City Commission - Regular Meeting

Well, good morning, everyone. Thanks for joining us for our joint conversation between the Economic Development Incentives Committee, which is chaired by Commissioner Peterson and the City Commission. The goal or the point of this meeting is, you know, as we've had ongoing conversations about economic incentives, and giving some direction to the EDIC, as well as what the Commission can expect for conversations in the coming months, is also primarily, I think, to see if we can advance some more specific conversations going forward. As a reminder to everyone, EDA, you know, there has been this o

No, Mr. Mayor, just gratitude. I realize how busy everyone is and adding another meeting to the schedule gets to be cumbersome and then some. So especially those that are somewhat part-time and certainly those that are volunteer. So gratitude. Looking forward to good discussions, Mr. Mayor. Thanks.

Thank you. Thank you. With that, Ms. Crutchfield.

Yeah, let's go with introductions. Mr. Sponskowski, and we'll go around this way.

Michelle Turnberg, Fargo City Commission. Nikki Gullickson, Fargo City Commission.

Anyone at the table have any questions or comments to add based on your experience so far? And as part of this, again, this is an evolving process as, again, we primarily had one staff person who we've learned really shepherded projects through, right? And then engaged with both the committees and the staff. And now that that isn't there, we're certainly hearing from the development community about what does this look like? And so trying to provide this clear path of what's your front door? Who will you work with depending on the incentive? But then I think for us to really think, and whether

Mr. Mayor, I'll jump in. So maybe I can share some of my background regarding my 12 years in my prior office, as well as my background with working with big developers and those sorts of things in construction. I think one of the things I looked for, and this is what I looked for, where I struggled with the reviews prior was often with development fees, architectural engineering fees, and then cash flow of the building, right? The incentivization needs to exist because the building can't cash flow, or but for some other thing, literally but for, that's why they say that, but for some other thi

Right. And the question I have for you, you know, you said, so not to get you caught in someone making too much money, but it's money on the front end versus throughout the life of a project. That's different than what you're saying. All those fees come up front and benefit an entity at the risk of maybe an incentive, correct?

Actually, it's both. So you can also see cash flow and accelerated rents too, right? So if you're using this incentive to just become market rate, let's say I want to pay more or I want my renters to pay more, I'm going to use this incentive to Maybe not buy it down, but I think I better say this. The easy answer is both. So are you making too much as a developer to begin with? Are the architects and engineers making too much? Because what happens is we have multiple examples of this where the architects are the brothers or sisters of the developer. So you're going to pay your, literally, and

Mayor, one, and I'm really glad we're having this discussion. It's a few years since we have, and in my mind, it's really critical. We're driven by policy. And that policy is where we land. So this evolution and making of policy is really, really critical. One thing I would like to know as we go forward is what do others do? What does the state have? What do statutes call for? What do our neighbors offer? And how do we fit into that lay of the land with others? Just so I have a sense of do we or do they or do we all or do we not while they do offer incentives? That to me is a really important

And to me, I am looking forward to this conversation to help our public as well better understand the use of these things rather than, I think there's a perception out there that, oh, there's a project, we'll just give them some money. And that really isn't how and why we do that, but I think that perception is there. So to understand all the work that goes into it, all the evaluating, all the data, and the purpose of using it really is important to me.

And for me, I think part of that is also looking at our community, right? We have the housing study. We know what we want in our market or how many units we're trying to get to, but also within that is a greater breakdown of types of property, right? So as we talk about whether someone's looking for a market or above market or below market or affordable, however those are all defined, maybe sometimes we aren't incentivizing some, we don't allow the incentive because we already have, the data shows us we already have enough at market. We need to get that sub market or more at market. You know,

I think it's pretty difficult when we have some businesses who have projections and then go ahead and sell their property to a church, and then in the future we have absolutely zero improvements to our neighborhoods, which were promised improvements. So I would like to see us have some sort of clawback where businesses that are not complying with what they said they would either have to pay what they were given or some sort of reimbursement. I've spoken with the superintendent and school board members who say this is absolutely crippling to their budgets. The county has also spoken up about it

Anyone have anything to comment or add based on what's been said?

