Fargo school board votes 5-4 not to participate in proposed downtown tax-incentive pilot
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Summary
After hours of debate over fiscal impact, housing definitions and vouchers, the Fargo Board of Education voted 5-4 to notify the City of Fargo that the district will not participate in a proposed 20-year tax-incentive pilot for a downtown housing project.
President Christensen Meineer convened the Fargo Board of Education meeting and, after a lengthy discussion at the request of the planning committee, the board voted 5-4 to notify the City of Fargo that Fargo Public Schools will not participate in the proposed tax incentives for the Central at the Horizon project.
The motion, introduced by Planning Chair Greg and seconded on the floor, instructed the board president to notify the city that the district would not participate “due to their duration and the relative community benefit,” as summarized in the planning committee recommendation. Greg framed the issue as the first of its kind for the full nine-member board and said the district needs a policy to guide such decisions.
Several board members pressed for more nuance and data. Board member Melissa cautioned that the federal and state rules for incentives are complex and said a “binary yes/no” vote does not capture the subtleties; she said the parcel is a former power plant with limited uses and suggested the project could still be beneficial for some residents and new teachers. Melissa told the board she could not support the motion on the floor in its current form.
Other members emphasized fiscal risk. Board member Ally said the incentives reduce taxable value now and “we have buildings that we need to repair,” adding that the board should prioritize immediate needs such as teachers and bus routes instead of long-term incentives that could last decades. Ally framed the choice as a trade-off between future development incentives and present district needs.
City and housing officials joined the discussion to explain how the program and vouchers would function. A city representative and the housing authority clarified that the proposed project would be required to accept housing vouchers and that voucher holders typically pay 30 percent of income toward rent, with the housing authority covering the rest. Chris Brungard of the Fargo Housing Redevelopment Authority said: “This property … is required to take all vouchers. If there’s a voucher holder going there and they want to move in there, they would be eligible to move in there.”
Greg and others questioned whether the development would actually be built without the requested public assistance (the “but-for” test). Matt Schachtenberger of PFM, the consultant who ran the financing and pro forma analysis, said the project’s debt-service coverage did not reach conventional lending thresholds without public assistance but did when the proposed incentives were included, explaining why the developer sought support.
Several board members argued the decision should be deferred until the district has a written policy on incentives. Robin Nelson said she would not base her vote on the merits of the project but on the need for a clear board policy before committing. Others said the board could notify the city it would be unwilling to participate as currently proposed yet remain open to negotiation.
After a motion to call the previous question passed 7-2, the board held a roll-call vote on the substantive motion. Ann Marie recorded votes as follows: Robin Nelson — yes; Uhlenberger — yes; Birklin — no; Clark — yes; Day — no; Gullickson — no; Jason Nelson — yes; Kristen Nelson — yes; Christensen Meineer — no. The motion passed 5-4.
The board did not adopt a written district policy at the meeting; several members said planning and governance committees are developing a draft policy and that negotiations with the city could proceed if the board directs it in the future. The mayor had appeared in public comment earlier and asked for a joint walk-through of city policy with the board, noting that tax exemptions represent “less than 2% of total tax value” in Fargo.
What happens next: under state law, boards must notify the city within 30 days if they decline participation, but notifying an intent to negotiate can preserve a path to compromise; several speakers confirmed that a notice of intent to negotiate may be filed within the 30-day window and negotiations can then continue beyond that deadline. The board’s formal action tonight was to direct the president to notify the city that Fargo Public Schools will not participate in the proposed incentives as presented.
