2016 Plan Update

GRAND FORKS

RENAISSANCE ZONE PLAN

2016 PLAN UPDATE

2011: PLAN UPDATE 2009: ADDITION OF BLOCK 23A 2001: CREATION OF ZONE

Planning & Community Development Department City of Grand Forks, North Dakota

2016 UPDATE GRAND FORKS RENAISSANCE ZONE PLAN

Contents

Introduction ...... 4 Description ...... 6 Ren Zone Map: 2016 ...... 8 Natural Features and Historic Assets ...... 9 Vision, Goals & Objectives ...... 16 Zone-wide Selection Criteria ...... 17 Heart of the Downtown District ...... 18 University Avenue District ...... 19 Central Park District ...... 20 South Forks District...... 21 Incentives ...... 23 Management ...... 26 Renaissance Fund Organization ...... 29

Appendixes Block Inventory……………………………………………………………...….. A Completed Ren Zone Projects To-Date………………………..…….……… B Historic Property List………………………..….……………………………… C Primary Residency Certificate………………….……..……………………… D State Program Information…………….……..………………….……..……. E Letters of Support.……..……………………………………...……..………… F

2016 UPDATE GRAND FORKS RENAISSANCE ZONE PLAN

Introduction

The Renaissance Zone Program was created by the fifty-sixth North Dakota State Legislative Assembly to spur redevelopment and investment within defined areas of North Dakota cities. The Grand Forks Renaissance Zone, or “Ren Zone,” was established in 2001 in the City’s downtown.

As in many U.S. cities, development on the outskirts of town in the 1960s and 1970s heralded an exodus of downtown business. In Grand Forks, this “downtown crisis” generated various responses, including razing buildings to construct parking facilities and creation of the City Center Mall, which closed off and roofed over a downtown street. Subsequent decades brought succeeding downtown planning efforts: the Original Marketplace Plan for the Future in 1982, the River Forks Plan in 1994. These plans brought incremental improvements but no significant financial resources, and downtown Grand Forks continued to struggle. Then the Flood of 1997 came and everything changed.

It devastated the entire community, but downtown was hit especially hard, losing 11 buildings to fire at the height of the flood. Substantial disaster recovery resources were directed downtown and spurred widespread redevelopment in the “heart of the city.” A variety of funds provided capital for infrastructure improvements, construction of new public and private buildings, restoration of existing buildings, and development of a permanent flood protection system.

It was during this post-flood reconstruction period that Grand Forks’ Ren Zone was first established. Despite the downtown re-investment that was taking place, the need for additional private capital was recognized. The Renaissance Zone provided another means to attract it.

Evolution of the Ren Zone

Downtown Grand Forks has changed significantly in the years since the Renaissance Zone was established, and the Zone has changed with it. The 2001 Zone consisted of 22 contiguous blocks, located primarily in the downtown core. A block was added in 2009, but otherwise it remained unchanged until 2011. In that year, a comprehensive update included the removal 5 of blocks from the original core, designation of a three-block non-contiguous island, and the addition of 11 blocks to the downtown periphery. The 2011 update also designated four distinct but interrelated “districts” within the Ren 4

2016 UPDATE GRAND FORKS RENAISSANCE ZONE PLAN

Zone: the Heart of Downtown; the University Avenue corridor; the Central Park Neighborhood transition area; and the South Forks district.

Summary and Purpose of 2016 Plan Update

This document is meant to update and build on the Renaissance Zone Development Plan adopted by the City of Grand Forks on May 16, 2011, and approved by the North Dakota Division of Community Services on October 5, 2011. Per State Ren Zone guidelines, the initial 15-year eligibility of the original 22 blocks will expire if an extension is not granted. A five-year extension to the original blocks (with the exception of Blocks 2, 5, & 18) is being requested to continue to build on momentum in downtown revitalization and overall community vibrancy. This is being done concurrently and in conjunction with the Mayor’s Vibrancy Initiative.

As well as seeking a five-year extension for some blocks, this Update also expands the local benefits available to approved projects and incorporates ongoing community efforts to create a more vibrant downtown. The following have been updated or established through this update process:

 Renewal and Extension of original Renaissance Zone Blocks  Ren Zone Boundary/Expansion  Local Ren Zone Incentives  Vision, Goals and Objectives, Selection Criteria by District

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Description

The evolution of Grand Forks’ Ren Zone is depicted graphically on the following maps.

Original Ren Zone Map: 2001-2010 The original blocks displayed on the map above, with the exception of block 23A which was added in 2009, have completed their original 15-year eligibility term for Renaissance Zone benefits.