And I think what I'm hearing or my goal as mayor is how do we most efficiently work with our boards and commissions to meet these outcomes, make sure that they're shared? Because again, this is not to disparage any previous commission or community leaders, but I think there's assumption and maybe there's truth behind it of if an applicant was brought forward, it was said yes because it was an applicant, And that was it. And what we don't know is all the people were probably told no before because what they were trying to do didn't fit within something that was already in policy. So we don't kn

Mr. Mayor, thank you. Mr. Strand touched on something, as did one of our EDIC board members, and this is what sort of jogged my memory right now, Ms. Crutchfield, is that I think that as many black and white things are as possible to achieve, the more things you can achieve in terms of guardrails of black and white art, is better. It's a better thing. I said that incredibly poorly. But there is going to be a delicate, nuanced dance on some of these items. And I think that's what, whether it's the EDIC board or any other board, to my mayor and commissioners, the people we put on these boards ac

Thank you. And as long as we're just for the moment brainstorming, I think I've noticed, for example, downtown, and I'm listening to our downtown businesses and their leaders and the challenges and the needs downtown, and they're pretty quantifiable with a growing, expanding downtown. But what occurred to me when we're in this process is, yes, we have this project that we filled it with all these people, and we have this project, and we filled it with all these people, and we have this project where we emptied out people and filled it with all these people. We have a 5, 10, 15, 20, sometimes 2

And Commissioner, what I'd add, I think, is the previous commission, you all did that with the Lost Creek conversation, right? And staff in terms of a budget proposal, and we moved through that. But I'm curious, Ms. Crutchfield, is that something from the planning world of, are those layers you start adding on to some of these questions? We look at transit, public works, all those other things, especially whether it's outfill or infill, right? There's going to be impacts when we add people or types of businesses and whatnot.

What I'll add to that conversation, you know, it's in the packet that Nicole and the team provided. So the fourth to last page on the backside of your packet is, again, that language of that commercial redevelopment policy. And then I further handed out two pages from the 2024 growth plan. And really just to kind of help visualize What the growth plan says, where we should prioritize some infill, and that's the goal of the commercial redevelopment, is how do we take existing properties or land use that we did things in a different way. Again, a lot of times it's parking, right? We are a commun

Thank you. One of the topics that I've been wanting us to explore for years, actually, is inclusionary housing. And hundreds and hundreds and hundreds of cities across the country do this approach where if you're... There's two approaches. If you're incenting or if you're not incenting, if you're building apartments, especially if you're incenting it, that a certain percentage of them, 10%, 15%, 20%, are set aside as affordable housing. Now, we all know this is a huge need. And there's examples out there of what others do. And I think we can learn from them. I want to say there's 600 and some,

All right. Well, thanks all. And team, I hope you're getting what you need. And I know we want to get to Mr. Sponskowski and the project he's working on too for an update. But anything else to add before we kind of get in our final conversation on the review process? The conversations around, we use the term clawbacks, but we're learning that we might not be able to do that. But how do we at least monitor things on a regular basis and put a stop if need be? So turn it over to you, Mr. Sponskowski.

Thank you. Commissioner Strand, then Mr. McClain.

Just a little history from my perspective, which is just mine. When I landed here 10 years ago and I approached our economic committee about incentives, especially with regards to creating new jobs, one of the recommendations I had, well, if you're going to create new jobs, don't be starting at $7 an hour. The criteria we were using up until that point was $7 to $9, $9 to $11, and $11 to $13. I go, if you're not going to do a living wage, we shouldn't be incenting people. We don't need to incent people to put employees into poverty. So I think that needs to be an ongoing, evolving level that w

And what would the, I don't know, what would be considered a living wage here right now? I'd like to compare that. Because it should be a living wage.

Thank you. Mr. McClain, then I think Commissioner Peterson.

Mayor, thank you. Commissioner Strand, we called them phone centers when we were making fun of them. Same thing you were saying. We're incentivizing folks that are barely making ends meet. It doesn't financially or logically make sense. Could you please share that matrix with us, please? I think it's incredibly valuable. And again, I know it's only a shot at it to begin with, and I think that getting some eyes on might be prudent for this group, both City Commission as well as EDIC, because depending upon how that matrix yields, there we go. Yeah, I mean that, could you get us a PDF of this, p

Are we in the negative of every job required in actual jobs?

