Committee Minutes

MINUTES/JOINT MEETING FINANCE/URBAN DEVELOPMENT
COMMITTEES - Thursday, April 6, 2000 - 12:00 Noon____________

Members present: Finance: Babinchak, Brooks, Carpenter, Hamerlik.
Urban Development: Glassheim, Beyer

1. Matter of Renaissance Zone.
Chairman Glassheim stated they were moving today towards decision on location, and asked staff for comments prior to discussion, committee recommendation and forward to city council.

Dennis Potter, City Planner, reviewed items presented to the committees: Item 1 from Dakota Commercial & Development, Kevin Ritterman, listing out the approximate sq. footages vacant in the various Renaissance Zone areas (attached); Item 2 - A survey (90 to 100 forms) was mailed out by Don Lindgren and Dean Jacobson to businesses along Gateway Drive if there was interest in having a Renaissance Zone established along Gateway Drive and Planning Office received 22 responses and results outlined were presented to the committees; Item 3) a Renaissance Zone assessment and selection criteria which lists the purposes of a Renaissance Zone and lists four local goals to be considered: 1) to maximize future investments and protect past investments, 2) create a zone that will be in the best interests of Grand Forks, 3) increase the “post zone” tax base, and 4) restore and preserve historic property.

Beyer reported present.

Mr. Potter reported that there were no responses from other zone areas (except Zones A -Downtown and D - Gateway).

Chairman Glassheim asked for responses from the audience about Renaissance Zone concept or specific locations. There were none from the audience.

Council Member Hamerlik asked if there was representation from other zones (except A or D) and there were none, and moved to limit our discussions to Zones A and D. Beyer seconded the motion.

Babinchak moved that they eliminate for discussion Options E, F, G, H, I, and J. It was noted that there was a motion on the floor.

Upon call for the question, the motion carried.

Chairman Glassheim stated they were now considering the Downtown area and the Gateway Corridor from Columbia west. Don Lindgren stated the Gateway parameters are Kennedy Bridge west, and have 3 zones that were set up, one did include a portion of the area east of Columbia but do not have an A zone yet in those parameters. It was noted that zones can only include 20 blocks. He stated that in visiting with Mr. Potter the whole Fairgrounds property counts as half a block so to get from point A to point B, you could start at the trailer court by the Fairgrounds if it were incorporated that into the zone and would be good idea for future development, and possibly the University land farther out. Mr. Potter stated that at their last
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meeting they were talking about the D area, and when staff did original drawing, picked up some areas that were fairly new in terms of housing development and that if the Joint Committee decided to go with D, the staff would want the option of sitting down with the folks in that area and reshaping the original lines to make a clean, clear 20-block area. Chairman Glassheim stated that they will interpret D as being D modified, but in the core center of that Gateway area.

Babinchak questioned statement from Mr. Lindgren re. Valley Ho Trailer Court and how does that relate to a Renaissance Zone, and if process or rules don’t apply to a trailer court, should get that up front right now so not interpreting that later. Mr. Potter stated the fact that there is a mobile home park someone would literally be looking at buying that out on an investment basis because of type of improvements that you would put in there, if only improve it, would not generate enough to make it worth while from the investment tax standpoint, because looking for larger scale investments. Glassheim also stated he understood the property had to have a structure on it and not sure Fairgrounds would even qualify. Mr. Potter stated that the Fairgrounds - there’s a racetrack , there are structures out there. Hamerlik stated that it was his understanding that the north end of the Bronson property because it didn’t have any structures on it, could not be considered a part of the Renaissance Zone.

Mr. Potter stated in long term he would recommend Zone A, which is the downtown area, on the basis of looking at vacancy rates in terms of the sq. footage of 225,000 and even if you add B, C and D would have about 25,000 if looking at from vacancy standpoint in comparison to the downtown area. He stated that the housing potential is stronger in the downtown area because they have two sets of housing they can work with, one in the multi-story structures in the down-town area and the other is the outlying area which lies around downtown; whereas in either B, C or D working with a limited amount of housing already in place and very little opportunity for multi-story buildings unless someone is going to come in and buy land, and clear out what is there and go up. He stated there is historical property in the downtown area. He stated for those reasons and based on data they have, would recommend Zone A, which is downtown.

It was moved by Babinchak to select as a location for the Renaissance Zone, Zone A, which is downtown. Beyer seconded the motion.

Beyer stated that when looking at sq. footages and rationale for Mr. Potter’s recommendation, it becomes apparent the Renaissance Zone was probably written for downtown, though not specified, for the various reasons for development that Mr. Potter spoke of - of a place that’s more compact it’s going to be the best which is limited to 20 blocks.

