Economic and Development Incentive Committee- July 23, 2024 Minutes
ECONOMIC AND DEVELOPMENT INCENTIVE COMMITTEE
Fargo, North Dakota
Regular Meeting Tuesday, July 23, 2024
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, July 23, 2024.
The committee members present or absent are:
Members Present: Dave Piepkorn, Mayor Mahoney, Jon Eisert, Erik Barner, Lucas Paper, Matt Schlenvogt, and John Cosgriff.
Others Present: Robert Wilson, Jim Gilmour, Jackie Gapp, Michael Splonskowski
Others Absent: Levi Bachmeier
Commissioner Piepkorn called the meeting to order at 1:00 p.m.
Minutes Approved
A motion was made by John Cosgriff to approve the minutes from June 25, 2024. Matt Schlenvogt seconded. Motion carries.
Minneapolis Federal Reserve – Housing Presentation
• Fargo population is growing and is up 16%
• Homeowner rate is up 45% due to younger and retired people.
• Fargo housing cost are up 27%
• ND Housing:
o Housing growth is keeping up with population growth. North Dakota has largely avoided underproduction.
o Home values and rents are rising, but less than nationally and neighboring states.
o Housing affordability is falling in North Dakota and homes are becoming more unaffordable in some metros.
• Homelessness is a housing problem. Prices of rent is more predicative of homelessness rates than poverty levels, weather, and the rate of drug addiction or other mental health issues.
• Fargo needs more housing for senior citizens and disabled people.
• Mayor Mahoney stated that Fargo needs to do 15,000 living units in the next year. This year there at about 500.
• Jim Gilmour stated that we need to work together which would mean that the city would need to support affordability, increase supply, and streamline processes and rules.
Inclusionary Housing Report
• Is there a way that the city can require developers, either with or without incentives to create some sort of inclusionary housing?
• In a hot housing market, they will look at the 60% of the medium income and want you to have at least 10% of your housing units below $960 a month. Fargo median rent is $1,000 compared to $1,500 in the Twin Cities.
• People that have 60% median income can afford over 90% of the apartments in Fargo.
• Jim Gilmour stated that he does not think that Fargo need an inclusionary housing requirement to go with the city’s incentives. Commissioner Piepkorn stated that this is something we need to monitor for the future.
• Is accessibility required for apartments if you have a certain number of units? Jim Gilmour will look into this.
Bison Block Report
• 1400 Block of 12th Avenue North
• 3-Story building
• Commercial businesses on the main floor
• 34 apartments of floors 2 and 3
• Design requirements and redevelopments were discussed
• TIF Financing
o Without incentives, the rate of return would be less than3%. With incentives, the rate of return was estimated at 11%.
o TIF assistance was provided over 15 years and the city agreed to reimburse the developer with the cost of: land write-down, demolition of houses, and utility hook ups.
• Financial benefits were discussed.
Growth Plan and PILOT Program Change
• The PILOT program consists of four different ways to be used:
o New jobs
o Low income housing
o Housing downtown
o Housing in the core neighborhoods
• The proposed policy would add a fifth option. A redevelopment of an infill site.
• Should the city consider applications that would involve tearing down something with relatively low value, not blighted, and in return give back something more in the future?
• New Redevelopment Infill:
o Years 1-5: 100% exempt on the increased value of improvements
o Years 6-15: The percentage exempt will be based on a financial review and “but for” test. The amount exempt will be no more than 90% of the improved value.
o Financial plans will be reviewed by the City financial consultant.
Discussion:
Jim Gilmour discussed the current downtown housing guidelines. He also brought up that the PILOT term would be 17 years instead of 12 years. The committee will take a look at the new guidelines and will give feedback at the next meeting.
PILOT Application for an Affordable Housing Project
• Dan Madler- Beyond Shelter
o Developed 580 affordable rental homes- 406 are affordable senior rental homes- 81 are ready for occupancy in 2024
o Most recent development is the Plaza Apartments (Old K-Mart)- July 11th people can start moving in.
o Current demand for affordable rental housing for seniors. 39 units are leased and 172 on waiting list.
• 65th Ave S
o Two 39-unit apartment buildings
o Multiyear 2 phase project
o 20% of the 78 units will be fully handicap accessible
• Requesting a 17-year pilot $0 payment
A motion to forward the recommendation to the city commission was made by Mayor Mahoney and seconded by Matt Schlenvogt. Motion carries.
The meeting was adjourned at 2:03 pm.