City of Grand Forks Staff Report GRAND CRS ‘Agenda Item: Block V LLC Tax Increment Financing (TIF) Pre-Appliation ‘Submitted by Todd Feland, Cty Administrator ‘Staff Recommended Action: Invite applicant fo submit Rll TIF application ‘October 35, 2019 ~ Committee Recommended Acton: NA ‘November 42019 ~ Council Action: BACKGROUND: ‘The City of Grand Forks (City) revise its tax increment financing (TI) policy in February 2018, ‘The proposed Block V LLC project was submited by Mr. Mike Kuntz and is proposed as a significant renovation ofthe existing and historic St, John's Block Building and connected) Annex Building that i Tocated at the downtown strategie comer of Demers Avenue and 3" Strect North, ICON Architectural Group is the designer aod foe! plans aod constuction estates we sil wider developuent. The renovation of the six-story St. John's Block Building wil include the following: renovation of the ‘commercial floors on the lower and elevated fist flor levels and the remaining upper four flor levels ‘ill contain 2 mix of studio, one, two, and thre bedroom units. A new elevator is included to address [ADA building challenge, exterior new windows, and posible addition ofan outdoor roo deck patio, Historical features ofthe building will be taken under consideration, ‘The altached three story Annex Building will also Rave a complete renovation to elude the first floor commercial space and the second and third floors residential unit. The anticipated start date of constuction is the winter of 2020 with construction completion inthe spring of 2022 ‘The 2020 assessed value ofthe St. John's Block (2 Nonh 3" Sweet) and Annex (214 Demers Avenue) Buildings are $1,278,300 and $445,000 respectively and the estimated property value upon completion of ‘he proposed renovation project is $7 million plus. Due to the high costs of redeveloping historic buildings ike the St. John’s Block Building, the developer is requesting consideration ofa TIP Bond fora 15 year tenn With City Council concurence, the next step inthe process isto invite the applicant to submit a fll TF application, including $2,500 fee. The TIF request s proposed to exceed five (5) years. The complete application will be provided to Baker Tilly (formerly Springsted) for thi party financial review and analysis. This review will then be presented to the Local Government Advisory Committee (LGAC), ‘hich consists of representatives of the four local taxing entities. City Council President Dana Sande and City Council Vice President Jeannie Moch serve as the City's LGAC representatives. The recommendation ffom LGAC will then be forwarded to City Council for preliminary action at which point a public hearing date (approximately 45 days later) will be set. During that time period, the TIF equest will be heard by the Grand Forks County Commission and Grand Forks School Board, pet North Dakota Century Code requirements.ANALYSIS AND FINDINGS OF FACT: ‘The pre-application ithe fst step to allow further financial review of a TIF request to proced ©The third-party review takes into consideration appropiate industy standards and expected rates of retum, which helps to depoliticze the decision-making process and “right-size” the TIF structures. Baker Tilly peeforms this sevice for other regional communities and has assisted the City in this process. The $2,500 application fe offset the cost ofthe review. ‘+ The timeline of the TIP process is approximately two to three months from beginning to end and includes Cty Counel Pre Application TIF approval; third party financial analysis; LGAC review and recommendation, City Couneil preliminary recommendation and public hearing dat sting, Grand Forks County Commission, Grand Forks Public School Board and City Counel final ations. 