There's some pretty bad ones on here, and hopefully we can rectify this.

Thank you. And I believe one of, in my opinion, again, one criteria that we should all aspire to is applicants need to have met their previous application criteria. If anybody has been before us before and gotten previous incentives, did they do what they said they were going to do? And I think that's a starting point. If they didn't, why are we going down this rabbit hole further? And I'll be literal, and Commissioner Turnberg, you alluded to it, but in this incentives development commercial project, the public seems to think it's about the ROARS project on 45th. You know, the former driving

To the spreadsheet. I think one area for you all to think about is, and I appreciate the context, Mr. Smolenskowski, that obviously this isn't all the projects, this is just the ones that had a deficiency identified in their annual review, is starting with EDIC, but commissioners to help inform EDIC of like you talked about the weighting, right? So yes, maybe they were down 10% of jobs and we're okay with down 10%, but the wage increase was 20% above. So less people are making more money and maybe we're okay with that or how we evaluate that. And of course, that's gonna be a moving target ongo

Mr. Peterson? Yeah, Mayor, thank you. I think there could be nuances within each, right? So as Mayor Boucher just said perfectly, if you've got someone projected to make $50,000 an hour, 100 people at $50,000 an hour, but you yield 75 at $200,000 an hour, is that really a loss? I think that most people would say no, right? So I think within the nuance, whether it's a 50-50 baseline, but then within each That can be the tweak to me. That's your measuring stick. But again, if you have less employees, but they're making exponentially more than projected, I contend that's a win. So I think you can

Thank you. Anything else for the good of the order?

Thank you I'm curious with the EDIC committee with this commercial redevelopment policy that was advanced to us a couple times now. I A couple thoughts. Has that been modeled? Have we modeled that after what others are? I'll say this, I'll back up. Nationally, a lot of people are talking about commercial challenges, commercial space vacancies, and how do you convert commercial to housing? That's an ongoing. But is this model that came to us? And a second question. Was this modeled after any of them, or did we learn from others, or did we pick and... Mirror what others have successfully done or

It's it's my understanding commissioner, and I'm happy to be corrected if I go off course here is this was So mr. Gilmore helped put this together based on what he was seeing within our community in terms of again the growth plan what our developers were talking about some of those things so it was a Pretty locals I can't speak to if he looked up here in cities or jurisdictions in terms of if that helped drive it. And I don't know if staff have any different than that.

And I might continue. I think we can learn from the National League of Cities and their member partners, partner members, whatever. But we're not reinventing the wheel here. Another elephant in the living room, sorry, but is we all received this letter from the county. And I think we need to have a conversation about that at some point, understand the implications of that. Why are they saying what they're saying? What are their concerns rather than just file it? That really got my attention, that letter from Tony Grinberg and the county.

I don't want to put you on the spot, so you don't have to speak to it since you didn't author it, but any input or guidance?

Absolutely. And I think that's the value of, like, the proposals of annual check-ins or those ongoing conversations. conversation for edict specifically isn't no longer just there's a project what do you think it's also how are we measuring how are we and that's why i think i what i'm seeing with all our boards and commissions is how can we do a better job of engaging we have you for at least an hour a month how do we maximize that time with your expertise and your interest um so that we can do a better job of driving the bus for the whole city for sure um mr swanskowski ms crutchfield do you

Anything else before we go to the order? Commissioner Strand. Will that be on our next agenda?

We're working towards it. Are we ready for that? Well, I guess that's a good pulse test for commissioners. Are you ready to have the conversation? I'd like to.

I am, but I would like us to have that conversation before we're putting it on an agenda to approve the policy we just got to. I'm not sure the policy is where I need it to be yet, but I don't know. In my mind, we need to be policy-driven and dot our I's and cross our T's and not have any holes in that. I'm not sure I'm there yet to be able to vote on, because it's convoluted with the project we think it's about, and it's more than that.

All right. Thank you all. We'll adjourn. Appreciate your time, and enjoy the rest of your day. The sun is out.