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Grand Forks council approves Enclave PILOT despite public objections over legality and tax impact
Summary
After extended public comment challenging whether market-rate apartments qualify for NDCC 40-57.1 primary-sector PILOTs, the City Council approved a PILOT for Enclave Property Management (Latitude phase 2) 6–1; speakers urged an attorney general opinion and greater transparency.
The Grand Forks City Council approved a payment-in-lieu-of-taxes (PILOT) incentive for Enclave Property Management (Latitude phase 2) on March 2 after a contested public hearing and council debate.
Local business owner Andrew Krausnick urged the council to pause approval and request an attorney general opinion, arguing that PILOTs under NDCC 40-57.1 were designed for primary-sector businesses that bring new wealth into the state, not market-rate apartment or entertainment projects. “The payments in lieu of taxes provision was added to NDCC 40-57.1 during the 1994 special legislative session... The intent was never to let cities or towns use pilots to compete against each other for apartments, retail, or entertainment venues that just shift existing dollars around,” Krausnick said. He cited North Dakota Supreme Court precedent and requested that the council seek an AG opinion to clarify the statute.
Sean Beauclair, another member of the public opposed to the PILOT, told the council Grand Forks developed without such incentives for more than a century and said the city is now “picking winners and losers” at the expense of schools and existing businesses. “You have over 140 years where no pilots were needed to develop apartment complexes,” he said, and criticized vacancy and appreciation assumptions used in the city’s economic analyses.
Council debate touched on process and legal interpretations. Council President Sandy moved approval and Berg seconded. After discussion, the council voted to approve the Enclave PILOT; the motion carried 6–1 with Ocelsky recorded as dissenting.
The debate in council meeting minutes highlights two persistent tensions: whether PILOTs are being applied as originally intended for primary-sector, job-creating projects, and how much weight to give voluntary vacancy data and third-party economic analyses when awarding tax incentives. The council did not read an attorney general opinion into the record before voting; opponents requested the city seek that opinion before approving similar incentives in the future.
