FARGO — Fargo and Cass County commissioners approved a 10-year tax break for one of the city's major employers on Monday, April 5, for a $16 million addition adding another 80 jobs to the city.
The Payment In Lieu of Taxes break could help keep Tecton Products LLC from moving the addition to its Virginia plant or another site in the country.
The project will be located at Tecton's plant at 4401 15th Ave. N. with operations in the expansion planned to start in September 2022.
The PILOT would last 10 years, with Tecton paying no taxes on the project the first five years. In years 6-10, the company’s tax bill for the project would rise from $48,785 to $235,501, documents show. In all, the tax break would total nearly $1.7 million.
Tecton employs 236 people who produce the fiberglass parts around Marvin Windows and Doors products. The company said it will add 16 people in the first year of the addition, most of them earning $15.01 to $20 per hour. By the fifth year of operation, the company estimates its payroll will rise to 320 employees.
County commissioners, who sometimes don't agree with tax breaks, said they appreciated the higher wages the company is paying, from $15 to up to $35, and that it was a longtime employer in the city,
Tom Gohdes, director of operations for Tecton, had a tougher time in front of the Fargo City Commission. He faced several questions and comments from Commissioner Tony Gehrig who was the lone vote against the incentive.
City commissioners were impressed with the pay scale, and Gohdes said some of the employees on the production line make as much as some of the office workers. He said the lure of adding to the Virginia plant was that lower wages are paid there.
Gehrig opposed the tax break, as he frequently does, but was more vocal than usual in his opposition this time. He said the commission shouldn't be "giving away tax dollars," and most companies would build or expand here, anyway, because of the business climate, safety and profitability.
He also accused the Greater Fargo-Moorhead Economic Development Corporation officials of coaching business owners to relay that they are looking at other locations to more easily get the tax breaks.
That raised the ire of Commissioner Dave Piepkorn, who said Fargo is in competition with other locations across the country "every day" as they also offer incentives to operations. He called Gehrig "arrogant" to think otherwise.
Commissioner John Strand, who sometimes opposes tax breaks, especially for those with lower paying jobs, brought up a fine of $80,000 that the company paid in 2008 from its Virginia plant for a workplace safety violation. He said workplace safety issues should perhaps be included in applications for city tax breaks.
Gohdes said they "very much care about our associates" and noted the company received the highest ranking in recent years from an OSHA program for safety. He said the long-ago fine didn't "reflect who we are."
Commissioner Arlette Preston, who said the company completed a previous tax break in 2017, wondered if there was an audit available to see if the company had met all of its goals for pay and jobs.
City Strategic Planner Jim Gilmour said he could get that information, and Preston said she would like to see such audits in the future when there are repeat requests for incentives.
The company, in a partnership with Marvin Windows and Doors, opened its Fargo plant in 1992 and expanded it in 1997.