GRAND FORKS – A proposal for an approximately 100,000-square-foot industrial building, which will be named The Exchange, and an accompanying Payment in Lieu of Taxes request was presented to City Council members during their Committee of the Whole meeting Monday at the HIVE.
The request comes from Enclave Companies, which seeks to build the three- to four-unit industrial facility on approximately 10.38 acres on 36th Avenue South in the strategic infrastructure growth area of I-29. The estimated value of the land is $850,000 and building improvements are estimated at $11 million.
The project will provide industrial building space for prospective industrial customers looking at the Grand Forks regional market. It's something Austin Morris, the joint CEO of Enclave Companies, highlighted when talking about the goal of the project.
He said markets south of Grand Forks – places like Fargo and Sioux Falls – have “probably a few million square feet” of industrial space available. Grand Forks’ access to I-29 is a plus for prospective clients, he said.
He added the hope is to be "competitive enough to attract tenants and drive additional volume of industrial (space) in the Grand Forks marketplace.”
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“We think this location is fantastic for that,” he said.
While the original request was for a 20-year 100% Payment in Lieu of Taxes (or PILOT) tax exemption, the city’s third-party financial adviser, Baker Tilly, suggested a property tax incentive that includes a 100% exemption for a five-year period.
City Council President Dana Sande suggested having a 10-year 50% PILOT in order to start collecting property taxes sooner.
“My thought is I would prefer to see us do a 10-year, 50% rather than a five-year, 100%. It works out essentially to the same, give or take,” Sande said. “It’s probably a little bit more in their favor because of the increase in property value over time. So they might get a little more benefit, but at least we’d be collecting 50% of the property taxes right away so that we can start getting money to the other taxing entities, and specifically to the school district that so desperately needs it.”
Morris said having taxes at year six is something Enclave Companies can “wrap our arms around” in regard to getting the building full of tenants along with the associated real estate tax expenses.
Since the PILOT exemption is currently not greater than five years, the Grand Forks School District and Grand Forks County would not have to approve the exemption. If a 10-year, 50% approach is pursued, those entities would need to approve the exemption.
The council gave preliminary approval to set a public hearing on May 15 for the application. In the meantime, council members will continue discussing Sande’s suggestion.
Also Monday, council members reviewed the plans and specifications for two projects in the downtown area. One is to reconstruct the Town Square fountain. A number of projects — including paint, lighting/wiring and pavers — were done last year, but repairs to the fountain haven’t been made.
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The city hired WFW to design a long-term solution. The proposed project will remove and replace the foundation for the ponds and update the piping and controls for the water features and water treatment. The total project is budgeted at $500,000.
Though Meredith Richards, the community development director, said the price tag is “shockingly large,” she said the funding is set aside for the project. Of the $500,000, $435,000 will come from Fund 2163 (proceeds from the sale of the Corporate Center I) and $65,000 will come from the Beautification Program.
“So while it necessarily wasn’t planned that we would spend half a million dollars on this element, we do have the funding for it,” Richards said.
An additional project includes improvements to Loon Park, a pocket park next to Ely’s Ivy. The project will entail removing and replacing the existing concrete paving stones and retaining wall in the park, addressing the drainage problem by re-shaping the grades and adding an area drain and replacing the street lights in the park. The engineer’s estimate for the project is $180,000, with funding coming from Fund 2163.
Council members gave preliminary approval for both projects.
In other news Monday, council members:
- Reviewed an engineering agreement with Bolton & Menk for design engineering services not to exceed $344,000 for intersection improvements on Belmont Road and South Fifth Street. The main focus of the project will be to reconstruct the intersection in a way that provides clearer direction to all users. At this time it’s anticipated a roundabout will be utilized for that intersection. The total cost of the project is estimated to cost $1,856,000. Approximately $1.31 million will come from federal funding via the North Dakota Department of Transportation.
- Considered a cost participation agreement with the Community Foundation of Grand Forks, East Grand Forks and Region for street lights along University Avenue. The city will cover 80% of the costs using the Streets and Infrastructure Fund while the remaining 20% will be covered by the Community Foundation, which is intended to offset the special assessments for the project. A total of 18 new LED street lights will be installed along University Avenue from the BNSF Railroad tracks east of North Washington Street to North 20th Street. A similar project will consist of removing 21 existing streetlights and installing 13 new LED streetlights along South Fourth Street. Since it’s a maintenance project, the South Fourth Street project will be 100% city funded. One bid was received from Strata Corporation in the amount of $409,760 for both street lights projects.
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