WEST FARGO — The West Fargo City Commission tabled a request to build new infrastructure near Costco for a new commercial development, after hearing that the development may have been sold to a nonprofit, that might not have to pay property taxes on the area.
The Dakota Medical Foundation is planning to build on 10 of the open 21 acres between Interstate 94 and 23rd Avenue South. The office building would fill in the area between Costco, and where a private surgical center is being constructed.
Assistant West Fargo Administrator and former city engineer Dustin Scott brought forward a proposal for $2.6 million in infrastructure improvements that would construct sanitary sewer mains and services, water mains and services, storm sewer, concrete streets with curb and gutter, street lights, sidewalks, stockpile removal, boulevard plantings and other installations. Scott said the necessary improvements are vital to the commercial development in that area and have been identified as needed in the city's capital improvement plan.
Scott proposed the project would be paid for by special assessments, which would be placed on the developers of the area.
However, City Commissioner Mandy George questioned using special assessments.
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"If we're trying to get rid of specials, why do we continue to do it this way," George said the commission's Monday, May 2 meeting. "We're not doing anything different, we're not even trying."
Mayor Bernie Dardis said while the city is trying to "come up with as many ways to bring down special assessments as possible," but, the city also struggles with recruiting commercial businesses, and the we get very few businesses interested in coming here and the city needs to provide incentives and infrastructure to reach them.
Commissioners also questioned encouraging a development of a nonprofit organization. The city has been working with Enclave, which moved to its headquarters to the area. However, they questioned if the city would lose tax money if the land is sold to a nonprofit such as the Dakota Medical Foundation.
City Attorney Jon Shockley said nonprofit organizations do not automatically receive exemption from paying property taxes. A potential tax exempt building must apply for the status from Cass County.
"Not all nonprofits are created equal and not necessarily because you're a nonprofit do you automatically receive no taxes," he said.
Commissioner Eric Gjerdevig said it would be difficult to support a development that may not create tax revenue for the city.
"The whole thing being tax exempt is kinda an issue for me," he said.
The project was tabled by the city commission and city staff was directed to find out the status of the nonprofit's tax status. The infrastructure project will return to the city commission at its June 6 meeting.
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Readers can reach West Fargo editor Wendy Reuer at wreuer@forumcomm.com or 701-241-5530 . Follow her on Twitter @ForumWendy .