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Ren Zone Map: 2011-2015 The plan update of 2011 and new legislation at that time allowed Grand Forks’ Ren Zone to expand to 32 blocks, including a 3-block non-contiguous “island.”

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Ren Zone Map: 2016

State legislation again allowed Grand Forks to expand its Zone to a maximum of 43 blocks. The 2016 update adds 5 blocks, shown above outlined in red, for a total of 35.5 blocks, leaving 7.5 blocks available to be added to the Zone through future plan updates. ( indicates a half block due to government buildings).

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Zone Selection Process

The Downtown Development Commission (DDC), which was established to direct post-flood disaster recovery in downtown Grand Forks, took the lead in advocating for the original downtown Renaissance Zone. At the direction of City Council, ten potential Zone locations throughout the community were studied. Selection criteria used to evaluate the ten options included availability of commercial space, current land use, and overall development potential. After reviewing the study, City Council concurred with the DDC’s recommendation and a downtown Ren Zone was created.

For the 2011 plan update and Zone expansion, Planning and Community Development staff, using the above selection criteria, developed a variety of options for expanded zone boundaries and a non-contiguous island, as well as recommendations for deeming blocks “completed.”

The current plan update followed the selection process established previously, with a focus on the Heart of Downtown core area and expanding the possibilities for the University Avenue corridor to help connect the University of North Dakota to downtown Grand Forks. The update process and initial recommendations were presented to the Finance and Development Committee on December 14, 2015; based on their feedback, the final update document was drafted and presented to City Council on February 1, 2016. City Council held a public hearing on the final update and recommended its approval on March 7, 2016. Meeting minutes and public comments are included as Appendix ___.

Natural Features and Historic Assets

The key natural feature associated with the Ren Zone is the Red River of the North and the subsequent Greenway. Created in conjunction with the permanent flood protection project, the Greenway runs along both sides of the Red River and through the heart of downtown Grand Forks/East Grand Forks. It contains 17+ miles of pedestrian trails overall, and amenities such as overlooks, benches and kiosks are located in the downtown segment. In addition, there are several “pocket parks” in downtown Grand Forks, including three located within Block 7. Town Square occupies a large portion of the former Block 2 (now completed), a Flood Memorial is in the former Block 5 (completed), and Centennial Park is located in Block 10 (completed). 9

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Two National Register Historic Districts fall within the Ren Zone: the Downtown Historic District and the Near Southside Historic District. All historic properties located within the Ren Zone are listed by District as Appendix C.

The natural and historic assets within the Ren Zone contribute a great deal to the ambiance and attractiveness of downtown Grand Forks. The Ren Zone is seen as a catalyst for historic preservation and adaptive reuse, and applications for projects that have the potential to negatively impact either the historic nature of downtown Grand Forks or the natural amenities in place will be carefully scrutinized.

Property Inventory

A block-by-block inventory of all properties within the Ren Zone is shown in Appendix A. The following subsections address the blocks that were removed and added by the expansion process.

Completed Blocks

When the Renaissance Zone Act was initially adopted by the State legislature, it did not provide for changes to the boundaries of a Ren Zone. Subsequently, it was recognized that administering a 15-year Ren Zone may require more flexibility, and legislation was enacted to provide a city with the ability to request certain changes to their zone as needed. Cities are now able to request deletion of “non-progressing” or completed blocks and substitute an equal number of other contiguous blocks. To so designate a block, the city must explain why it believes that no Zone projects will occur in that block during the remaining life of the Zone. Following is information on the five original Ren Zone blocks that were designated as completed as part of the 2011 update.

Block 2:

215 DeMers Avenue Town Square Town Square 33 S. 3rd Street Office/Retail & 3rd Street Market Apartments

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This block abuts the dike/flood wall. It contains Town Square, which is a popular City-owned public space with virtually no potential for private redevelopment, and The 3rd Street Market. The 3rd Street Market is a block of mixed-use buildings that were fully redeveloped after the 1997 flood; they are in good condition with no vacancies.

Town Square Photo provided by Downtown Development Association, downtowngrandforks.org, 2014.

Block 5:

111 N. 3rd Street Residential Condos Elite Brownstones 102 N. 4th Street Federal Building Davies Courthouse 375 2nd Avenue N. Offices Grand Forks Herald

Half of this block contains a completed Ren Zone project(s), the Elite Brownstones. When the Ren Zone was established, this half-block was vacant – the 1997 fire destroyed the original buildings. The other half contains the Davies Federal Courthouse, which is ineligible, and the Grand Forks Herald. The Herald’s building was reconstructed after the flood, and it is unlikely the Herald will either move from this site or undertake significant improvements. 11

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Elite Brownstones Photo provided by Grand Forks Herald, grandforksherald.com, Photographer Kile Brewer

Block 10:

124 S. 4th Street County Buildings Grand Forks County Courthouse 115 S. 5th Street Offices Thelen Law Firm 425 Kittson Avenue Vacant Lot Beloff Enterprises (Owners)

Approximately 80% of this block is publicly owned and ineligible.

