Jill Schramm/MDN Minot City Manager Harold Stewart speaks to the Economic Development Plan Review Committee Friday. Committee member Beth Feldner and Community and Economic Developer Brian Billingsley listen at right.

Members of a review committee tasked with recommending an economic development direction for Minot heard both advantages and disadvantages of local tax incentive programs during their discussion Friday.

The Economic Development Plan Review Committee has received information on efforts of the state and Minot Area Chamber EDC to enhance economic development and has begun looking at programs offered by the City of Minot.

Megan Ross, who with her husband owns the downtown building housing 2D Ink, spoke about the benefit experienced through the city’s Facade Improvement Program.

“Up until we were presented with the opportunity to do the Facade Improvement Program, we made the changes that we could feasibly do as small business owners,” she said. Modernizing and making aesthetic changes to an old building wasn’t possible until the facade program, though.

“This was just a huge opportunity for us to express the pride that we have being business owners and property owners,” Ross said.

City Manager Harold Stewart spoke about a conversation with a big box store representative, who asked about incentives Minot can bring to the table for his company. Minot provides no incentives to retail businesses.

“We’re still on a list of expansion for them,” Stewart said. “We were on a list of 35 communities that they wanted to expand their market into and so, it’s not a matter of if we get them. It’s a matter of when. The question for the community is what kind of control do we want to have in incentivizing them to come sooner rather than later? Do we want that to happen in three to five years, or do we want that to happen in 15 to 20 years. Those are the factors we are debating here.”

Stewart also referenced a conversation with a developer who noted the return on investment in Minot isn’t as high in Minot as in communities in other states. Incentive programs are a key factor in these instances for developers weighing an investment, he said.

Committee Chairman Mike Blessum, a city council member, acknowledged data showing the increase in property values because of the Renaissance Zone. However, he questioned whether that investment would have been made without the tax breaks of the zone. He also questioned whether the zone is picking winners and losers by limiting the incentives to property owners within a defined area.

Committee member Justin Hammer spoke about a Renaissance project he was a partner in nearly 15 years ago. The group had properties in different communities but decided to develop its property in Minot.

“The Renaissance Zone is what made that project go to the top of that list and get done,” Hammer said. Property taxes paid on that property went from $1,000 in 2018 to $19,000 in 2019 when the tax breaks ended, and they have risen somewhat since then, he said.

“That was a project that could be on the win side,” he said.

Community and Economic Development Director Brian Billingsley also spoke about a potential buyer for a dilapidated downtown building. The building will be costly to bring up to code, particularly with the need to install fire suppression sprinklers, but it could qualify for Renaissance Zone tax breaks..

“Rather than have him walk away and not invest the money in that building, this program is designed to keep them interested in moving forward to help revitalize our community,” Billingsley said.

“This is a good conversation because I think it helps us understand that there are places for it. There may be times when this is the right tool,” Blessum responded. “It’s really a matter of making sure that the tools are honed at all times.”

Committee and council member Paul Pitner said community input goes into selecting the Renaissance blocks. The goal is to select blocks where property owners are interested in investing, he said.

“A block that isn’t seeing investment is a wasted block,” he said. “I look at this – How do we get those from being a thought to being an actual project?”

Committee member Jordan Nelson said he sees on paper and in theory that the programs have benefits but questioned how to square this with taxpayers who are concerned about the tax burden they carry.

“All of these things put stress on the rest of the property tax base,” he said.

Taxpayers see the Tax Increment Financing incentives that North Dakota cities have given one entity that didn’t do well, he added.

EPIC Companies, which received TIF financing from the City of Minot for the Big M Building and The Tracks projects, is in bankruptcy.

“I’m not always hearing that the benefit is matching what we like to think. The citizens aren’t seeing that,” Nelson said. “I don’t know if the attitude is there to support increased usage of these things.”

Since adopted in 2001, Minot’s Renaissance Zone has received 107 applications, of which 83 have been completed and 12 are underway. Another 12 were either incomplete or were denied, Billingsley reported.

The committee plans to continue its discussion on city economic development incentives when it meets again Friday, Dec. 20.