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Message: <blockquote data-quote="lunkerslayer" data-source="post: 456822" data-attributes="member: 217">If we didn't do it someone else would be, does the offset of sustainable employment outweigh the cost of that tax incentive?<a href="https://www.grandforksherald.com/news/local/mayor-brandon-bochenski-tax-incentives-for-large-projects-help-keep-grand-forks-growing" target="_blank">https://www.grandforksherald.com/news/local/mayor-brandon-bochenski-tax-incentives-for-large-projects-help-keep-grand-forks-growing</a>GRAND FORKS – Despite some criticism, giving property tax incentives to developers is key to keeping Grand Forks growing, according to Mayor Brandon Bochenski.“You’re trying to get projects done that wouldn’t happen otherwise,” Bochenski said. “If you want to have long-term growth in the city, and you’ve gotten an opportunity to incentivize some things for a period of time, you’re going to get short-term benefits, but really it’s a long-term play to build up what our taxable value is per citizen.”Numerous property tax incentives, usually in the form of an exemption for a period of time, have been making their way through the Grand Forks City Council. The specifics of the exemptions vary, but entities requesting an exemption will still pay taxes on the land and will pay the full property tax bill after the period of the exemption ends.The exemptions being considered in 2025 have been longer than five years, which, per Century Code, also require approval from both the Grand Forks County Commission and the Grand Forks School Board.“I think it’s beneficial — I truly do — to add some fuel to that fire and to promote some growth like we’ve been doing,” Bochenski said.Offering these incentives has not been without concern for some on the City Council, and on other governing boards in Grand Forks. The council had an in-depth conversation about the incentives in April.“I think if they would pay their fair share, maybe my taxes would go down,” Councilmember Rebecca Osowski said during that April 14 meeting. "I just feel like we're subsidizing rents."However, in the case of some developments, not having some sort of incentive would make the project harder to get across the finish line, others argued.“It’s a Catch-22,” City Council President Dana Sande said during the discussion on April 14. “Generally speaking, nobody wants to give a tax incentive. I much prefer our community afford these things without tax incentives, but without doing something, we run the risk of stagnation.”Approval of these incentives requires a multi-step process. First, the City Council approves to have a developer to go through the pre-application process. That kicks off a financial review done by the city and its advisers at Baker Tilly that considers aspects like the debt and equity of the project, future values and market conditions.In one of the latest projects being considered by the City Council — an apartment complex off 47th Avenue South being developed by Northridge Construction — having an exemption to at least some of the property taxes is the only way it's going to get completed, Baker Tilly Director Mikaela Huot told the council on June 9.“Without the incentive through the exemption, the cash flow is not sufficient to do two things,” Huot said. "One, to meet minimum debt coverage requirements as necessary by their lender … and two, then there’s actually negative cash flow, so there’s no return on the equity investor for the project.”Lately, the city has begun having projects go through the financial review process and the planning and zoning process simultaneously. Some projects, like Northridge’s, don’t need any zoning changes, but others, like Dakota Commercial’s 150-unit apartment development on 47th Avenue South, do.If a project needs to be rezoned, that process can take at least two months. A tax incentive can take even longer between financial review and being considered by the governing bodies of Grand Forks. Northridge’s project, even though it doesn’t need a rezoning, will likely take from April to the end of July to work its way from pre-application to final approval if it goes through the whole process.By doing the multiple parts of a project together, instead of doing the planning and zoning process and then the financial review process sequentially, Bochenski said it helps the city be more efficient.“I think it made sense to see if the council wanted to look at those and see if something made sense before you spend a lot of work working on the rezoning,” Bochenski said. “I mean, if it’s not going to happen, why are you working on the rezoning? That’s how I look at it.</blockquote>

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