Tax-Exempt Review Committee - April 27, 2021 Minutes
TAX EXEMPT REVIEW COMMITTEE
Fargo, North Dakota
Regular Meeting Tuesday, April 27, 2021
The April 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, April 27, 2021.
The committee members present or absent are:
Present: Dave Piepkorn, Mayor Tim Mahoney, Bruce Grubb, Jim Buus, Jessica Eberling, John Cosgriff, Jackie Gapp, Mike Splonskowski, Erik Johnson, Jim Gilmour, Joe Raso
Absent: Levi Bachmeier, Kent Costin
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 March 23, 2021. John Cosgriff seconded, motion carried.
Application for TIF for Drekker Brewing
Jim Gilmour stated that the City Commission approved a change where the TIF’s would begin with the Tax Exempt Review Committee. The role of the committee will be to look at the financial request that is made and decide if it is acceptable.
Mark Bjornstad, President and Co-Owner of Drekker Brewing Company did a brief presentation of the project and their vision. The new building would be a Food Hall, Community Market, Event Space, Conference Center, Experience Focused Lodging and Residential Living that would connect to the current Drekker Brewing Building. It will be a 100,000 square foot building that will allow for market space, event space, pop-ups and studios. It will have 375 + parking spaces and provide a Campus Community. It will have a $17 million annual economic impact with $1 million+ in annual sales tax.
Jim Gilmour stated that the current parcels are valued at $309,000 and there may be another valued at $200,000, around a half million dollars and 1.4% of that a few thousand dollars in property tax. When this is complete it is expected to be a $15 million increase in value, property taxes after the TIF expires in ten years would be around $208,000 a year.
Matt Schnackenberg from PFM Financial Advisors, LLC stated that on policy 6, the reimbursement for the land acquisition is limited and comes in a little bit under what they are requesting, but he still assumed the full $1.5 million for his analysis. This request was a little different in that there will be an operator of the project and they will be leasing it and paying lease payments to the developer. The lease payments are what will be the revenue of the TIF project. The developer is putting down twenty percent, with a twenty year loan.
Mayor Tim Mahoney moved to approve, Jessica Eberling seconded, motion carried.
Review of Tax Exemption Policy
Jim Gilmour stated that the current goals and objectives of Fargo’s current tax policy are (1) Low Income Housing, (2) Remodeling/Improvement of Current Structures, (3) New Single Family Housing, (4) Economic Development + Job Creation, (5) NDSU Area Housing & Redevelopment, (6) Downtown Redevelopment, (7) Brownfield Redevelopment and (8) Public-Private Partnership TIF Districts.
Jim is suggesting that the new format for the policy be the following: (1) Support for affordable housing, (2) Encourage remodeling and expansion of older structures to encourage infill redevelopment, (3) Encourage the construction of new single-family and owner-occupied housing, (4) Encourage economic development , creating new jobs and capital investment, (5) Encourage redevelopment of new housing adjacent to NDSU, (6) Encourage downtown redevelopment, especially new housing, (7) Encourage redevelopment of brownfield sites and (8) Public-private partnerships with public amenities.
Today, Jim wanted to focus on (2) Encourage remodeling and expansion of older structures to encourage infill redevelopment and (3) Encourage the construction of new single-family and owner-occupied housing. Right now for any housing in town there is either a three or a five year exemption for remodeling, between 25-39 years it is a three year exemption, anything over 40 years is a five year exemption, state law does allow for anything over 25 years to qualify for the five year exemption. As a way to encourage even more remodeling, we would like to give anything over 25 years the five year exemption. The other change would be with commercial, currently anything downtown is five year. We are looking to go five year city wide to encourage older buildings to remodel, also to include building additions. Is there a limit, where we would want to put a cap on it?
Dave Piepkorn stated that adding the addition could be complicated.
The Mayor suggested that anything over 100% of the present value would be looked at by this committee.
Jim asked the committee to make a motion to go to City Commission with these changes, but limit additions to no more than 100% of the existing value of the building.
Mayor Tim Mahoney moved to approve, Jim Buus seconded, motion carried.
The meeting was adjourned at 2:05 pm.