The Grand Forks School Board plans to vote on Jan. 25 on a group of development projects that would affect tax collections.
During a meeting on Monday, Jan. 11, the School Board heard from city officials, economic development leaders and developers seeking approval of a tax exemption plan that would affect four proposed redevelopment projects.
The plan involves the Beacon by EPIC, the Memorial Village on the UND campus, the Lyons Auto project on North Fourth Street and the St. John’s Block project on DeMers Avenue downtown. The projects, which have received preliminary Grand Forks City Council approval for tax increment financing, represent a total investment of $116 million in Grand Forks, said Todd Feland, Grand Forks city administrator.
Tax increment financing is one of a handful of incentives municipal governments have at their disposal to lure developers. Through a “TIF,” a developer fixes up or rebuilds a piece of land, making it more valuable and thus more taxable, but, for an agreed-upon period of years, pays property taxes as if they hadn’t touched it. When those years are up, the owner then pays property taxes as normal using the new, higher land valuation.
The $48.9 million Beacon project would replace the former Townhouse hotel with apartments, retail space and a plaza for public events. If approved, work would begin with groundbreaking on the first two buildings this summer, with groundbreaking for a third building in summer 2022.
Northridge Construction is proposing a $27.3 million project, across the street from City Hall at the Lyons Auto location, that would place several stories of office, retail and apartment space on the site.
A consortium of developers is planning to sink $7 million into renovation of St. John’s Block, and Burian and Associates is proposing a $25 million plan to replace UND’s Memorial Stadium.
North Dakota law requires that other taxing entities, namely the school district and the county, approve of such a plan that would reduce a developer’s taxes for more than five years.
The four projects before the School Board could be a touchy subject for school district leaders, who are weighing a facilities plan that could mean a voter-approved tax increase. How might residents feel about the district asking them for a tax increase while offering a tax break to a developer?
“As an elected official, you’re always concerned about perception,” Amber Flynn, the board’s president, told the Herald earlier in January. “But I think we're in this space in our community now where people want to step forward and help and they recognize that if we can make it possible for growth and development to happen then that's a possibility that we should explore.”