Grand Forks Economy

[Und Princess]

1 minute ago, nodak651 said:

Anyone know what "Forks Freightliner" is?  Looks like a farly large building.  https://experience.arcgis.com/experience/83f7c1d340f843809bbff15fc6d722f3#data_s=id%3AdataSource_5-17af413d6ea-layer-4%3A318

All I know is that it's by McDonald's. I don't know what Forks Freightliner sells. 

[nodak651]

3 minutes ago, The Sicatoka said:

Likely a Freightliner trucks dealership. 

Great!  Looks like you're prob correct based on the size of the parking spaces.

[Cratter]

1 hour ago, nodak651 said:

That just isn't correct.  I think a lot of people are confused about this.  Someone correct me if I'm wrong here.

When a company invests in vacant land, the property value and tax assessment typically increase. To encourage investment, companies may receive a tax incentive, exempting them from paying a percentage of the increased tax assessment. However, they must still pay the pre-development tax rate. The city does not provide cash payments to the developer, and the tax revenue from the developed property does not decrease. 

Yes. They aren't just giving out cash.

This is a normal deal done thousands of times all over the country.

People love to pretend to be outraged over nothing.

[Cratter]

1 hour ago, nodak651 said:

Anyone know what "Forks Freightliner" is?  Looks like a farly large building.  https://experience.arcgis.com/experience/83f7c1d340f843809bbff15fc6d722f3#data_s=id%3AdataSource_5-17af413d6ea-layer-4%3A318

Parts & Repair shop. Doubt they'll add dealership.

But maybe.

[Blackheart]

2 hours ago, nodak651 said:

That just isn't correct.  I think a lot of people are confused about this.  Someone correct me if I'm wrong here.

When a company invests in vacant land, the property value and tax assessment typically increase. To encourage investment, companies may receive a tax incentive, exempting them from paying a percentage of the increased tax assessment. However, they must still pay the pre-development tax rate. The city does not provide cash payments to the developer, and the tax revenue from the developed property does not decrease. 

I stand corrected; they are not just handing over briefcases filled with $100 bills...at least I hope they're not.

[FSSD]

4 hours ago, Cratter said:

Yes. They aren't just giving out cash.

This is a normal deal done thousands of times all over the country.

People love to pretend to be outraged over nothing.

Is this a TIF deal? or some other type of incentive program?

[Cratter]

44 minutes ago, FSSD said:

Is this a TIF deal? or some other type of incentive program?

I don't believe its TIF.

Just the normal, "if you spend and risk millions building this massive structure in our city, creating jobs, increasing available housing....we'll give you a break on your property tax bill."

Its the same program cities use all over the country, including West Fargo, that advertise it on their website screaming "Come develop here!"

[Blackheart]

43 minutes ago, Cratter said:

I don't believe its TIF.

Just the normal, "if you spend and risk millions building this massive structure in our city, creating jobs, increasing available housing....we'll give you a break on your property tax bill."

Its the same program cities use all over the country, including West Fargo, that advertise it on their website screaming "Come develop here!"

I'm curious as to how quickly they will fill these upscale apartments.

[Cratter]

1 hour ago, Blackheart said:

I'm curious as to how quickly they will fill these upscale apartments.

If history tells us anything, probably pretty fast.

Northridge has decades of knowledge in Grand Forks housing market.

Its a pretty simple formula: build apartments. See how quickly it fills up based on rates, amenities.

Ok its 80% full. Build a new one or two.

Grand Forks is lucky to have them.

 

[Cratter]

12 hours ago, The Sicatoka said:

Can someone put a dollar-number to these "luxury" units? I want to hear what that threshold is. 

"Branding theater"

"Wholesale prices"

[ChadR]

Funny that Cowger is so against these. He owns/manages a bunch of apartments in GF.

[Cratter]

8 minutes ago, ChadR said:

Funny that Cowger is so against these. He owns/manages a bunch of apartments in GF.

Yeah also color me shocked a golf simulator owner is against a year round "Top Golf style."

Which nearly every Grand Forks resident would love to have.

[Bison Dan]

8 hours ago, Cratter said:

If history tells us anything, probably pretty fast.

Northridge has decades of knowledge in Grand Forks housing market.

Its a pretty simple formula: build apartments. See how quickly it fills up based on rates, amenities.

Ok its 80% full. Build a new one or two.

Grand Forks is lucky to have them.

 

The question is would they build without the Pilot program?  They claimed there is only a 2% vacancy rate in the city, so if true they wouldn't need Pilot.  

[Cratter]

51 minutes ago, Bison Dan said:

The question is would they build without the Pilot program?  They claimed there is only a 2% vacancy rate in the city, so if true they wouldn't need Pilot.  