1© The Block V LLC is ina Grand Forks Opporuunity Zone as centfied by the State of North Dakota and United States Department of Treasury abd the applicant may also propose to use this Federal tax incentive ona portion of the project a 4 complement to the local tx incentive, ‘© Tho St. John’s Block and Annex Buildings have previously been a pat of 8 Ren ‘thus is ineligible from using tis tate and local tax incentive program. ance Zone Projct SUPPORT MATERIALS: ‘City of Grand Forks TIF Pre-Application from Block V LLC and Ma Mike Kuntz ‘TIF Exemption Projects Overview ‘+ Bail dated October 2, 2020 ftom Deputy City Assessor Tami LazurGRAND City of Grand Forks FORKS = Tax Increment Financing Pre-Application pliant Name: Bove Primary Contact:_MeKunz=!CON ArhtectesGoyp Address 420 Gardn Vi ive Grand Fat, NO e201 Phone rovzresone Fmal_miwsiconwenteete com Lege Entity Typ: uma ust corperton Ce Address of proposed project: Torrmame Proposed projet tmeline/nilestones:_Sttenorion a ensruston ir 2020. Completed sping 2022( cep ling cure) Current taxrollvalue of property: $_81181, 10 Sts00 15620 Estimated value of property upon completion of proposed project: § sao (eure (and) sri (improvements) Attach brief description of proposed project; ncude any renderings or pelimnaty pans that are avaiable [ns 1 TIF Bond 2nd TF Exemption __Stum/aight TE _Undeveloped/Underdeveloped TE Wil requested TIF exceedS years? XL YES _NO * 18 year erm needed ‘The undersigned certifies thot lnformation proved in ths re-open iru ad oret othe eso the undersigne’s Inowledge, and tat the undersgned is duly euthorzed representative of the opplcan. The apolar opreest proce datanal formation as may be requested bythe ity oft he lng of is appleaton. she Karke _ FigsatireofappicatsRepresoiave—SSSCSCSCSCS~S*~S~«GRAND City of Grand Forks FORKS | Tax Increment Financing Pre-Application a eee PROJECT DESCRIPTION: Block V - a redevelopment project includes the rehabilitation of the existing prominent architectural building on the corner of North 3rd Street and Demers ‘Avenue in Downtown Grand Forks, as well as the 3-story annex building connected to the east side. The main building currently stands six stories high. The rehabilitation plan includes renovation of all floors, with the lower level and the elevated main level being designed as commercial use space. The upper four floors in the main building will be residential apartments - designed as studio, 1, 2, and 3 bedroom unit mix. This portion of the project includes a new elevator solution addressing the accessibility challenges which exist in the building. Re-windowing of the deteriorated entire exterior of the facility and an alternate addition of an outdoor r00f deck patio is envisioned. Historical restoration considerations and process will be carefully analyzed. The annex building will also undergo a complete renovation of the existing main floor commercial space as well as the two upper floors into residential units - apartments or condos. Building plans are currently being developed and not available at this pre-application stage, but are being prepared by ICON Architectural Group. Construction budgets are being established as part of this process currently for verification of the project proforma. TIF Bond financing will be sought to offset the high costs of redevelopment involved with these buildings. "We look forward to a collaborative process with the City and agencies involved as we move through this process. Mile Karke — Signore ofappieaw'ahepresenatve te‘TF EXEMPTION PROJECTS ‘FROUECT ER STAREST TRE OF PROVECT SEPTONOETA —] Bas sung w fon boa ensattea, Iara ay THE] sgt has OR a cena TE ea fnrea coun ‘ecortrenaerem 0 br fener amr “ests ae SCARS — FR RSET sug Fr mara ass a RTS — RR RSE OO lr Commo ‘Seounena 2008 [Fame pas a renns —| rons — Rana rar er] OH once tenon vssnrgon ‘opunningshsingbuinee 00 surge FF pecs Bare aT tas aT A TRS fen the eet inant en pce or sume IF ner Tass |S Reh a OSS — STRSTR T f22tWoet Sow “Seommane |aenaihctncanenta Syexe | 2007 [Raa Ea es eanpmx —| Tak —] a oar RS ON TTB ae fs Foun eet eno, 2008 rer srr BaD | Raa aS waa OR TST Sa aT fs. to Sent ‘ronment fk steven orSyob 0 sunt cara FT at SRE SRA OORT RENT SS lune Fo 0s eRe BTC aT Oe Capea a Ta [ss een vw De breve, anon, sso 218 Fr om aaa FT ae ET RST aT ‘om sae un conmercpace ms tort aeene umbie [te art Grogs Sao] 2002 —] Sa spinster | “ON nae ra mene Fs ose TT pc ana SOR TRS VOR TY es ay Avr Frans, vearaateom,oceaon,| 2028 ume loa Fe ra Ba Medias CSRRSSS [0H 9 ROR TE [so cenes monn weasels 2004 leon BauLaur, Tami Friday, October 2, 2020 106 AM Feland, Todd Houde, Paul Stiobr's Block Todd, ‘The value we have forthe St. John’s Building (2 N3" St~ PIN #4, 0001 230.0) for 2020 is $1,278,300 & value forthe annexed building (214 Demers Ave ~ PIN #44.0001.231.00) for 2020 is $445,000, Total 2020 value is $1,723,300 ‘The $1,151,100 & $405,100 you indicated were 2017 values. there is anything more you ned, please let me know. ‘Tami Lazar Deputy City Assessor City of Grand Forks 701-746-2611 (office)