FARGO — Cass County commissioners decided Monday, July 22, to negotiate more about property tax breaks with city officials and the Kilbourne Group over three downtown multi-use or housing projects.
The meeting will be lined up in coming days as Kilbourne Group President Mike Allmendinger said the projects are "all on hold" at this point, although the hope is to break ground on some of the work this fall.
The projects are all on the west side of downtown; one of them would replace a city parking lot plus another empty lot behind the Black Building between First Avenue North and Second Avenue North and is called the Kesler North and South projects.
The other is on the site of the former Nestor bar at 1011 NP Avenue, while the third is on the northwest side of downtown at 1017 Fourth Avenue North at the site of an antique store.
Earlier this month, commissioners voted down tax incentives for two of the projects on a 3-2 vote with Commissioners Mary Scherling, Rick Steen and Chad Peterson opposed. In favor of the incentives were Commissioner Vern Bennett and Duane Breitling.
They, however, also unanimously approved their willingness to participate for seven years in a PILOT (Payment In Lieu Of Taxes) program for projects. The request had been for 10 years.
It was a repeat 3-2 vote on Monday when the Kesler sites were voted upon. Once again, Steen entered the motion to negotiate more with the city and the commission agreed.
Allmendinger said the company didn't want to move forward on another $400,000 in architecture and design work until an agreement with the county was finalized.
He said without the county tax breaks, project costs would have to be reduced in the millions and rents raised 15 to 16 percent.
Scherling said the county participating in tax break programs was something new and at least rare for the county board.
City of Fargo Strategic Planner Jim Gilmour, who also addressed the county board, said the parking lots for the Kesler project are basically not providing any property tax dollars to local government units. He also added that when new developments are completed on the fringes of the city, the cost to taxpayers can be much higher because new roads, utilities and other amenities are needed. He said the downtown projects can save taxpayers money.
However, Peterson said he struggled with the tax breaks, saying the owners wouldn't pay any property taxes for as long as 15 years when incentives were added up. He also wondered who should be given breaks.
Allmendinger said Kilbourne has completed 24 projects, but asked for PILOT funds only three times. He said projects are costing more now with construction prices up and the Kesler project was an especially complicated effort.
Meanwhile, Fargo city commissioners delayed other tax incentives involved in the projects at their last meeting. They meet again Monday, July 29.