Block 15:

501 1st Avenue N. Parking Lot Grand Forks Public School Dist. 516 DeMers Avenue Bank Alerus Express Bank

The entire block was previously owned by Alerus Financial, who maintains a primarily drive-thru’ facility on a portion of the block. The balance was purchased by the School District for parking, making future redevelopment unlikely.

Block 18:

615 1st Avenue N. Mixed use Northern Heights 600 DeMers Avenue Office Building w/ parking US Bank and other offices

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Northern Heights, a mixed-use 53-unit residential rental/commercial redevelopment, was formerly the Grand Forks Civic Auditorium. Northern Heights developers elected to pursue a TIF exemption instead of seeking Ren Zone incentives. The US Bank building is not expected to undergo significant redevelopment in the near future.

Northern Heights Photo provided by Grand Forks Herald, grandforksherald.com, Photographer Kile Brewer

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Added Blocks

As part of the 2016 Plan Update, 3 blocks were added in the Heart of Downtown district and 2 in the University Avenue district, for a total of 35.5 blocks. Based on population and legislative changes, Grand Forks’ Ren Zone can contain up to 43 blocks, so 7.5 blocks are reserved/available for future expansion. Another Plan update is anticipated in a few years in conjunction with redevelopment of the water treatment plant. The current plant is located adjacent to the Ren Zone and will be taken offline after the new plant near the Industrial Park is operational.

University Avenue District: University Avenue is a gateway to downtown and this area has potential for becoming an important “town and gown” transitional area. It is anticipated that future studies will examine several redevelopment options for this area in conjunction with an examination of the entire University Avenue Corridor. Blocks 4C and 5C allow for the prominent commercial intersection of University Avenue and North Washington Street to fully capture Ren Zone benefits. Vacancies and for sale signs currently dot this corner, indicating its potential for redevelopment or higher uses.

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Heart of Downtown District: The core downtown area has seen increased interest in recent years and the momentum generated indicates the value of extending eligibility of this part of the Ren Zone. The addition of Blocks 1C, 2C and 3C bolsters the Heart of Downtown district’s representation as Grand Forks’ core downtown. Thanks to this increased interest, there has been discussion in the community as to how to expand the perceived boundaries of the downtown. The inclusion of these blocks helps we grow downtown Grand Forks.

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Vision, Goals & Objectives

The goals of the statewide Renaissance Zone Program focus on renewal, investment, and redevelopment. When Grand Forks’ original plan was developed, its Ren Zone was already undergoing an extensive period of demolition, reconstruction and redevelopment, funded to a large extent by disaster recovery assistance. The City’s overall goals for the Ren Zone continue to comply with the current overall planning environment; however, the plan update process provides the opportunity to fine tune goals, objectives and criteria to better reflect today’s development climate. Notable changes made during this update process are shown in red.

The Vision 2001 The Grand Forks Renaissance Zone is a multi-use, economically vital area which respects its historic past, appreciates its linkage to the Red River of the North, and provides recreational, commercial, and housing opportunities for investors, business owners, employees, residents and visitors.

The Vision Today The Grand Forks Renaissance Zone will promote appropriate investment in un- and under-developed properties and encourage thoughtful re-investment in and expansion of developed properties to enhance Grand Forks as a place to live, learn, work, play and stay.

Goals and Objectives

The addition of new blocks over the years has made a “one size fits all” approach too simplistic for the entire Zone. While certain goals, objectives and selection criteria are valid across the Ren Zone, each unique district warrants a unique approach. The program’s progress toward meeting those goals will be gauged by the absence of long-term vacancies, the level of investment in Zone properties and by the expansion of the tax base on a block-by-block basis.

ZONE-WIDE GOALS & OBJECTIVES . Promote the goals, objectives and strategies outlined in the 2040 and 2045 Land Use Plans, River Forks Downtown Plan (updated in 2009), and the Greenway Plan. . Strengthen the long-term viability of the Ren Zone in general and its subzones in particular as economic engines of the community . Focus attention on Ren Zone properties as prime investment opportunities . Enhance property values and build the City’s tax base

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Zone-wide Selection Criteria

All Ren Zone applications must be consistent with the Plan’s vision, goals and objectives – both overall and subzone specific.

