Tax-Exempt Review Committee - August 24, 2021 Minutes
TAX EXEMPT REVIEW COMMITTEE
Fargo, North Dakota
Regular Meeting Tuesday, August 24, 2021
The August 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, August 24, 2021.
The committee members present or absent are:
Present: Dave Piepkorn, Mayor Tim Mahoney, Bruce Grubb, John Cosgriff, Kent Costin, Mike Splonskowski, Erik Johnson, Jim Gilmour, Jackie Gapp
Absent: Levi Bachmeier, Jim Buus, Jessica Ebeling, Joe Raso
Commissioner Piepkorn called the meeting to order at 1:00 p.m.
Minutes Approved
A motion was made by Mayor Tim Mahoney to approve the minutes from June 22, 2021. John Cosgriff seconded, motion carried.
2021 TRC Policy Clean
Jim Gilmour stated that with the agenda a cleaned-up version of the Tax Exempt Review Committee Policy was sent out. It is still in need of a little more clean up.
Summary of Changes
• Primary Sector Economic Development
• Remodeling
• Residential New Housing
• Core Neighborhood Housing
• Tax Increment Financing – Brownfields
• Downtown Housing
• Lower Income Housing
• Public Private Partnerships
Primary Sector Economic Development – The policy more clearly states that we are only assisting primary sector businesses. The criteria has changed in several ways, one being looking at job creations in year one and year three. A criteria was added to look at the companies’ safety record as suggested by some of the commissioners. Some criteria was adjusted on the building value, the approval must proceed the start of construction or signing a lease, added factors for when exemptions beyond five years will be considered. Working with the city attorney to develop a form or agreement to expand the current one.
Remodeling Exemption – The policy would change so that everyone would qualify for the five year exemption. The committee would need to review building additions that exceed the current value of the building.
New Residential Housing – No changes proposed
Core Neighborhood Housing – Applications no longer limited to University Mixes Use Zone, generally limited to a 10-year exemption, projects with affordable housing could receive a maximum 20-year 100% exemption.
Tax Increment Financing – Brownfields – Sites must have brownfield, blight or slim conditions (definitions added). Initial review is by the committee.
Downtown Housing – If affordable housing is included, the exemption may be 100% for up to 20 years.
Lower Income Housing – The “but for” test is no longer required for projects that include Low Income Housing Tax Credits. (A financial review is already conducted by the ND Housing Finance Agency)
Dan Madler explained that all Low Income Housing Tax Credits go through a thorough review by the ND Housing Finance Agency called a QAP (Qualified Allocation Plan), it is 24 pages of criteria based off of information that they need and are targeting and within that there is a thorough financial review.
Dave asked Dan if they would be willing to provide that report to the Tax Exempt Review Committee and he said absolutely they would.
Jim Gilmour also brought up if the name of the committee should remain the Tax Exempt Review Committee or should it be the Economic Development Committee?
Dave suggested Economic Growth Committee. John Cosgriff suggested Economic Partnership Committee.
Public Private Partnerships – Examples: Horse Park, Industrial Park, Downtown Parking Ramps and P3 Developments, Riverfront Development Plan
Policy – Plan development must be initiated by the Fargo City Commission, the plan includes public facilities, public activities, incentives that are essential for the development. Development would not otherwise occur without the Public Private Partnership. City financing may include tax increment financing and/or other city funds.
Application for PILOT for Beyond Shelter, Inc
Jim Gilmour stated that this is an application for senior housing as part of the Kmart redevelopment. If it doesn’t have city support they won’t be competitive and probably won’t receive the money. Beyond Shelter would be done in two phases. The housing portion would be back around the former Kmart building site.
Dan Madler, CEO of Beyond Shelter Inc. stated that they don’t have any photos they are still working on that part. They are working with Enclave Development. The site is approximately 10.8 acres, they would be looking at 4 acres for multi-family use. There would be a total of 96 units in two phases. Each phase would be 48 units the buildings will be connected. There is healthcare in the area, there is a bus stop on that site and banking is close by.
Beyond Shelter will soon have a total of 325 affordable units serving the community of Fargo. The vacancy rate in 2020 for senior units was 2.31%, right now for 2021 it is tracking at 1.75%, there is a demand for senior housing in Fargo. This project will include 39 one-bedroom units and 8 two-bedroom units, it will have a community room, craft/recreation room, fitness room, computer lab, outdoor patio area, detached garages, and residential support. It will be a 62+ age building, 20 designated units for extremely low income.
John Cosgriff moved to approve, Kent Costin seconded. Motion carries.
Application for PILOT for Prairie Ridge 4, LLLP
Jim Gilmour explained that this is another Senior Housing project. They are applying for 4% low income tax credits which are much less competitive, they are not as valuable, which makes it difficult to get into the very low income housing units. The site is located north of 13th Avenue and East of I-29, south of the Cass County Jail. The proposal is for 120 low income housing units for seniors. Company is located in Billings Montana and would be doing it in partnership with a company out of Bismarck. It would be for a 17 Year Property Tax Exemption.
Donald Sterhan, President of Mountain Plains Equity Group stated that their company was formed in 2003 as a joint venture between the NDHFA and their counterparts in Montana and Wyoming, they came together to create Mountain Plains Equity Group, their purpose was to syndicate Tax Credits. They have 13 projects in ND that they have helped finance, 5 of those are for seniors.
They will be teaming up with Community Works of ND. The building will be 120 units, designed in a U-shape with three stories, providing for socialization and interactivity for seniors. It will include common space, fitness room, craft room, library, and media room to develop a comradery amongst seniors. It is a 4% Tax Credit Project, so they don’t have to compete for the tax credit. The size helps finance the project with a lower amount of equity. Targeting seniors 55 and older, parking will be on-site underground. The site is 3.1 acres. There is a bus stop on the corner of the location.
John Cosgriff moved to approve, Bruce Grubb seconded. Motion carries.
The meeting was adjourned at 1:50 pm.