Clay County Commission

Tax increment finance district seeks an additional 5 years

Dan Haglund

Some truly eye-popping Moorhead Center Mall redevelopment numbers are unveiled, along with a little request for the Clay County Board of Commissioners on Tuesday.
The president/CEO of Downtown Moorhead, Inc., presented a letter of request for approval of Moorhead Center Mall development tax increment finance district development extension from five to 10 years.
The request was made before the board in Moorhead during regular weekly meeting hours.
“This has come together fairly quickly,” said Derrick LaPoint of Downtown Moorhead, Inc. “Just last week we had an opportunity to go for this five-year extension to a TIF (Tax Increment Financing) rule.”
LaPoint explained that in current Minnesota law, projects must make substantial gains toward completion within five years of the certification of the TIF district. He said Moorhead does not yet have this TIF district created, but that it will be within the next couple of months.
“We know this project (Moorhead Center Mall area redevelopment) is large, larger than most TIFs you see across the state” LaPoint said. “And we already are expecting that we would be pushing toward that 10-year timeframe to gather that increment and see that full completion.”
LaPoint said this extension request does not change the duration of the TIF, or any related local funding, but he says that if anything it helps gain much increment as possible for the district. It would help the overall tax base within the city of Moorhead, as well as the county, he said.
A Minnesota State House Tax Committee hearing was scheduled for Wednesday in St. Paul, headed up by Rep. Heather Keeler, DFL-Dist. 4A. LaPoint said he planned to attend as well, and said if it proceeds to the House it could move on to the Senate for consideration.
“We are seeing a positive outcome with this,” LaPoint said. “This project has garnered a lot of attention from the state, including most recently a $1 million deed redevelopment grant that we received, which is just fantastic news.”
LaPoint said the Moorhead grant represented fully half of the $2 million available grant dollars statewide, as the other half was earmarked for the Minneapolis-St. Paul metro area.
Then LaPoint went through the estimated construction numbers, which will be in the Wednesday presentation in St. Paul.
The estimated construction investment: $500 million of new value.
Of this, nearly 1,300 housing units will be added, representing nearly $250 million in new construction value.
There will also be $105 million in civic space, $58 million in commercial space and 2,200 parking spaces. The civic space will include a new library and community center.
“So, we have a lot going,” LaPoint said. “And again, the reason why this request is so important is because of the amount of project that we have. Most of these TIF requests are a one building, maybe a second building that has a second phase to it. The fact is we have potentially 10 mixed-use buildings within this 18-acre site. We are seeking that flexibility to give us the most benefit to capture that increment.”
LaPoint said what’s unique about this project, and the need for a TIF time extension, is that if construction was rushed, multiple buildings would be completed and opening in tandem, which would flood the market with available housing units simultaneously.
“We don’t want to put the project in jeopardy,” LaPoint said. “It has to be phased appropriately, that we are seeking the right tenants and seeking the number of residential units that we want to uplift as well.”
Commissioner David Ebinger, Dist. 5, added an observation after LaPoint’s presentation.
“This is an exciting time,” Ebinger said. “And this activity is long overdue. When I came here in 2006, there were discussions about this and the (11th Street) underpass, and now it’s all taking place and it’s pretty gratifying seeing.”
The board approved the TIF extension request.