EDA sends draft TIF and tax-abatement policy to city council public hearing

The Economic Development Authority of East Grand Forks City voted Wednesday to send a draft policy on tax increment financing (TIF) and tax abatement to a city council public hearing June 16.

The Director told the board the draft, which was reviewed by the loan committee and municipal advisers, is intended to be readable and to limit risk for the city while prioritizing projects that deliver clear public benefits. "I brought it to the loan committee back in early April and there was a consensus of, yes, we wanna bring this forward," the Director said while describing the policy's purpose and the need for clear expectations and front-end controls.

Board members discussed how TIF differs from housing-focused TIF and tax abatement. A staff member explained redevelopment TIFs generally require more than 50% of buildings in a district to be blighted or substandard, a condition that would exclude most of downtown today, while housing TIF can be used on open land and commonly runs for a 26-year period. "As it stands today, nowhere in our downtown would qualify," the staff member said, noting past downtown apartment projects had used redevelopment TIF funds for facade improvements and loans that were repaid.

Members also asked whether the Simplot property could qualify for redevelopment TIF. Staff and members said it likely would not under current law because substandard structures were removed; they discussed alternatives including tax abatement, other city financing tools, combining parcels, or pursuing special legislation if development stalls.

A committee member moved to send the draft to the city council public hearing; a staff member seconded and the motion carried after recorded "Aye" responses in the meeting. The Director said the next procedural step, if no edits are requested, is the June 16 city council public hearing for final approval.

Carla, a staff member who presented the financial packet earlier in the meeting, also noted the EDA general fund shows a planned negative year-end cash balance that the budget anticipates covering with an internal transfer.

The board received updates on property sales staff is handling, outreach and social media metrics, and was reminded there are no regular EDA meetings scheduled in June or July unless an emergency meeting is called. The meeting adjourned following the vote to forward the policy.

The public hearing at city council is the next step for the draft policy; the EDA did not identify specific incentive recipients at this meeting.