Fargo leaders watch Legislature's zone bill

Two legislative bills affecting Fargo's Renaissance Zone have caught the attention of city leaders.

House Bill 1457, which has passed both the North Dakota Senate and House, allows Fargo to expand its Renaissance Zone by 15 blocks.

Plans to decide which specific areas Fargo will add to the zone will be set into motion soon, said City Administrator Pat Zavoral.

Currently all cities are limited to Renaissance Zones of 20 blocks. Under the new legislation, cities with more than 5,000 population can add one block for every additional 5,000 people, up to 35 blocks.

The legislation also allows cities to exchange blocks that have no activity with others that have high potential.

An advisory committee, such as the one that originally created Renaissance Zone boundaries, will be formed to study possible expansion areas, Zavoral said.

The Renaissance Zone was established by the Legislature in 1999 for the purpose of creating tax incentives to spur redevelopment of cities' downtown areas.

The advisory group then would make a recommendation to the city's Renaissance Zone Authority, which in turn would take it to the City Commission.

The state also would have to approve new borders.

Already, Fargo has identified several ideal expansion areas, including the current City Hall and Fargo Civic Center property near the riverfront.

Another important piece of Renaissance Zone legislation for Fargo is Senate Bill 2259, which would expand where the Renaissance Zone fund organization can invest.

Each city with this type of zoning authority is allowed to establish a Renaissance Zone fund for the purpose of raising money to invest in zone businesses.

In Fargo, the Renaissance Zone fund is a $5 million venture capital fund.

Investors get a 50 percent tax credit on investments.

SB 2259 would give the fund power to invest anywhere in Renaissance Zone cities, whether or not the project is located in the specific zone.

It has been Fargo's position that investors shouldn't get zone tax credits for non-Renaissance Zone projects.

"Then it's no longer a Renaissance Zone fund," City Commissioner Jean Rayl said. "We feel things are happening downtown, and there will be opportunities."

But not everyone agrees.

Commissioner John Cosgriff said investment opportunities aren't panning out to be as large as investors would have hoped downtown.

In addition, with a business such as Alien Technology Corp. on the horizon, it would be good to have investment flexibility, Cosgriff said.

"The more restrictive you are geographically, the more difficult it is to invest," Cosgriff said. "And if the fund can't succeed, then we lose that whole resource."

The bill has been amended several times since it was created. Until now, Fargo has opposed the bill because it doesn't require investments be made within the zone area.

But further amendments are being made at the House committee level that would permit only a portion of investments to take place outside the Renaissance Zone.

City commissioners agreed on Monday to support the bill if legislators adjust it to require 50 percent or more of the investing to be done in the designated zone.

Readers can reach Forum reporter Mary Jo Almquist at (701) 241-5531