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Council advances Beacon development incentives; councilor recuses and concerns about taxes and vacancy raised
Summary
Councilers set a July hearing and approved incentive actions for the Beacon project after discussing unpaid taxes and developer commitments; Council member Lansky recused from voting and members debated vacancy-rate, precedent and legal risk.
The Grand Forks City Council moved forward June 1 on a package of incentives for the Beacon development, setting a public hearing for a new tax-incentive pilot in July and approving related items after discussion about unpaid property taxes and legal precedent.
Business owner and commenter Andrew Krasnick told the council he was "very concerned" about using incentives for completed buildings and said the city's vacancy rate — "over 5%," he said — undercuts the public-purpose case for additional tax abatements. Krasnick also urged the council to seek a clear opinion from the attorney general to avoid legal exposure.
City Administrator Todd Phelan and staff said the developer intends to bring taxes current as part of a new development agreement; "The developer intends to, pay the taxes in full," Phelan said, and staff said they would make tax payment and title conditions part of any final agreement. Finance and legal staff also said outstanding taxes would be addressed before a pilot or revenue bond moves forward.
Council Member Lansky asked to be recused from voting because of a personal investment history she described; the council granted the recusal. After debate about the pilot and the Renaissance Zone incentive for the third building, the council approved the action items on the Beacon package with one dissent and one recusal recorded (final tallies recorded as motions carrying with the specified recusals). Council members noted that Baker Tilly’s financial review described the project as "thin" on debt-service coverage and said bundled incentives would reduce developer risk and help complete the first two buildings.
The council will return to the matter at the July public hearing for formal consideration of the proposed pilot incentive and to finalize development-agreement conditions, including tax cure and other contractual safeguards.
