Downtown Hugo's building receives 15-year tax incentive
Grand Forks developers received a tax incentive they requested in June for a downtown mixed-use building Monday night.
The Grand Forks City Council approved an application from Fire Thorn, LLC, for an 80 percent tax increment exemption (TIF) over the next 15 years.
Fire Thorn, backed by Kevin Ritterman of Dakota Commercial and Craig Tweten of Community Contractors, said it will offer 25 market-rate and 25 affordable residential units, a Hugo's grocery store and an Alerus bank drive-up branch at North Fifth Street and DeMers Avenue.
Alerus and the Grand Forks School district pay approximately $14,000 every year in property taxes for the property in question. Once Fire Thorn takes over and begins construction, city staff estimate the building's value of $881,700 will increase to approximately $7.8 million, meaning approximately $117,000 in property taxes every year.
With this TIF, Fire Thorn will only pay 20 percent of that for the next 15 years, in addition to the $14,000 property owners pay now.
Fire Thorn is the first Grand Forks TIF recipient since the city revised its tax incentive policy earlier this year. Under new rules, representatives from all four tax-eligible entities meet as the Local Government Advisory Committee to offer preliminary approval, before the groups—the Grand Forks City Council, School District, County Commission and Parks District—meet to vote on their own.
Before all of this, Fire Thorn submitted a pre-application and later paid $2,500 to submit an official application, fees that paid for a financial analyst's opinion.
Monday night, the council also approved a request from the school district to modify its parking lot boundaries so Fire Thorn can begin development. It will keep the same number of parking spaces at a new lot closer to First Avenue North.
Once it's finished, Fire Thorn's mixed use building will have underground parking for tenants and surface parking for customers.