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Published July 09 2013

Forum editorial: The ‘zone’ incentives work well

When the North Dakota Legislature considered a city renaissance zone development incentive, a few legislators balked. Mostly from rural or small-town districts, they objected because they believed the tax break would benefit the state’s bigger cities, and be of no significant value to small towns.

They were right and they were wrong. They were right in that the wildly successful renaissance zone program has primarily benefited the big cities. They were wrong in their parochial view that smaller towns would not benefit at all.

Indeed, had the opponents of the 1999 legislation been able to see beyond their backyards, they would have understood the obvious: Cities with big tax bases, big downtowns and a stock of neglected downtown buildings of course would benefit far more than small towns where those features were smaller. Not rocket science.

Fortunately, a bipartisan majority of lawmakers led by Rep. John Dorso, R-Fargo, saw the long-term wisdom of using the tax code to partner with private investors and cities in order to rejuvenate dying downtowns, no matter the size of the city. It has worked so well in cities and small towns (54 of them) that even shortsighted opponents have come around. They realize (how could they miss it?) that the initiative has been one of the best development stimuli ever approved by the Legislature.

The evidence of the program’s success is everywhere, from Fargo to Crosby, from Devils Lake to Hankinson. Of course, some zones have fared better than others. Some places have had more success than others in attracting private investments in renaissance zones. Each effort should be judged within the context of unique factors affecting a specific place.

Overall, however, the renaissance zone option has been an effective development strategy for the cities that embraced the concept. For example, the appraised valuation of Fargo’s renaissance zone properties has gone from about $200 million in 2001 (when the first project was completed) to just short of

$555 million in 2013. The return to taxpayers is equally impressive, with rejuvenated properties generating far more property taxes than they did before the zone was established.

The program’s 15-year authorization is up next year. Fargo has applied to the Department of Commerce for a five-year extension. It likely will be approved. It should be. The program is a proven success. When used judiciously but generously, it does precisely what the legislation intended.


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Forum editorials represent the opinion of Forum management and the newspaper’s Editorial Board.