Fargo has a new tool for pushing redevelopment into its older core, and it's already been used. On Oct. 26, city commissioners adopted a commercial redevelopment PILOT policy, short for payment in lieu of taxes, and then approved a 10-year, 100% property tax exemption for a $61.6 million apartment and commercial project at 300 45th Street South (via The Flag). The project vote was 4-1, with Commissioner Michelle Turnberg the lone no.
The break isn't locked in yet. Cass County and the West Fargo School District each still have to hold their own public hearings and decide whether to go along. An Oct. 21 city memo penciled in county consideration for early November and a West Fargo School Board review on Nov. 23, according to pre-meeting coverage from Valley News Live.
COVE Living LLC's application describes a building of about six and a half stories with 229 apartments and roughly 15,500 square feet of commercial space. It would connect to the existing COVE commercial building, which is getting its own renovation, on a 13.75-acre site the applicant described as mostly surface parking and underused land. Financing is about $16.8 million in developer equity and $44.8 million in loans.
Developer Shannon Roers told commissioners the new residential piece is on hold until the tax question is settled. "That project cannot go forward until we know whether or not we're able to obtain the pilot," she said, according to Valley News Live. She said it would meet the new affordability rule, roughly 11 workforce units, which Commissioner John Strand called "absolutely a game changer."
Here's what the break is worth. The city's direct share of the exempted taxes is about $166,000 a year, or $1.66 million over the decade. Across every taxing body, the exemption would total roughly $8 million over 10 years if the county and school district join. Once it expires, the combined development is projected to bring in about $1.1 million a year in new local property taxes.
The city's financial consultant, PFM, concluded that under the assumptions it reviewed, the project likely wouldn't pencil out without public help, though it also found lower construction costs, higher rents or both could change that. In an Oct. 2 letter in the meeting packet, Cass County Commission Chair Tony Grindberg wrote that the application doesn't meet the county's incentive policy and said he'd strongly recommend against county participation. He also questioned giving incentives to a project he described as having started construction months earlier.
The policy itself allows up to a 100% property tax incentive for up to 10 years in areas with high vacancies or economically obsolete buildings. Applicants have to pass a "but for" test showing the project needs public help to happen. Commissioners unanimously approved the baseline policy recommended by the city's Economic Development Incentives Committee, then added Mayor Josh Boschee's amendments. Those limit eligible projects to the area between 32nd Avenue North and Interstate 94, from the western city limits to the Red River. Projects must include housing, with at least 5% of units affordable to households earning no more than 80% of area median income for the life of the incentive. Sites that already have housing must at least double the unit count.
Boschee said 80% of area median income "is $64,000 to $69,000 a year, so that's workforce housing."
The same night, commissioners voted 5-0 to approve the 2027 engineering capital plan and the 2028 reconstruction and federal-aid lists, so design can start a year ahead. The 2028 list includes neighborhood work in parts of Longfellow, Hawthorne and Horace Mann, reconstruction of First Avenue North between Eighth and Third streets, Interstate 29 ramps at 64th Avenue South, and pavement rehab on Main Avenue between 45th and 25th streets.
Why it matters for Contractors
A project this size goes to a general contractor with real bonding capacity, so most small shops won't bid it directly. The opportunity is in the trade packages: 229 apartments means a long run of drywall, flooring, cabinets, plumbing, electrical and HVAC work. If you sub in Fargo-Moorhead, get on the GC's radar early.
Don't count on the schedule yet. The developer says housing waits on the tax decision, and the county board chair is on record against it. Watch the Cass County Commission and the Nov. 23 West Fargo School Board meeting.
The bigger story is the policy. Fargo now has a standing incentive aimed at infill between 32nd Avenue North and I-94, and every project that uses it has to add housing. That points to more mixed-use and multifamily redevelopment in older neighborhoods.
For site, utility and concrete crews, the 2028 street list is the nearer-term signal. Design starts now, so those jobs should show up in city bid postings once plans are done.