Grand Forks School Board OKs hotel tax break – Grand Forks Herald

GRAND FORKS – School Board members in Grand Forks have apparently been wary of tax breaks for developers since at least the Clinton administration.

“The Grand Forks School Board has been informed that the City Council is considering granting tax increment financing to major development projects as opposed to using the Growth Fund to support these projects,” board member Rod Mittelsteadt wrote to Grand Forks City Council members on behalf of the board in February 1994. “We respectfully urge you to utilize the Growth Fund because it was intended for this purpose and it does not have the long term negative effect on tax revenues as is the case with tax increment financing.”

Present-day board member Doug Carpenter, himself a former City Council member, brought that letter to Monday’s School Board meeting, where he was the lone vote against a plan to offer a fundamentally similar tax break to an upscale hotel and events center planned in the downtown Edgewood Corporate Center. Board members voted 6-1 on Feb. 14 to approve a “payment in lieu of taxes” plan for a project that would turn the building on North Fourth Street and DeMers Avenue into the Olive Ann boutique hotel . Absent were board members Shannon Mikula and Jackie Hoffarth.

“I think they need to have better discussion of what other sources of revenue that they have that could do some of these deals,” Carpenter said. “And if it is a need, well, ask the public for more money if they need it, versus relying on us to just go along with their requests when they come.”

The “PILOT” plan, much like the tax increment one Mittelsteadt worried about nearly 30 years ago, means that, if or when the redevelopment ratchets up the hotel’s value, the Olive Ann’s owners would, for 15 years, only pay a portion of the taxes they otherwise would on that increased value. Once those 15 years are up, they’d pay property taxes as normal on the full value of the revamped building.

Proponents of the tax break noted that it might be a token of goodwill to city and business types as the district weighs future property tax referendums and works to build a career and technical academy. Others noted that the hotel could ultimately be a spot for district students to work or intern, and it could be a source of foot traffic for sometimes-belaguered downtown businesses.

And Grand Forks Public Schools wouldn’t be putting anything on the line, financially, by approving the plan because the plan cuts taxes on as-yet-unrealized increases to the property’s value, not the present-day property tax revenue the district currently levies on it.

“We are not sinking money into this,” Board President Eric Lunn said. “If Olive Ann goes belly up in 10 years, we’re not out any money. In fact, we’ll gain money because that building will still be worth something even if it financially collapses.”

District officials negotiated with developer Phil Gisi earlier this month, striking a deal that would make the tax break for the hotel marginally less generous . Gisi said it would mean fewer hotel rooms in the development.

Biermaier is new activities director

Also Monday, board members unanimously a ppointed Mike Biermaier the district’s new activities director . Biermaier, who met with some board members on a Monday night tour of Central High School, currently holds that job at Thief River Falls Public Schools in Minnesota.

He was one of six candidates interviewed by a panel of district officials and staff earlier this year.

Biermaier’s job itself is set to be new, but it comes after a reorganization that, in effect, swaps a districtwide athletics director for a districtwide activities one and replaces high school-level activities directors with high school-level athletics ones. One of Biermaier’s first orders of business will be to help the district hire the two school-level staffers. It doesn’t formally start until July 1, 2022.

Also interviewed for the position were:

  • Gabe Dahl, an associate principal at Grand Forks Central High School.
  • Kevin Forde, a consultant who was, until January, the interim director of athletics at Saint Xavier University in Chicago, Illinois.
  • Tony Bina, an associate principal at Red River High School.
  • Mark Rerick, Grand Forks Public Schools’ athletics director.
  • Scott Koberinski, the activities director at East Grand Forks Public Schools.

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