City commissioners delay deciding on Roers request for tax break on their portion of Newman Center project
FARGO — The 85-unit apartment building and 11 town homes that are part of the Newman Center project across from North Dakota State University could be in danger.
Despite the project winning zoning approval this past winter , the developer's request to move ahead with a tax increment financing district for the part of the project that would be financed and operated by Roers Development Inc. of Fargo was put on hold during Fargo City Commission meeting Monday night, April 22.
After a motion to approve moving ahead with planning for a district by Commissioner Tony Grindberg died for a lack of a second, a motion by Commissioner Tony Gehrig to deny the district also died for a lack of a second.
Commissioner John Strand suggested continuing discussion with Roers, city officials and the Roosevelt Neighborhood leadership in the coming month. The extra time means neighbors could weigh in the proposed five-year tax break district that, according to plans, would also help with other housing in the Roosevelt Neighborhood. Strand's motion was approved on a 4-1 vote, with Gehrig the lone dissenter.
Roers Development President Larry Nygard said the Newman Center part of the project is not seeking any tax breaks, and he hoped construction could start soon. It will involve a new 500-seat chapel, student commons, parish hall offices, bookstore, coffee shop, classrooms, priest residences and 24 faith-based apartments.
As plans developed for the Newman Center, Roers proposed adding an attached apartment building that would likely be mostly for students. Neighbors objected to that portion of the project, so a compromise was reached to reduce the number of apartments to 85 and add 11 town homes on the east side of the block-wide project as a buffer to the surrounding neighborhood.
The town homes would provide more single-family housing to the neighborhood to replace existing homes, many of which are in disrepair or abandoned, that would be torn down.
Jim Gilmour, the city's strategic planning director, pointed out the TIF district wouldn't be entirely for the Roers apartments and town homes. He said the proposed "renewal plan" would include expanding the district to allow addressing housing needs in other parts of the neighborhood. That could include rehabilitation of other existing blighted homes at scattered sites.
Nygard added that they have been working on plans to possibly save a few of the homes on the Newman Center block and move them to other locations in the neighborhood.
When Strand asked if the Roers project would die if the TIF wasn't approved, Nygard said "yes." However, he also clarified the TIF would help finance some of the preparation work needed at the site, including underground storm water retention for which funds saved by the TIF could be used. A TIF usually gives a five-year property tax break to the developer after which taxes are applied.
The Roers part of the project would likely cost about $20 million, with the Newman Center phase also costing approximately that amount and financed through a fundraising drive, according to figures presented at the meeting.
Grindberg and Mayor Tim Mahoney both pointed out that the tax collections eventually would be much more than what is currently collected on the block.
However, Gehrig asked Nygard what the return on investment would be if the TIF wasn't approved, and Nygard said 3 percent compared to 8 percent with it.
"So it would still be profitable," said Gehrig. "It's about how much a business would make." He said individuals don't get such a break.
But Mahoney countered that it was a $20 million improvement. Roers has also said it would provide more needed housing for NDSU students close to campus.
Mahoney said there is also a new policy in place where TIF requests come before the City Commission first to see if there is an interest to proceed; if there is, the request goes to the tax exempt committee and planning commission before returning for final approval by the commission.