Glassheim stated that the coming of Engelstad the market should help Gateway in the vicinity, that traffic counts and market forces would help Gateway either in new construction or reinvest-ment because the market will focus more attention there and not be left out; secondly, almost certain there will be a push in the Legislature in 2001 to allow additional zones in the future. He stated that some people think that there is money available - there is no money available - that there is a tax allowance for investment in a renaissance zone corporation and thinks there will be
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two efforts in the Legislature - one to allow one or two additional 20-block zones, which could get the tax credit and no max on that, and second, to have a higher limit in the amount you can take for investing the renaissance zone corporations. Hamerlik stated he would not like to see Zone D left out, that’s really the gateway to Grand Forks, that they should move forward and go with A but start working for Zone D and start describing a specific area, should the Legislature pass legislation allowing for more opportunities whether it be another zone, etc. Babinchak stated she agrees with that but still need to look at the whole zone, all the way from the River all the way west, and stated that with Engelstad, etc. and market might dictate something there too.

Beyer stated that the Chamber Beautification Board is very targeted on that entrance into the city, that they are only allocated 1 mill each year, and that they would like to put some kind of entrance sign on that corner and spruce up that entry way, and when get to the next beautification round funding they will make a point of inviting the Gateway Drive Assn.

Brooks stated that every town needs a downtown, and they have really taken the time to look at areas, that timing is still a problem because we have other areas that don’t have the knowledge or background on a renaissance zone but have tried to look at them; and that we do come down to two areas and the point about the Engelstad Arena and University Village will hopefully help that area, but that the amount of dollars put into the downtown can be compared same way towards helping the downtown area. He asked when we establish this the State allows a tax break or exemption to fuel it and by the same token they expect the City to chime in with some kind of tax break (property tax) and he has a problem with that; that we’ve done a tremendous amount to bring the downtown back and figures show that we have a lot of vacant sq. footage and that concerns him but doesn’t know that this will help it, and thought that the amount of dollars and developers that stepped forward downtown had business plans in place. He stated that he’s happy that they’ve looked at these areas, that Gateway Drive is an area that stepped forward and that there’s an interest in that area and other areas have not come forward.

Mr. Potter stated that on the issue of the property tax exemption, that how much the City would decide to give is still to be determined, today only selecting the location; will have to make decision whether across the board and if get renaissance zone approval get x amount for y number of years and not obligated to make it across the board. Glassheim stated this will come back to committee if council approves this, and exact amounts and whether case by case and was encouraged that we have to do something, they would approve as long as we made some property tax effort and have to discuss this and craft what we will do, or let future councils do it, but it will not be across the board and doubts that it will be for anything but new investment, won’t be for existing investment but that’s still to be discussed.

Hamerlik stated that these are incentives to make this move forward , or the development will not take place; that if give a lot of incentives it can be an unfair playing field for other locations.

Carpenter stated that the new council is going to have to deal with South Forks Plaza, and it will
be significant issue that comes to the City, thinks it’s premature now for that issue and doesn’t fit
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within this discussion. He stated that the two choices that they’ve left out there, one choice that is ready that can attract future investments and make the renaissance zone successful is the downtown, that Gateway is not quite ready for it, and with the Engelstad and with University Village see what happens out there, that if the Legislature sees fit to give cities the opportunity to create a second zone, that timing maybe right for that; that he doesn’t know if he supports the idea of a second renaissance zone in cities or not, but maybe room for two, but time and early opportunity fits with one better than the other, though recognize a future need.

Glassheim suggested they add to the motion - and to instruct staff to begin drafting an application and criteria for the renaissance to the State. Babinchak and Beyer agreed to that. Dennis Potter stated that once the zone area is designated by the council then they start putting the draft document together, that this joint committee would retain continuing jurisdiction over that process and it would be this committee they would bring a number of issues for clarification and ultimately approval by the council.

Babinchak asked that they include in their motion to direct staff to start drafting the application and criteria for the renaissance zone. Beyer seconded.

Brooks stated that Gateway isn’t quite ready yet, that there maybe another round out of the next Legislature, we don’t know what rules and regulations would go with that, and that he would like to see the first area that they addressed as Gateway, and that may become a factor when the next one comes through, and in next round maybe a stipulation that those that have established renaissance zones will not be incurred in that until other towns have established theirs; would like to see Gateway or even South Forks as areas that they first address, and that citizens of Grand Forks who we are representing are feeling that there have been enough dollars put into downtown, and there has, but needed to put down there to put it back, and thinks first area need to address is one of the other areas.

Glassheim stated to clarify that none of this is grant money or loan money, nobody will get a penny of government money except covering some tax liability up to what they invest; this is an incentive and incentives do not go to people who are downtown, anybody in the city can invest in this and receive the tax credit, is a city-wide matter.

Upon call for the question the motion carried with Babinchak, Beyer, Carpenter, Hamerlik, Glassheim - 5; Brooks voting against the motion.

Chairman Glassheim stated that the motion will go to council on April 17 and this will be on the location and assuming it passes, will be returned to staff to begin the drafting process; and committee will call a meeting at a future date.

Moved by Hamerlik and Carpenter to adjourn; meeting adjourned at 12:50 p.m.

Alice Fontaine, City Clerk