FARGO - A roadmap for a downtown tax increment financing district to redevelop valuable riverfront properties was laid out for city commissioners Monday, Feb. 1, in a special noon-hour session

Jim Gilmour, the city’s director of strategic planning and research, detailed some of the successes of TIF financing in the city, including parking, retail and housing projects now underway, before sharing the outline of a renewal plan for the riverfront.

Gilmour said the plan will also go through the planning commission and tax exempt review committee before it gets back to the commission, with final approval possible by the end of March.

A couple commission members at Monday’s meeting strongly supported the city's use of TIF to date. However, Commissioner Tony Gehrig voiced strong opposition to offering more incentives on projects he feels would be done without tax breaks, including redevelopment of downtown properties like the city-owned Mid America Steel site.

Gilmour said projects that could be started in 2021 include:

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  • Sell property at 1 2nd St. S., an empty area that once held an apartment building that was razed for flood control work.

  • Demolish and sell 419 3rd St. N., the remainder of the old Fargo Public Schools warehouse.

  • Request proposals for the old Public Health building on Third Avenue North and Fourth Street.

  • Stie planning for the old Mid-America Steel site, next to the Red River bridge on NP Avenue, including figuring out where flood control measures would have to go through the property.

Work proposed for 2022 includes:

  • Partial demolition of the old Mid America Steel site. Gilmour noted that the site includes railroad tracks and the soils could be contaminated and need remediation.

  • Partner with the Fargo Housing and Redevelopment Authority. Gilmour said the HRA eventually plans to demolish the Lashkowitz High Rise and consider placing low-income housing on the same site.

The Lashkowitz High Rise located at 101 2nd St. S. in Fargo is seen in this May 2020 file photo.
Alyssa Goelzer / The Forum
The Lashkowitz High Rise located at 101 2nd St. S. in Fargo is seen in this May 2020 file photo. Alyssa Goelzer / The Forum

  • Gilmour said the city should also consider development incentives for other underused properties now in private hands in the downtown area, such as surface parking lots and other underused buildings or buildings in disrepair. “You don’t know how fast the private sector might move on those,” he said.

From 2023 to 2025:

  • Build affordable housing downtown.

  • Rebuild the water, sewer and road infrastructure around the Mid America Steel site and redevelop the property.

  • Work around the Civic Center and City Hall, which could include a pedestrian bridge from City Hall over Second Street North, a performing arts center, civic plaza, skyway and expansion of the Civic Center parking ramp.

Gilmour said there are also Renaissance Zone and Opportunity Zone incentives available to developers. He added that it would be 2024 before tax increment financing revenues started coming in if work started as soon as the plan was approved.

A TIF uses all or part of a developer's property taxes to pay for infrastructure improvements, such as streets, sewers or parking lots in the areas near a new development. Fargo typically employs TIF to encourage development of affordable housing, construction in areas were it wouldn't be done without aid, remove blight, help with costs such as pollution remediation, or to spur development of underused commercial or industrial properties.

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“To me, it’s very exciting. This will set the tone for 50 to 100 years,” Commissioner Dave Piepkorn said. “This is hugely important.”

Gehrig said projects like the Island Park parking ramp wouldn’t have been undertaken by private investors because the payoff was too distant.

“There’s a lot of risk here. It’s not risk free,” Gehrig said.

Gehrig called the Mid America property held by the city “the most valuable land in North Dakota. Do you need an incentive to build that? No, you don't.”

Gehrig said the incentives don’t appear to reduce property taxes for homeowners.

“We subsidize apartments. We subsidize retail. We subsidize office space,” Gehrig said. “I call nonsense!”

He added that allowing the city to develop along the riverfront, but not private industry seems wrong given past concerns about flood control.

“That’s absurd!” Gehrig said.

Mayor Tim Mahoney said tax incentives have paid off handsomely by renewing the downtown area and increasing property tax revenues as each TIF district sunsets.

He said the city sees an almost “30-to-1 return” in property tax revenues from the completed projects.

The Block 9 project (now the RDO Building) pulled in about $3,000 a year for taxes on the surface parking lot. When that tax increment district sunsets, the annual property taxes will top $1 million, Mahoney said.

Commissioner Arlette Preston said growth is good, but that the city should also keep in mind the need for maintenance on the projects 40 to 50 years down the road.

Gehrig said he worries that the market “expects these dollars,” and that there are properties in Fargo not only getting a TIF, but payment in lieu of taxes and Renaissance Zone tax breaks.

Mahoney is adamant, however, that TIFs and other incentives have been good for Fargo.

“Downtown was a ghost town in the ‘90s,” Mahoney said after the meeting. He said there's now about $20 billion in property value downtown.

“This community is thriving,” Mahoney said.