Indeed, its a poker game.

Your city could have a unemployment rate of 10%, doesnt mean a new factory will build in your city without tax incentives.

These programs across the country in similar sized towns get approved about 70 to 90% of the time. 

If your city only has one, two, three (We all just lost Epic) major developers building in your city, are you going to take a risk losing them? When the nearby town will gladly approve that major project that will take the bulk of their capital, planning, and time for the next three to five years?

[jdub27]

10 hours ago, Cratter said:

Ok its 80% full. Build a new one or two.

Any developer who sees 80% occupancy and thinks one or two more need buildings need to be built is going to go broke real fast.

[The Sicatoka]

The "time to build" vacancy number in Fargo is 90%. 

[Blackheart]

3 hours ago, Bison Dan said:

The question is would they build without the Pilot program?  They claimed there is only a 2% vacancy rate in the city, so if true they wouldn't need Pilot.  

That vacancy rate is from the developer's own findings based on under a thousand units.  The actual rate is believed to be closer to 5%.

[Bison Dan]

38 minutes ago, Blackheart said:

That vacancy rate is from the developer's own findings based on under a thousand units.  The actual rate is believed to be closer to 5%.

I agree, even at 5% do you really need the Pilot program.  If it doesn't cash flow without the tax incentive's then you're in trouble.  I think the bankers too are complicit in telling their customers to ask for tax breaks even if they don't need them.

[Cratter]

3 hours ago, jdub27 said:

Any developer who sees 80% occupancy and thinks one or two more need buildings need to be built is going to go broke real fast.

Lol..ok here a more expanded answer...in this scenario its a new building, its 80% full after only being open x amount of time.....which gives them an "estimated capacity fill rate"...they dont start planning the next one at 100% full. And in this virtual scenario, at 80% gives them enough green light data...

Of course a lot of factors into "fill rate."  And "80%" in a vacuum means squat.

"We kept prices high earlier because we figured we could always lower them later to fill it."

[jdub27]

20 minutes ago, Cratter said:

Lol..ok here a more expanded answer...in this scenario its a new building, its 80% full after only being open x amount of time.....which gives them an "estimated capacity fill rate"...they dont start planning the next one at 100% full. And in this virtual scenario, at 80% gives them enough green light data...

Of course a lot of factors into "fill rate."  And "80%" in a vacuum means squat.

"We kept prices high earlier because we figured we could always lower them later to fill it."

If the building isn't significantly leased up prior to opening and then at above a break-even rate (which is almost always quite a bit higher than 80%) the first few months its open, they are in a lot of trouble.

If you're discounting leases early in the process, also a huge red flag. Existing tenants aren't a big fan of seeing that...
Not saying they don't offer some early-lease up specials (first and last month free, etc.) but what you're describing isn't how the process works at all.

 

[Cratter]

I love this thread. 

Hop in the "way back machine"

To see:

"Grand Forks very slow growth.....we dont need to build so many new apartments."

*digs deep*

"Holy crap. Grand Forks has a very low vacancy rate and apartments growth hasnt been keeping up with demand; we need to built a lot more!"

[Cratter]

22 minutes ago, jdub27 said:

If the building isn't significantly leased up prior to opening and then at above a break-even rate (which is almost always quite a bit higher than 80%) the first few months its open, they are in a lot of trouble.

If you're discounting leases early in the process, also a huge red flag. Existing tenants aren't a big fan of seeing that...
Not saying they don't offer some early-lease up specials (first and last month free, etc.) but what you're describing isn't how the process works at all.

 

Ok good to know. We can use this data to answer Blackhearts question then,....the original point:

it'll likely be 90% to 100% full before it opens or right afterwards.

[Blackheart]

14 hours ago, Cratter said:

Yeah also color me shocked a golf simulator owner is against a year round "Top Golf style."

Which nearly every Grand Forks resident would love to have.

Catch me up on this one...the guy that runs the golf simulator wasn't thrilled that the city was offering tax breaks to his potential competition?

[jdub27]

30 minutes ago, Blackheart said:

Catch me up on this one...the guy that runs the golf simulator wasn't thrilled that the city was offering tax breaks to his potential competition?

If you consider a golf simulator put in as an amenity in an apartment building, yes.

[Cratter]

2 hours ago, Blackheart said:

Catch me up on this one...the guy that runs the golf simulator wasn't thrilled that the city was offering tax breaks to his potential competition?

The poker table buy in is $10 million minimum. 

The more you invest the bigger discount/perks you get. 

This guy gets comped a soda:

 

 

This guy gets comped a penthouse suite: