The latest numbers from Fargo's downtown Renaissance Zone confirm a degree of success that was not anticipated by even the program's strongest advocates.
To date, 55 projects in the 20-block zone are either under way or completed, representing a total worth in building improvements of slightly more than $23.6 million, according to a 2001-2003 summary provided by the city. The value of the buildings prior to improvements was $6.6 million; estimated value after improvements is just short of $30 million.
The zone program provides property tax and income tax breaks for developers and others who invest in building rehabilitation, purchase and leases within the zone. While some taxes are lost during the period of the tax exemptions, the net gain of tax revenue generated by building improvements after exemptions expire offsets short-term losses.
For example, zone pre-project tax revenues were about $150,000. Estimated post-project tax collections will be nearly $650,000.
So not only does the program work for rehabilitation of the city's central business district and surrounding blocks, but it also will generate far more tax revenue than would have been realized without the incentives for developers and building owners. In short, the Renaissance Zone program works as advertised. Indeed, the Fargo program has exceeded expectations.
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While a handful of legislators -- mostly rural -- did not like the concept when it was first proposed a few years ago, the 2003 North Dakota Legislature approved without much debate a mechanism based on population for cities to expand 20-block zones to a limit of and additional 15 blocks. The authorization for expansion kicks in August 1, and Fargo is ready.
Next week the city's Renaissance Zone committee will tour 15 blocks which have been identified as potential additions to the zone. City officials said last week that several of those blocks had been identified when the original 20-block zone was established, so including them in the expansion is likely. Also, several rehab and improvement projects in the expansion blocks are ready to go.
The Renaissance Zone idea was not born in Fargo; other states were doing it before North Dakota adopted the program. But Fargo officials saw its potential as a vital component in the revival of downtown, and worked with state and local government to establish the program in North Dakota. Fargo's success thus far is a model for other cities. And the program itself is an excellent example of a public-private partnership that generates long-term benefits for the city.
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