FARGO — With three downtown Kilbourne Group housing and retail projects on hold, two Cass County commissioners met with the developers to discuss any compromise on tax incentives that were denied at the last meeting.
County Commissioners Rick Steen and Duane Breitling talked for more than an hour with Kilbourne President Mike Allmendinger and didn't make much progress on the issues. The three other commissioners didn't attend the meeting.
Steen did most of the talking for the county board and near the end of the discussion, he said he hadn't changed his mind on the tax breaks for the three projects on the west side of downtown. Steen, of Fargo, was one of the three county board members who rejected a 15-year break, along with commissioners Mary Scherling and Chad Peterson.
Steen, however, said a seven-year break was the direction the county board favored.
Allmendinger suggested 10 years and said he might bring that request before the board at its next meeting to see if he could gain approval. The Kilbourne leader is worried that without the longer tax breaks, the banks may not approve loans so the projects can advance.
The county board had actually approved providing a seven-year property tax break for two of the projects, and Steen said he didn't think the board would budge on that length.
"Getting past five years was a huge step," Steen said, although Breitling and commissioner Vern Bennett both favor the longer breaks.
Steen said commissioners are concerned about how giving the tax breaks causes increases for others in the county.
County Administrator Robert Wilson said the county and the city, which favors most tax breaks for developments, are "at a different point philosophically and also in the length and value of incentives."
Tax break issues with the county and developers surfaced after the North Dakota Legislature two years ago gave counties and school districts the right to decide if they would participate in several of the tax incentive programs usually started on the city level.
Allmendinger said he hoped demonstrating the need for the tax breaks through a third-party financial adviser would be enough to get the county board to agree to a longer break. He said the projects don't involve any direct county dollars as they pay for the financing of the project and the infrastructure.
He also noted that not only downtown projects receive tax breaks. City Strategic Planner Jim Gilmour agreed, saying each new home built in the city gets a two-year property tax break on $150,000 of the home's value whether it's a $150,000 home or a $1 million home. Of that tax base of about $88 million for 2019, the property taxes lost are about $1 million for this year.
For Renaissance Zones projects, the property value this year is at about $50 million, with a property tax loss of about $655,000.
"But the downtown projects get all of the attention," Gilmour said.