WEST FARGO — After two businesses asked for five-year tax exemptions under a little-known ordinance, city commissioners moved to put a moratorium on future similar requests.
All Season Motorsports as well as Northern Stone applied for the five-year tax emptions after remodeling their spaces. All Season Motorsports said they added more than $45,000, the minimum requirement of the ordinance, by building an addition to their shop, taking it from about 4,800 square feet to more than 10,000 square feet. The remodeling increased the value of the building from about $672,000 to $873,000. Northern Stone increased its Main Avenue shop from about $300,000 to $500,000.
City Assessor Nick Lee said the businesses had applied and qualified for the exemptions based on a policy that is not regularly used: The city offers a a five-year tax emption for commercial building improvements that increase the property value by $45,000 and residential improvements that increase the value of a home by $25,000 or more.
The two applications were removed from previous commission consent agendas after Mayor Bernie Dardis asked for more information on the policies.
"It is no reflection on these individual businesses whatsoever," Dardis said. "It was one of those ordinances that was buried deep."
City Administrator Tina Fisk said the $45,000 threshold was actually lowered in 2013 from $50,000 after Jake Lauritsen, a current West Fargo Parks Board member, requested the threshold change after he adding $45,000 in value to his finance business location.
On Monday, Commissioner Mandy George said she supported the exemptions due to the projects being remodels rather than the city offering tax incentives for new construction.
"I would rather see a remodel to keep older buildings and keep them nice," she said. "I would be open to reviewing the whole (ordinance). But these people were told these were our guidelines, so I'd personally be open to approving these applications."
Commissioner Eric Gjerdevig, who moved to approve the applications for Northern Stone and All Season Motorsports, also asked to put a moratorium on approving future applications to give the city time to review the current ordinance and potentially change it.
"There is a lot of room for improvement," Gjerdevig said. "I don't understand the uncapped limit on it. To me it is in the incentive category and it should be a discussion."
"The commission can change the rules if they want to," City Attorney Jon Shockley said. "My advice would be since the applications were received under the old guidelines to approve them."
The commission unanimously approved the applications and the moratorium on future applications, which will be in effect until the ordinance is reviewed.