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Grand Forks eyes infrastructure upgrades to accommodate Fufeng plant

The city is working on a development agreement that would cover millions of dollars for sewer and road upgrades. Whatever money that wouldn't come from federal infrastructure spending and state grants would be repaid by the company, according to city staff.

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The future site of the Fufeng Group project on the north end of Grand Forks. Eric Hylden / Grand Forks Herald

About 2% of the work on a massive mill north of Grand Forks has been completed, Mayor Brandon Bochenski estimated on Monday.

“But wins like this don’t come around too often,” he said.

Grand Forks City Council members on Monday were presented with a rough draft of the work the city is planning to do to accommodate a 370-acre “wet corn milling” facility that’s set to be Beijing-based Fufeng Group’s first production facility in North America. City and business leaders claim the plant will produce 1,000 construction jobs over the next two and a half years and will ultimately employ 233 people there, plus another 525 people who’d work in related fields. It’s the largest private investment in Grand Forks County’s history, economic development staff have estimated, and, after months of work in secret, is a particularly large feather in local city and business leaders’ caps.

Related: Area corn growers optimistic after Fufeng Group selects Grand Forks as site for new facility

Luring the company to Grand Forks, though, partly means putting together a package of infrastructure improvements and tax incentives that set the city apart from the dozens of other cities the company considered. Fufeng’s plant would use an estimated 6.6 million gallons of water per day, spit out 3.1 million gallons of sewage, and burn 36,000 dekatherms worth of natural gas at its daily peak.

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“What I heard is that that’s more gas than the city normally uses on an average day,” City Administrator Todd Feland said.

The city is planning to spend at least $91 million to upgrade the sewers and roadways that would serve the plant, which is set to be built north of Grand Forks on 27th Avenue North, about equidistant between I-29 and North Washington Street. A large chunk of that money is taken up by an existing plan to upgrade the city’s wastewater treatment plant to help it handle more and stronger sewage that often goes hand in hand with large-scale industries.

The city expects to foot that bill with $7 million from the American Rescue Plan Act, another $3 million from Grand Forks County’s government, and an approximately $9 million state grant.

To pay for the remaining $72 million, the city is angling for wastewater and stormwater grants from the state, plus further money from a recently approved bipartisan infrastructure bill. The city would borrow whatever’s left and arrange for Fufeng to gradually repay it via special assessments and fees.

And a tentative tax break called a “payment in lieu of taxes” plan would, in essence, subsidize the project for up to 20 years in the same approximate way that “tax increment financing” plans have helped get commercial development plans off the ground in downtown Grand Forks.

Right now, the land on which the plant would sit is a collection of empty fields in Falconer Township, and, if or when the city annexes them and the plant is built, that land would be considerably more valuable. Under a sample plan presented to council members on Monday, Fufeng would, for 10 years, pay property taxes on 10%, rather than the entirety, of the difference between the pre- and post-construction values of that land. After that, the company would pay taxes on 25% of the difference for another 10 years.

The terms of that incentive package are set to be spelled out in a development agreement, the first draft of which city staff hope to have ready for council members to review in December.

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COVID-19, ‘CDBG’

In related news, City Council members:

  • Were told that COVID-19 figures countywide have been generally high over the past few months, but case rates and deaths are at a lower point than at similar points last year. Most new coronavirus infections in Grand Forks County have been found in people ages 30-39 and 0-9, according to Michael Dulitz, Grand Forks Public Health’s COVID-19 data and analytics leader. And most unvaccinated county residents are between the ages of 20 and 29.
  • Approved the city’s 2022 Community Development Block Grant program budget, which aims to spend about $1.15 million on brick and mortar projects and a further $230,000 on public service projects. Those figures plus money for administration and other projects, total $1.65 million -- a figure that’s considerably higher than the $1.23 million the program was allocated in 2021. That’s because program administrators expect to receive $895,000 from the sale of the (for now) city-owned Corporate Center II on DeMers Avenue. That bump represents the second to last injection of so-called “flood money” into the program, which is meant to aid low-income residents via brick and mortar projects and programming. The last batch of flood money is expected when the city sells the center’s sister building, Corporate Center I. The money budgeted for 2022 is still unallocated, but a community advisory committee made up of nonprofit, city, and business leaders is set to review and rank grant applications in early 2022 and have a spending plan finalized for council consideration in March.

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