Tax Incentives
Tax Increment Financing also known as TIF as governed by the state of ND and local municipalities. Tax increment financing is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects in many countries, including the United States.
Really, there are two categories:
- If there are blighted areas that have to be dealt with that are over and above the normal cost to get a piece of land prepped for development such as infrastructure, environmental, etc.
- If the developer and community want to build public infrastructure or assets for the community.
Sometime this tool is used to be creative with economic development dollars outlined by communities or other jurisdictions. It is an IRS defined method to be creative in using public and private funds.
A PILOT is very similar to a TIF, but has some more latitude of what it can be used for and how it is implemented. Examples are affordable housing and areas where there is not a TIF policy in place.
- The Tracks
- We use the TIF to build community spaces such as the plaza and parking ramp.
- Blu on Broadway
- this is a federal program call the resiliency fund that is used to buy down projects costs and as a result, mandated HUD affordable housing rates are used.
- ‘M’ by EPIC
- Asbestos removal – we used the classic TIF program to make the building environmentally safe.
Zoning
It brings two items to fruition – a five-year property tax abatement and a five-year state income tax waiver.
Renaissance Zones are usually in areas that are blighted and need economic help. If there is no development in these areas, then the tax base will continue to go down.
Opportunity Zone is a complex program that allows people who have capital gains to invest that gain into an Opportunity Zone that allows them to defer taxes for a period of time and any gains during this time are tax free on a federal level. Opportunity Zones are decided by the Governor of each state.
Parking
There are formulas used by consultants and differentials of that formula as a result of mixed-use. It is done in agreement with the municipality.
It varies, but most of the time, it is owned by the building.
It varies, but most of the time, it is by the building.
It is free and open to the public, except the 104 stalls that are private for the Northern Lights tenants.
EPIC pays $150,000 a year to the City of West Fargo, and EagleRidge pays $25,000 a year to the City of West Fargo and the City of West Fargo maintains the ramp while West Fargo Events manages it.
You need the proper mix of parking for residential and commercial tenants to be successful.
Investing
EPIC raises capital to construct buildings. This capital comes from EPIC and investors that are looking for a normal return and to make a difference in nearby communities.
Investors have say in the ongoing management of projects if they are equity investors. Investors can also be subdebt investors which is usually a fixed rate return on a project.
Any accredited investor as defined by the IRS.
Lots of reasons:
- Helping local development
- Depreciation
- Balance of portfolio
- Real Estate is long-term, and steady.
- Fixed assets that someone could drive by or see in person.
No.
EPIC Events
An EPIC entity that books, promotes, and manages events.
It is how we bring at risk events to plazas that we develop with communities.
The community and surrounding tenants.
To help ensure good sponsorship value for the public plaza and to be a piece of the programming for quality of life.
They are nationally recognized and a very safe medium to use.
The Lights, ND State Fairgrounds, soon The Beacon in Grand Forks, EOLA in Fargo and Tracks in Minot
It rents the facility the West Fargo Events manages. They work together on marketing and promotions.