EDIC conditionally approves Bison Lodge pilot, requires full departmental sign-offs

The Economic Development and Investment Committee approved a conditional payment-in-lieu-of-taxes incentive for the Bison Lodge townhome redevelopment at 11th Avenue North and 17th Street North, contingent on final sign-offs from the city’s planning, engineering, fire and building inspection departments.

The committee’s discussion centered on financial viability, site constraints and the need to avoid approving projects before technical reviews are complete. Committee member Jim Gilmore moved the conditional approval; the motion was seconded and carried.

The committee heard financial findings from Matt Steinberg, financial advisor with BFM. Steinberg said the developer’s proposed sources included roughly $275,000 in equity provided via a life-insurance–backed loan from one applicant’s parent and that the project’s projected internal rate of return would be about 4.24 percent without public assistance and about 8.85 percent if the committee grants the proposed 100 percent PILOT for seven years under the revised core-neighborhood policy. Steinberg also reported that debt-service-coverage ratios were low in early years: under 1.0 in year four without assistance and about 1.11 in year four with the proposed PILOT, rising to about 1.3 by year 10.

Developer representatives Nicholas Janes Rich and Betsy Janes Rich of Bison Run Rentals LLC said they planned to operate the development long term and that family financing and an existing banking relationship would support the loan if additional equity were required. "Basically, we're just requesting the pilot program," Nicholas Janes Rich said when presenting the project and the developers’ expectations for feasibility.

City planning staff raised technical concerns about the site. Mark Williams of the City of Fargo planning department said the site is tight, has not completed departmental building-permit review, and that committee members should not assume an EDIC approval substitutes for required permitting. "We just don't want the assumption that this approval automatically approves the permitting," Williams said, urging that the project complete the departments' site-plan-review checklist before the committee gives a final thumbs-up.

Committee members discussed timing: the developers said they hoped to begin construction this fall and complete the project by August, but staff advised that delays are likely because it takes about a month to get items onto the city commission agenda after committee action and that a full site-plan review is multi-departmental. The committee resolved to make EDIC the final stop in the process going forward and to use a checklist/flowchart to ensure planning and engineering sign-offs occur before projects reach the committee.

Next steps: EDIC continued the substantive conditional approval pending final, multi-department site-plan review and approvals. Staff said they would expedite the reviews where feasible and return the item to the committee after outstanding technical issues are resolved.

Details recorded at the meeting: the developer's stated sources included $275,000 equity from a life-insurance loan; building cost estimates cited in committee discussion were approximately $1,800,000, though bids had not been solicited. Committee members flagged operating-expense assumptions and rent comps as items requiring closer underwriting review before any final financial commitment from the city.

No alterations to the proposed PILOT period were recorded in the motion; the approval language was conditional on receipt of the required departmental approvals and compliance with the land-development code and site-plan requirements.