Despite recent criticism, the company that donated a downtown Fargo building to North Dakota State University will still help renovate it, Kilbourne Design Group president Don Morton said Monday.
Morton was accused Friday of hypocrisy for applying for tax credits to renovate the historic Northern School Supply building while at the same time leading the charge against a proposed statewide initiative that would give income tax credits to North Dakotans ages 21-29.
The accusation was made by state Sen. Joel Heitkamp, D-Hankinson, who supports the initiative listed as Measure 3 on the Nov. 5 ballot.
NDSU officials voiced concerns Monday the attack on Morton could jeopardize the project's funding if Kilbourne Design Group pulled out of the project.
Heitkamp said it wasn't the intent of his Friday press conference, and he complimented Morton and Kilbourne for their role in the project.
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"I do think that a parity between that (project) and his opposition to other tax incentives and tax credits was the only point I was trying to make," Heitkamp said.
The $1.5 million in tax credits are among $8 million needed to turn the building at 17 8th St. N. into a downtown campus for NDSU's architecture and visual arts programs. Five hundred students are expected to attend classes in the building.
At a news conference Monday, NDSU officials tried to clear the air on the tax credits.
Dick Rayl, NDSU vice president of business and finance, said neither Morton nor Kilbourne Design Group will benefit financially from the Renaissance Zone tax credits.
"It's the farthest thing from the truth I'm aware of," Rayl said.
Morton said Kilbourne Design Group originally applied for the tax credits because it didn't know what it was going to do with the building.
And, although the paperwork hasn't been signed, he said Kilbourne has a verbal agreement with NDSU to fulfill its role in the project.
"If we can help them recover those tax credits, we want to do it," Morton said. "It's a very good project for the community, for NDSU and for Fargo."
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Kilbourne Design Group was created by Morton's boss, Doug Burgum, president of Microsoft Great Plains in Fargo. Burgum bought the 98-year-old building and gave it to the NDSU Development Foundation.
But because Kilbourne Design Group made the initial application for tax credits, the Development Foundation needs Kilbourne to form a limited liability corporation (LLC) to take advantage of the full $1.5 million.
"Without being able to use that corporation, the Renaissance tax credit will be substantially less than it would be (with) them," Rayl said.
The foundation and Kilbourne will each own a small percentage of the project and will market the rest to taxpaying entities, such as banks, which can take advantage of the tax credits, said Keith Bjerke, NDSU's assistant to the president.
After five years, the tax credits will be donated back to the foundation, reducing the overall cost of the project, Bjerke said.
Heitkamp said even if Morton donates all of his tax credits to the foundation, he can still claim them as a deduction on his state income tax return and would therefore benefit from the Renaissance Zone program.
Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528
