FARGO - City subcommittees have approved more than $260,000 in property and income tax exemptions for two downtown construction and renovation projects.
The two multimillion-dollar building projects now go to the City Commission for final approval and could begin this summer.
A $2.1 million restoration of the former Fargo Rubber Stamp building was approved by the Renaissance Zone Authority Committee on Tuesday, planner Joe Nigg said. The project is being proposed by Kilbourne Group, which wants to restore the 22,000-square-foot building at 64 4th St. N.
Under the Renaissance Zone program, the estimated benefits for that project over the five years are $5,000 in income taxes and $175,000 in property taxes, Nigg said.
The FRS building project also received final approval for a $45,000 Community Development Block Grant for window replacement Monday. The grant requires a 50 percent match and was approved unanimously by the City Commission.
When the building is fully remodeled, 17,000 square feet - about 5,600 per floor - will be available for lease as office space with the option of installing retail on the first floor, according to Mark Johnson, Kilbourne Group project manager.
Work should begin on the building this year and take 12 to 14 months to finish, Nigg said.
Fargo Rubber Stamp Works was housed in the building from 1966 until February 2012, when owner Kurt Kiefer moved the operation to Moorhead.
The other downtown Fargo project awaiting the final OK is a four-story, 36-unit apartment building at 711 NP Ave., proposed by Craig Holdings, LLC. It would be 48,224 square feet at a cost of $2.8 million.
That project got initial approval Tuesday afternoon by the city's Tax-Exempt Review Committee for the payment in lieu of taxes, or PILOT, program, said Fargo Planning Director Jim Gilmour.
That project was also approved by the Renaissance Zone Authority Committee on Tuesday, Gilmour said.
The city's Renaissance Zone program provides up to five years of property tax exemption, whereas the PILOT program provides five years of 100 percent property tax exemption followed by another five years of 75 percent exemption, Gilmour said.
After being approved for both programs, Nigg said the Craig Holdings project will move forward with the PILOT program.
The estimated benefits for that project are $46,000 in property taxes for the first five years, and $34,500 for the following five years, Gilmour said.
In some initial excavating at the site, crews found unexpected debris, which added cost to the project, Nigg said. The PILOT program offers more help to offset the unanticipated expenses, he said.
The Craig Holdings project should begin in late summer and be complete by about May 2014, Nigg said.
The two projects go forward for final approval by the City Commission on July 8, Gilmour said.
"Two great projects for downtown, that's for sure," Gilmour said.
Readers can reach Forum reporter Erik Burgess at (701) 241-5518