MINOT — EPIC Companies testified at both the Minot City Council and Ward County Commission meetings Monday and Tuesday, asking both the city and county, along with the school and park districts, to approve Tax Increment Financing (TIF) for its renovation of the Midwest Federal building (also known as the Big M building) downtown Minot.
It was built in 1962, occupied in 1963, and used mostly for offices, according to Brian Billingsley, Community Development Director.
EPIC bought the building in December, which has not been used for 20 years, according to Billingsley.
According to Todd Berning, a COO of EPIC Companies, the proposal would include parking, utilities, an exercise room, and storage in the basement. Floors 1-2 would be for commercial use, with floors 3-6 holding 2 bedroom apartments, and 7-8 holding 2 bedroom condominium units.
“We’d have 8 condos on the top two floors, and 31 apartments on floors 3-6. We’d also have underground parking,” said Berning.
Berning also said that the cost for the project, due to inflation, is coming close to $14.7 million, which he said would be paid upfront completely by EPIC.
“Over the next 18 months, we’ll renovate it, get it reevaluated as we go,” Berning explained. “Then it will go onto the tax roll. We’ll be paying the minimum.”
The city manager, Harold Stewart, described this specific TIF to the county commissioners, “A lot of people misinterpret TIF as being a tax abatement. In some cases it can potentially be, but that’s not what’s being structured here. There’s a couple different ways you can do TIF. One is it could be a rebate back to the developers themselves. So rather than pay the tax upfront, or they would pay it and it would be distributed back to them, but that’s not the model we’re using here.”
Stewart continued, “EPIC will pay taxes of the full value of their property after they put the investment and done the development. What TIF allows to happen, is for the city to hold all the tax revenue off of this. In this case the city will be holding the risk of issuing bonds in the name of the city for this 2.7 million that they’re asking for, and then we would use 90% of the tax revenues to pay the principled interest on those bonds. The other 10% that is captured gets distributed to the tax entities as it would normally do. That 10% would more than double the current taxes being paid on that property.”
The bond is projected to be paid off in 20 years, though, according to Stewart, if taxes come in higher, it could be earlier than that. When it is paid off, EPIC would pay taxes in full.
Berning told the commissioners what they are asking them for, “Our process is to hopefully get an OK from county commission, hopefully get an OK from the school district, and then we’d go back to the city and hopefully get the final OK from them.”
At the city council meeting, EPIC Companies simply gave an informational presentation. At the county commission meeting, it was looking for a motion to approve participation with the city for TIF.
The county tabled the approval to the next meeting, with only Commissioner John Pietsch voting no, which he said was because he did not want the word “approval” to be in the motion to table.
Alderman Paul Pitner shared his thoughts on the project, “From a return-on-investment standpoint, I think it’s a good idea.”
Commissioner Howard Anderson gave his perspective, “We’re kind of betting on the future, with a building right now that probably doesn’t have a future.”
More information on the project and TIF can be found here.