Patrick Springer, Published October 04 2010
Bonds aid Cass County building boomCass County has been experiencing a quiet building boom of 10 projects that are tapping a federal stimulus program to borrow $44.2 million for developments.
The projects – which include two motels, several office buildings, a restaurant and a car wash – represent a total investment of more than $64 million.
Applicants, in documents filed with the county, claim they will create a total of 336 to 341 jobs within three years of completing the projects, not including construction jobs.
But those familiar with local Recovery Zone projects, including County Auditor Mike Montplaisir, said the projects probably would be built without help from the stimulus program, which reduces borrowing costs by providing access to lower interest rates.
Still, the projects will add to the local economy and tax base, he said.
“This is really good news,” Montplaisir said. “We’ve got a lot of projects that are going to be built that will add to the tax base.”
Jim Stewart, a Fargo lawyer who acted as bond counsel for the projects, agreed with Montplaisir that most projects would have been built anyway, given the relative strength of North Dakota’s economy.
“It’s certainly going to make a substantial increase to the tax base,” he said.
It took time for businesses to submit requests for Recovery Zone bond projects, which involved paperwork and getting up to speed on the program’s requirements, Stewart said.
In fact, Cass County commissioners in April approved a request from Ward County to give up
$5 million of its allocation for a development there.
At the time, Cass County had millions of dollars of allocated funds that hadn’t been requested, although the last batch of applications will receive 68 percent of the amounts they requested, unless more funds become available.
Cass commissioners will act on the latest group of Recovery Zone allocation requests involving five projects slated to receive a combined $17.9 million in bonding capacity.
One of those projects is the new location for Don’s Car Washes under construction at the intersection of 25th Street and 52nd Avenue South in Fargo.
The company applied for $3.5 million in Recovery Zone funds and will be allotted $2.36 million unless more funds become available.
Duane Durr, president of Don’s Car Washes, said the slightly reduced borrowing costs will allow the company to pay off its debt more quickly.
“It’s going to make it easier for Don’s Car Washes,” he said.
Terms vary among the projects, but Stewart said the average interest rate is about 4.5 percent.
North Dakota was allocated $135 million for private projects and $90 million for public projects under the federal Recovery Zone bond programs, according to the North Dakota Industrial Commission, which allocates the money within the state.
As of last week, $15.45 million was available for reallocation to private projects in North Dakota.
“There was a fairly large demand in the end,” Stewart said of interest in Cass County for the Recovery Zone incentives. Clay County did not receive an allocation, he said.
Recovery Zone funds must be obligated by the end of the year.
Readers can reach Forum reporter Patrick Springer at (701) 241-5522