Some day, some project that promises development and improvement in Grand Forks will be turned down in its quest for a tax break. In theory, it inevitably will happen. In reality, it doesn’t happen much.
It’s a relevant question as a Grand Forks developer has approached the city in hopes of securing a tax discount on a $30 million project that will add even more development to the city’s downtown district. The City Council on Monday voted to send the proposal to the next phase; the vote increases the chance that the plan eventually will be approved.
It’s a grand proposal. Edgewood Development Group hopes to build a new hotel, events center and condominium complex downtown; it would be adjacent to an existing building at 322 DeMers Ave.
The developers are hoping for a local property tax discount; it would be temporary, but would allow the building to be exempt from higher property taxes as its true value exponentially increases. Developers say that doing so would provide enough of a boost to push through the project.
The pros: New development downtown is good for Grand Forks. The hotel would add even more shine to a series of projects, including condos, a grocery store, a bank and business spaces already under construction. DeMers Avenue is in the midst of reconstruction. The Sorlie Bridge was renovated a few years ago. A downtown hotel would be useful when the city renovates Town Square – a much-needed improvement that could bring more people to the downtown district.
The cons: The Edgewood project is dubbed a “boutique” hotel, with more than 80 rooms. As visitation to the city decreases in correlation to the rise and fall of the Canadian dollar, are 80 more rooms in the city necessary? Does “boutique” mean “expensive”? Since it also will include an events center, will it compete directly with the city-owned Alerus Center, which has been notably successful in bringing events to the city in the past couple of years? Should the city be concerned about propping up a potential competitor to the people’s events center on the city’s western edge?
Finally, an old argument certainly will arise: Should the city be more apt to say “no” when local developers seek a tax break? Maybe, but we believe collecting property taxes later on impactful projects that do not exist today is smart. Without the break, the potential for “new” taxes — a few years down the road — probably doesn’t exist.
In this case, the developer, Phil Gisi, says he needs the break to make the project happen. He has done numerous development projects and says he has never asked for this kind of help.
It’s difficult to imagine saying no to this project when other tax-break proposals for local development have been approved in recent years.
Some day, the city might make a stand with tax breaks. But we don’t see it this time, with an experienced local developer who has never sought this kind of help and who wants to add to the rebirth of the downtown district.
In these early stages, we don’t see any reason to not move this proposal forward.