The following projects will not be approved:

. Projects for the purchase only of property . Projects that involve a non-conforming use . Projects that negatively impact a recognized historic district or property

Further, to foster projects that will have a significant impact on Zone properties, applications involving existing buildings must also meet the following minimum criteria:

1. Exterior rehabilitation sufficient to eliminate all deteriorated conditions visible on the exterior of the building

2. Minimum level of investment Commercial: Investment in rehabilitation projects must total at least 50% of the current true and full value of the building.

Residential: Investment in rehabilitation projects must total at least 20% of the current true and full value of the building.

Purchase with Major Improvement: Investment of improvements must be at least 20% of the current true and full value of the building.

Allowable work for improvements or Rehabilitation must include structural improvements; cosmetic work or deferred maintenance alone does not qualify.

3. Project scope that addresses both interior and exterior components in a comprehensive and complete manner

4. Single Family projects are required to complete notarized Primary Residency Certificate. Example form is included as Appendix D.

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HEART OF THE DOWNTOWN DISTRICT

This district encompasses the core downtown area and is noted for commercial and residential density, its historic character, and unique public amenities such as the Greenway and Town Square. This is a vibrant neighborhood that has rebounded strongly from the disaster recovery mentality of the early days of the Ren Zone. Still, vacant spaces dot this area and infill development is still needed 20 years after the flood. It offers many possibilities for new and re-development.

Goals & Objectives . Encourage residential density . Accelerate the conversion of non-conforming to conforming uses . Encourage retail development . Enhance the appearance of major downtown corridors . Encourage ground floor uses that promote a lively, vibrant atmosphere . Support a pedestrian-oriented environment . Promote downtown as a historic, cultural, entertainment and recreational center of the City

Selection Criteria . Single Room Occupancy projects will not be approved

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UNIVERSITY AVENUE DISTRICT

This area “fills the gap” between the downtown/central business district and Washington Street, a major north-south retail corridors. It mixes single family residences with commercial uses and contains multiple zoning classifications (B1, B3, B4, R4). It offers continued potential for redevelopment to better link the downtown core with the University of North Dakota campus and students. It

Goals & Objectives . Encourage mixed-use and/or commercial redevelopment projects, especially for properties that front directly on University Avenue . Enhance the appearance of the University Avenue Corridor and its role as a gateway to downtown . Strengthen connections with the University of North Dakota . Encourage pedestrian- and bicycle-friendly projects

Selection Criteria  Projects to convert single-family homes to multi-family residences will not be approved

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CENTRAL PARK DISTRICT

Added as part of the 2011 Plan update, this neighborhood is part of the Near Southside Historic District and contains some of Grand Forks’ oldest – and grandest – homes. Many of these large homes were converted from single- to multi-family over the years and it contained several vacant lots from post-flood demolition. Those lots have undergone architecturally compatible redevelopment in recent years and there are many owner-occupants in the area who would like to see continued reinvestment that supports it as a viable and desirable single- family neighborhood.

Goals & Objectives . Preserve and enhance the residential character of this historic district . Encourage projects that reduce density in residential properties . Encourage owner-occupancy . Support construction of single-family homes on vacant lots

Selection Criteria  Projects that convert single-family homes to multi-family or that increase density in existing multi-family residential properties will not be approved  Projects for the purchase only of an existing single-family home will not be approved.

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SOUTH FORKS DISTRICT

“South Forks Plaza” was the previous name of “The Grand Cities Mall,” the enclosed shopping center that dominates this subzone (Block 12B). A smaller strip mall, “The Town & Country Plaza,” makes up Block 13B. When these facilities were developed in the late 1950s and early 1960s, they were at the leading edge of Grand Forks’ southward retail expansion; today they are located near Grand Forks’ geographic center. The retail growth area has left them behind and both have significant vacancies. This factors led to their inclusions in the 2011 Plan update. Block 14B contains the Grand Forks Public Library. Long- term community discussion indicates that the library will leave this 1970s-era building in the near future, thereby creating another redevelopment opportunity in this district. The library may choose relocate within this district, but in any case, construction of a new library will enhance redevelopment potential throughout the South Forks District.

Goals & Objectives . Improve and update the overall appearance of this district . Fill vacant commercial properties/storefronts . Revitalize this area to recreate the destination corridor it once was

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Targeted Properties and Projects

Infill Development

There are still a number of vacant lots in the Heart of Downtown and University Avenue Districts. Incenting new construction on these sites is a top priority.

