Jamestown City Council to consider tax exemption for Cavendish Farms

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6 days ago

Jul. 25—JAMESTOWN — The Jamestown City Council will consider a request from Cavendish Farms for a 15-year payment in lieu of taxes at its regular meeting on Monday, Aug. 4.
The City Council unanimously approved on Thursday, July 24, at its special meeting without recommendation sending the request to the Aug. 4 meeting.
"There's a lot of people that need to gather a little more information," Mayor Dwaine Heinrich said, referring to Cavendish's request. "Hopefully there will be sufficient time. If not, we can always schedule another special City Council meeting or something else to do what we need to do."
At the Jamestown Finance and Legal Committee meeting on June 26, Cavendish Farms was seeking a tax exemption for its expansion and improvements with an estimated cost of about $200 million. Cavendish was also looking for a tax exemption on constructing a wastewater treatment facility with an estimated cost of about $25 million to $35 million.
Cavendish Farms is planning an expansion that will replace the fryer, expand the building by 55 feet and provide a better working environment and storage at the facility, Agweek reported in November.
The expansion would modernize the existing facility and add 80 million pounds of production capacity, The Jamestown Sun reported in June.
The request at the June 26 Finance and Legal Committee meeting was for a payment in lieu of taxes for about $2 million annually or $30 million over 15 years for the projects.
"It'll actually be quite a bit lower than that number," said Josh Teigen, principal of Harvest Group which represents Cavendish. "The overall project will still be about the same size but just reallocation between real property and machinery and equipment."
He said the request for the payment in lieu of taxes could be less than $1 million annually for up to 15 years.
Teigen said the building expansion will be around $21 million for just the materials and labor. He said the architectural and engineering work would be another few million dollars on top of the $21 million. He said the wastewater treatment facility still has an estimated cost of about $25 million to $35 million.
"So collectively, roughly $50 million," Teigen said. "It would be the due number for just the real property side of things. So previously, that was about $115 (million) so project size is still about the same, just a reallocation between real property and machinery and equipment."
The expansion and wastewater treatment facility could create around 24 jobs, Teigen said.
The Jamestown Finance and Legal Committee unanimously recommended approval to change the city of Jamestown's special assessment policy.
If approved by the City Council, the share of special assessments for water and sewer districts will be 70% by the city and 30% for property owners.
The current policy on the share of special assessments for water and sewer districts is 80% for property owners and 20% for the city.
City Administrator Sarah Hellekson said the special assessment policy was 70% by the city and 30% for property owners for some water and sewer districts in 2022.
"There was no mention of future water or sewer main projects," said Dorene Stroh, city assessor. "It was only referencing those specific projects. So that's why it's being brought back up to you now."
In other business, the Finance and Legal Committee unanimously recommended approval of a request from the Jamestown/Stutsman Development Corp. to terminate its portion of the lease with the Jamestown Regional Airport Authority for a 5-acre area in the JMS Aviation Park for an implement dealership.
The JSDC would recoup 70 cents per square foot for the infrastructure development, which comes to a total of more than $152,000, over a three-year period at about $50,800 annually from CLAAS. No interest will accrue over that three-year period.
The JMS Aviation Park is an industrial and business park built by the JSDC. It is adjacent to Jamestown Regional Airport. JMS is the abbreviation and Federal Aviation Administration code for the Jamestown Regional Airport.
CLAAS is planning to lease land in the JMS Aviation Park to construct two buildings for an implement dealership.
The annual cost to CLAAS for the 5-acre land lease with the Jamestown Airport Authority is over $3,260 per year, The Jamestown Sun reported on July 15. The lease would be over 25 years.
CLAAS is an implement dealership that sells tractors, combines, forage harvesters and other farming equipment.
CLAAS is planning on building an 11,000-square-foot shop with four bays that will mostly be used for a parts warehouse. CLAAS will look to add another 60-by-70-foot warehouse for cold storage after the first year.
The Jamestown Building, Planning and Zoning Committee unanimously recommended approval of a major subdivision and final plat of the Beyond Shelter First Addition.
The property is located near 11th Avenue and 25th Street Southwest just west of Walmart.
A planned senior housing apartment building will be constructed on the land west of Walmart. The apartment building will have 33 one-bedroom units and six two-bedroom units.
The estimated cost is more than $15.4 million for the first phase of the project, which is the construction of the 39-unit senior housing apartment building.
The project could have two more phases that would bring the full buildout of the senior housing project to 117 units.
A public hearing and second reading of an ordinance will be held at the Aug. 4 City Council meeting to amend the district map to change the zoning of the Beyond Shelter First Addition from an agricultural district to a general multiple dwelling district.
The property is located near 1104 25th St. SW.
In related business, the City Council will consider a request for a 17-year payment in lieu of taxes for the construction of the 39-unit senior housing apartment building.
Buffalo Manor Apartments LLLP, an affordable senior housing company, applied to the city of Jamestown for property tax incentives for new or expanding businesses under North Dakota Century Code 40-57.1 for payment in lieu of taxes. Under the payment in lieu of taxes, there would be zero payments over 17 years on the senior housing apartment building with Jamestown City Council approval. The terms of the tax incentive would begin in 2028 and end in 2044.
Dan Madler, CEO of Beyond Shelter Inc., said the tax value on the 7.7 acres of land is projected to start at about $8,500 in 2028 and will increase 2% each year for a total collection of tax income of about $171,000 over the 17-year period.
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