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$1.1 million tax break OK’d for downtown Moorhead building projects

An eastward view of Center Avenue shows the old Moorhead armory, left, and the Simon Warehouse. MBA Investments plans to make the armory into an event center and the warehouse into a residential complex. Construction is expected to begin in March. Kim Hyatt / The Forum

MOORHEAD – The City Council here has approved a tax break for two projects along Center Avenue in downtown that’s significantly more than initial estimates.  

Council members considered tax exemptions for developer and architect Kevin Bartram, of MBA Investments, at a meeting this week. Bartram intends to turn the old Moorhead armory, 904 Center Ave., into an event center and the neighboring Simon Warehouse to the east, 8 10th St. N., will be made into a 60- to 65-unit apartment complex.

Tax breaks for both projects originally totaled $419,500 over the course of four years, with $94,500 going toward the armory and $325,000 for the warehouse.

However, Bartram requested the two project exemptions be considered one mixed-use project and applied for one exemption. The change more than doubled the tax break value, bringing it to $1.152 million over the course of 10 years.

To do so was a “deviation from the policy,” said City Manager Chris Volkers. She said at the Monday, Jan. 22, meeting it “behooves the council to be flexible” and make the exception. Council members unanimously approved the tax break.

We wanted to make sure that area grew and prospered,” Mayor Del Rae Williams said.

Both buildings are in what’s called an Urban Progress Zone, which targets development of commercial and residential properties for reinvestment by offering property tax exemptions to developers meeting certain criteria.

Tax breaks related to the progress zone are based on a combination of job creation and project value. Cindy Graffeo, executive director of the city’s economic development authority, said while the Simon Warehouse project created substantial value – about $5 million of new taxable building value – the exemption was limited due to the lack of jobs created.

The apartment complex in the Simon Warehouse building is expected to employ just one full-time worker. The event center in the old armory is anticipated to employ 10 full-time workers.

By combining the two projects into one, the number of jobs created at the event center will count toward the apartment complex, increasing the value of the tax exemption, Graffeo said.

It was noted in city documents that the buildings can be considered one project because they will be on a contiguous site once a section of 10th Street North dividing the buildings is officially closed. Once that happens, the buildings will share a joint parking lot.

Both properties will be redeveloped starting in March, with work estimated to be completed by June 2019, city documents said.