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Wendy Reuer, Published May 13 2013

Moorhead approves tax exemption for new hotel

MOORHEAD – In order to persuade developers to build a new hotel here rather than West Fargo, the Moorhead City Council approved an eight-year property tax exemption for the project Monday night.

The City Council unanimously approved giving a roughly $736,000 ($92,000 per year) property tax exemption for a $4 million Microtel Inn & Suites by Wyndham to be located on the 2900 block of 11th Street South.

City Manager Michael Redlinger said the developers are still deciding if they will build in Moorhead or West Fargo but approving the property tax exemption will be an incentive for the developers to choose Moorhead.

“We don’t know a lot about the West Fargo site,” Community Development Manager Peter Doll said. “Our land is more affordable. Passing this exemption allows the city to put their best foot forward, economically.”

West Fargo Mayor Rich Mattern said that unlike incentives the city has available to attract manufacturing businesses, West Fargo does not have any economic incentives for the hospitality industry. The city would like to see more hotels in the area, he said.

“But we will try to work (with developers); if we can find something, we will,” Mattern said.

However, Mattern said that the new $360 million Sanford Health Campus opening in 2016 on the far west side of Fargo makes available West Fargo land near there prime real estate for hotels and restaurants to move in.

“I think that is going to be a big draw for the hotel industry,” Mattern said.

Doll said the 71-room, 13-suite hotel would be next to Interstate 94 and would face the intestate, with most parking on the south side. The hotel would create eight full-time new jobs in the city.

“This is a great location,” Councilman Mark Hintermeyer said. “I hope we are in the running and (developers) fully understand that.”

If developers move forward with building the hotel in Moorhead, construction would start in July and potentially finish by next spring or summer 2014, Redlinger said.

The council unanimously voted to approve the tax exemption by resolution. Councilman Steve Gehrtz, owner of Gehrtz Construction in Fargo, did not vote on the resolution due to a potential conflict of interest, he said.

Project operators Brent Strand and Ray Kvalvog did not attend Monday’s public hearing on the tax exemption and could not be reached for comment as of press time.

The council also approved a four-year, $78,200 tax exemption for a 6,500- to 7,500-square-foot office building at 1605 30th Ave. S. Most of the $850,000 new building will be leased to professional services. About 10 new jobs will be created.

The building will be exempt from paying about $19,500 per year in property taxes.

The estimated amount of property taxes eligible for exemption and number of exempt years is based on the cost of construction, according to the city’s Economic Development Authority program.

Readers can reach Forum reporter Wendy Reuer at (701) 241-5530