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EDIC approves property tax exemption schedule for Cut the Skyline redevelopment near NDSU
Summary
The committee approved a multi‑year exemption schedule for an 80‑unit apartment project developed by Rohrer/affiliates near NDSU; PFM presented underwriting showing assistance improves IRR and debt coverage and staff described eligible demolition and utility costs documented under the city’s renewal plan.
The Economic Development Incentives Committee approved a structured tax exemption to support an 80‑unit apartment development on a site formerly occupied by seven single‑family homes near North Dakota State University.
Jim Gilmore described the site and the city’s 2018 renewal plan that identified the area as eligible for assistance. Rohrer’s development group (acquirer) demolished several existing homes after the plan adoption; the developers now propose an 80‑unit building with interior parking. Gilmore said eligible TIF assistance could reach up to about $2.1 million in nominal terms, but when limited to a 15‑year capture period and phased payment the present value was estimated at roughly $1.15 million.
PFM’s Matt Schnacklinburg said his review produced an estimated IRR of about 7.6% without assistance and about 10.7% with assistance; debt service coverage in the first 10 years fell below a typical 1.2x threshold without help and met or exceeded it with assistance.
Shannon Rose Jones of Rose (development team) outlined the project: 88 residential units (a stated mix including efficiencies, one‑, two‑ and three‑bedrooms in the transcript) and parking consisting of 60 interior stalls under the building and 48 surface stalls behind the building, for a total footprint that increases density substantially from the prior seven units. Rose Jones said the developer’s existing student‑housing projects in the area are fully leased and that proposed rents are consistent with those comparable properties.
Gilmore walked committee members through an exemption schedule the developer proposed: the assessor’s current combined value for the seven lots produces roughly $2,700 per year in property taxes now; under the proposed phased exemption the city would receive modest tax receipts in years 1–5 (existing value), then an increasing share in years 6–10 (approximately $63,000 annually), years 11–15 (approximately $126,000), and after year 15 an estimated $252,000 annually as assessed value fully phases in. Staff said the city will document demolition and utility costs from 2018–2025 and credit those documented expenditures against the eligible assistance; if documented costs are lower, the incentive would be adjusted downward.
Committee members asked questions about interior vs. surface parking and demolition documentation. The developer and staff confirmed the parking figures and the city’s process for verifying documented demolition and infrastructure costs. The developer noted two demolished houses included hazardous materials (one former meth lab) discovered during demolition, underlining public‑safety reasons for removing blighted structures.
A motion to approve the exemption schedule and TIF approach carried by voice vote; the transcript records no roll‑call tally. Staff said it will continue to document eligible expenses and finalize incentive details.
