The West Fargo City Commission meeting last night (March 16, 2020) included a vote to approve both a TIF (Tax Increment Financing) and an additional city contribution of approximately $2.5 million.  The combined $5 million (approximately) will pay for 2 out of 3 floors of public parking that will be included in the proposed Bell Tower project on Sheyenne Street.  This proposed 8 story building will be on the current site of Bell Bank. I voted against approving these dollars and I wanted to explain why. 

To start with, I’m a fan of the project and the ongoing redevelopment of Sheyenne Street.  I like the additional 300 public parking spots that will make up the three floors of parking but I would argue that 200 would be sufficient given the cost. 

First, let’s explain how a TIF district works.  Let’s use a hypothetical example of an existing building that generates $20,000 a year in property taxes.  The owner is going to tear it down and build a new building that will generate $100,000 a year in property tax.  The incremental tax is $80,000.  When the city approves a 15 year TIF what it means is that they are taking that estimated incremental tax ($80,000) times 15 years and providing the $1.2 million as a financing mechanism to the project.  The city loans that money to the project.  The taxes over those 15 years pays off the debt.  That means, that no additional property taxes are received by the city for 15 years.  The current project on Sheyenne and 32^nd Ave (the Lights) involves a 25 year TIF that was approved by a prior commission…I will never vote to approve a TIF that long.

My issue last night though wasn’t the TIF.  The 15 year TIF is at the top end of my comfort zone and provides the developer in this situation about $2.4 million in financing to pay for one floor of public parking (about 100 spots).  That is appropriate and a great benefit to the downtown area.  My vote against the motion was based on the additional $2.5 million the city agreed to provide out of our economic sales tax fund.  That accounts for almost the entire amount the city receives into that fund in a year from sales tax.  Given the current economic risk to our community and local businesses I felt it was a poor decision to commit such a large amount for parking I’m not sure we need and with dollars that I know we could have used elsewhere to support our business community in the coming months/year. 

The project will be great and the parking might be necessary in the future but it’s a huge investment by the city at a time when I’m not sure it was appropriate.