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Clarifying JDA’s involvement in proposed tax incentive

August 21, 2009
Brenda Foster

I would like to take the opportunity to correct a few of the misconceptions surrounding the involvement of the Rugby Job Development Authority (JDA) concerning the proposed property tax incentive application for the new senior-friendly 14-unit housing complex that is in the development stage in our community.

First and foremost, the reason the JDA is involved in this project is because the community of Rugby spent time and resources a number of years ago with the assistance of the residents of Rugby, and it was clear then and even clearer now that we need to have additional housing in our community if we want to continue to maintain and maybe even grow our population in Rugby.

Secondly, in the last ten years the city has approved 10 property tax incentive applications for various businesses and ahousing development on the north end of town. However, it was decided years ago by the city council that the JDA should review and make the recommendations to the city concerning property tax incentives for new or expanding businesses.

Third, this is a property tax incentive application for a business, not for residential development.

There are two kinds of property tax incentives available to communities throughout the state, and eachcommunity has the option to offer those exemptions to businesses or individuals that are rehabilitating or building a new structure. The property tax incentive for new or expanding businesses was first enacted in 1969 by the state of North Dakota for new and existing buildings, structures and improvements owned or leased by a qualifying project may receive property tax incentives. The proposed property tax exemption application before the city council is for a business, not a residential development. The proposed housing unit is considered a business because the developer is renting out the space to individuals. If he were developing the unit to sell he would not qualify for an exemption because he would not own the property. To date, the city of Rugby has not offered to its residents a residential tax exemption but is in the process of discussing the option to offer such an incentive in the future.

I was asked to survey what other communities around the state the size of Rugby are doing concerning business and residential tax incentives and found that a majority of the nine communities surveyed provided the business and residential tax incentives because it was one of very few incentives they could utilize to retain businesses in their community; that will in turn provide jobs to people in the community who also rent or own a house and may have children who go to school; who need food, clothing and many other things our community can provide, such as a clinic, dentist, eye doctor and medical services. The same goes for the people who want to rent one of the 14 proposed units. These units have over 1,100 square feet, all one level, with an attached garage, two bedrooms, room for a washer and dryer, and someone will be hired to do the lawn care and snow removal. These are not low income apartments, and the funds to build and rent these apartments will stay right here in Rugby.

Most communities like Rugby are losing population, and there is not a community out there that can afford to do the same thing they did 50, 30, 20 or even 10 years ago. If you have any questions, concerns or constructive thoughts I encourage you to contact the Rugby JDA office and discuss them with us.

Foster is executive director of the Rugby Job Development Authority.

 
 

 

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