FARGO — Fargo city commissioners have approved on a 4-1 vote a large tax increment financing district for the downtown Fargo riverfront and nearby areas, but not before complaints from two city and county officials.
City Commissioner Tony Gehrig and Cass County Board Chairman Chad Peterson said at two meetings on Monday, April 5, that they both vehemently oppose the public financing tool commonly used around the nation that provides a subsidy for redevelopment and public improvement projects.
Gehrig said using the property taxes on new developments or revenue from the sale of city property for 25 years in the district is a "terrible, terrible idea."
He said the school district, city, county and park district are being robbed of tax dollars.
"It's taking from the middle class and giving to the wealthy people so they can build their castles," Gehrig said. Then, he said, other taxpayers are left to pay the tax bill.
Peterson, who heard a presentation on the TIF at the county board meeting from City Strategic Planner Jim Gilmour earlier on Monday, said TIFs shouldn't exist and that the tax breaks that take money away from the county and other taxing jurisdictions for 25 years was "an incredibly unreasonable length of time."
He called TIFs "shameful."
Peterson said other developers in the outer areas of town don't get the tax breaks.
"I don't want to pay taxes, either, but I have to," he said.
Gilmour responded to Peterson that a dozen TIF districts closed out in the last 14 years and added $383 million to the property tax base that likely wouldn't be there otherwise.
Later, in the city commission meeting, Gilmour estimated new projects in the riverfront area would likely boost values for property taxes from $60 million to more than $200 million.
In addition, businesses in the district would continue to pay taxes on their $60 million in property. Most of the tax dollars collected by the city would be for public improvements, he said, such as work on a civic plaza or a pedestrian and biking bridge over the floodwall.
He added it can cost a lot of money to clear a site for development, and without a TIF a lot of downtown developments wouldn't happen.
Mayor Tim Mahoney agreed. When they talked about the former Mid America Steel site, where one of the abandoned main structures recently burned next to the river, he said several developers looked at the property but "no one has stepped up."
City Commissioner John Strand wondered if they should put out a request for proposals to see if a developer wants to take the property as-is and start demolition work more quickly.
Gilmour replied that a floodwall still needs to be erected on the site which would cut the 14-acre site to about 4 acres for development on the dry side of the dike and north of the railroad tracks.
There are some minor asbestos and petroleum problems on-site that need to be cleaned up, and Gilmour said the city is hoping to sell one of the buildings left on the property.
Developers looked at other sites owned by the city in the district, too, but Mahoney said there have been "no bites."
City Commissioner Dave Piepkorn, a major booster of the renewal plan, said the riverfront development will be "setting the tone for downtown for a long time — for 100 years or more."
He said downtown serves residents of eastern North Dakota and western Minnesota.
County Commissioner Mary Scherling said she found the renewal plan "really exciting to see."
When she asked which projects would begin soon, Gilmour mentioned five plans.
They are selling a city-owned site next to the Veterans Memorial Bridge where the Park East Apartments were once located, beginning flood protection and demolition work on the Mid America site, tearing down a city-owned Second Street warehouse to sell for development, offering the former public health building on Fourth Avenue for sale and working with the Fargo Housing and Redevelopment Authority on the high-rise project where only 85 to 95 people remain in the 247-unit structure that may be torn down or refurbished.