Jim Gilmour, Mike Splonskowski
Absent: Jackie Gapp, Levi Bachmeier, Erik Johnson, Joe Raso
Commissioner Piepkorn called the meeting to order at 1:00 p.m.
Minutes Approved
A motion was made by Jim Buus to approve the minutes from September 22, 2020 and September 28, 2020. Jessica Ebeling seconded, motion carried.
Application for PILOT for EagleRidge Development
Jim Gilmour explained that this is an application for a 15 year PILOT from EagleRidge Development. We have never seen an application like this before and one has never been approved where it is more of a commercial development on the fringe of the city. However, when the policy was last updated the policy did provide that this type of application could potentially be eligible for up to a 100% exemption for years 1-10 and up to 75% exemption years 11-15. This project comes close, but may fall short of meeting 2 of the criteria required listed in the policy manual. Jim wanted input before it was put to the ‘but-for’ test. The policy states that new buildings will provide at least 40,000 square feet, equivalent in quality to Class A office with high quality exterior finish, it also states that it will provide small living units or elements of affordability. The EagleRidge building will have 32,000 square feet of commercial space, it will include apartments but the cost of the efficiency is expected to be $995 a month, so not the most affordable in town. Jim stated the fundamental question is: Do you feel the application meets the conditions of the significant commercial project and should it be sent to the financial advisor for review to see if it meets the ‘but-for’ test? If the committee doesn’t feel it meets the requirements, he would like a recommendation to not approve the application.
Jim Bullis, President/CEO of EagleRidge Development explained that this project is located behind the EagleRidge office park on Veteran’s, this is the second phase of a three phase project that involves $102 million in construction. They have worked with city planning to create a project that can be much denser for their benefit and hopefully the city’s. Jim continued, EagleRidge owns The Cedars across the street, if you were to put a similar property on this piece of land it would generate $27 million of taxable value, they think this property will be four times that. Building this way will also cut the special assessment costs from $3.84 down to $.92 a square foot. They are aware of the affordable portion of the project and they are fully prepared to talk about that.
Dave Piepkorn asked if they would be interested in getting some affordable housing projects included in this project.
Jim Bullis stated that they don’t know if they are made for Section 8 housing but they think they can hit the same spirit of Section 8 housing limits through HUD vouchers and some other things that they can work with city staff in order to accomplish.
Dave Piepkorn stated he would have a hard time approving the application as is, but if they could include some low income housing that would change the character of the project in his perspective.
Jim Gilmour stated that the best thing would be for them to consider if a certain number of rents have to be low enough to qualify for HUD vouchers or if they have a certain number of units that would not require the HUD vouchers but would require the rents to be lower than proposed. Jim also stated that it would be better to come up with a revised plan before moving onto the ‘but-for’ review.
Mayor Tim Mahoney made a motion to have the developers continue to work with city staff to get the project up to a ‘but-for’ evaluation, if they think they get it to that point then push it forward to the ‘but-for’ test. Jessica Ebeling seconded, motion carried.
Application for TIF for EOLA (“But-For” Test)
Jim thought this would be a good time to tell the committee a little about this project. The developer is acquiring four of the softball diamonds at Anderson Field. They are projecting a development that would be worth up to $150 million, the TIF request would be for money that would go towards a park, parking ramp, youth facility and some support for senior affordable housing.
Todd Berning with Epic Companies stated they are in the process of closing on the property. He said what you have in front of you is a starting point. They have committed to a 4 acre green space for public use. Their goal is to work with the park district and create as many amenities as they can. They are a HUD Developer and are on their third HUD Development. The Bank of North Dakota has also worked with them and is very interested in this new project. This will be a mixed use of commercial, apartments and condos.
Dave Leker, Executive Director for Fargo Park District, added that the adjacency to the complex and youth hockey along with the curling club and zoo could provide some nice attractions for the City of Fargo. It kind of puts everything in one spot. The Parks District is working on redesigning the existing baseball complex and is looking forward to working with Epic Companies on their development.
Todd stated that they envision some type of phased process with the TIF. The proposed parking ramp would be free to the public and be supported by the commercial and residential revenue streams. It would be right outside the back door of the Southwest Hockey Arena and would also help support parking for the curling club. Todd also stated this will be a collaboration and they will use different revenue streams with gaming, housing and grants. As far as the TIF goes they are flexible in the way it will be paid. Todd put 80/20 but he is not set on that, he stated it could be paid in chunks.
Dave Piepkorn adjourned the meeting at 1:33 pm.