323 DeMers Avenue Vacant Lot (infill) JLG Architects (Owners) 17 S. 4th Street Arbor Park (infill) City of Grand Forks 710 1st Avenue N. Green space adjacent IDA Hospitality, LLC to Red Roof Inn 207-211 N. 6th St. Vacant lots (infill) Graveline Family, LLLP

Redevelopment Opportunities

The properties listed below have significant potential for higher intensity use given their locations and proximity to commercial traffic. Either rehabilitation or new constructions project could be appropriate for these sites.

320 University Ave Garages/Warehouses Schneider, Earl (Owners) (Kitty-corner to City Hall) N. 5th St. & Vacant building with GF Public School District University Avenue on-site parking (Executive Corners) N. 5th St. & DeMers Parking lot and green GF Public School District Ave. space (Former Alerus) 816 University Ave. Laundromat &retail Donna Miller 1301 University Ave. Vacant Gas Station ValDak Corporation

Improved Corridor Connections – University Avenue

In addition to the above targeted properties, the University Avenue Corridor (and the Ren Zone properties that front along it) is targeted as a key linkage to improving the physical and social connections between downtown and UND.

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Incentives

The North Dakota Renaissance Zone Act provides for both local property tax and state income tax incentives, including historic tax credits, to encourage investment in Ren Zone cities. These are available for up to five years. The North Dakota Office of State Tax Commissioner administers the state incentives and all applicants must receive a Certificate of Good Standing from that Office to submit with their application. Property tax incentives are administered locally and, within the confines of the Act, there is local flexibility as to their extent. In both cases, a property or space may receive incentives only once, but they may be transferred to new owners during the five-year eligibility period (see page 25).

Tax Exemptions and Credits

State Income Tax: State incentives are summarized below, and are detailed in The Renaissance Zone Act Tax Incentives Guideline, which is available online: http://www.nd.gov/tax/user/businesses/incentivesexemptions/renaissance- zone-incentives

 An individual taxpayer that purchases and/or rehabilitates a single-family residence that is used as their primary residence may be eligible for a credit of up to $10,000 on their personal income tax liability for up to 5 years, starting with the date of occupancy. The property must be a single- family detached home, townhouse, or single unit in a duplex or condo- minimum complex to be eligible.

 A business that purchases, leases, rehabilitates or makes leasehold improvements to commercial property may be eligible for an exemption on business income attributable to that location for up to 5 years, starting with the date of investment, lease, or purchase.

 An investor that participates in a residential or commercial new construction project of may be eligible for an exemption on income derived from that property for up to 5 years, starting with the date of the investment.

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 If a property owner not receiving incentives for a Ren Zone project is required to make changes in utility services or in a building structure because of changes made to property that is part of a Zone project, the owner of the non-participating property is entitled to state income tax credits equal to the total amount of the investment necessary to complete the changes. These credits are available for utility services of a regulated industry (e.g., electrical, gas, communication) but not for special assessments for City-operated utilities (e.g., sewer, water, pavement). The owners of the non-participating property must submit a Ren Zone application. It will follow the standard review and approval process. The income tax credit is available for up to five years, but must be claimed in the taxable year that the project was completed. The City of Grand Forks does not offer property tax exemptions for this type of utility infrastructure projects.

Property Tax: The City of Grand Forks provides for various property tax exemptions depending on project type. The matrix on the following page details by project type both the property tax and income tax incentives available. Changes from the previous Plan are shown in red.

Historic Tax Credit: Properties listed on the National Register of Historic Places may be eligible for a state income tax credit of 25% of the amount invested, up to a maximum of $250,000. The first year for which the credit is allowed is the year in which the project is completed. Unused credit may be carried forward for up to five years.

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Management

Administration of Grand Forks’ Renaissance Zone Program is the responsibility of Planning & Community Development staff of the City of Grand Forks. Project approval at the local level is granted by the Grand Forks City Council. Final project approval is vested in the North Dakota Department of Commerce’s Division of Community Services.

Planning & Community Development (PCD) staff will assist applicants with the application process and will guide completed applications through the City Council approval process, coordinating with other City departments as needed. Following City Council approval of a project, PCD staff will submit it to the Division of Community Services (DCS) for preliminary approval. When a project is deemed complete, PCD staff will notify DCS and request final approval. At that point, the project may receive Ren Zone incentives.

Day-to-Day Management

From initial inquiry through application through project completion, PCD staff will work closely with applicants to ensure applications are reviewed promptly, and to coordinate project timelines and terms of approval. Projects that involve rehabilitation may require more detailed follow-up to verify that required thresholds are met (N.D.C.C 40-63). PCD staff will also continue to work with DCS staff on an ongoing basis with respect to both specific projects and programmatic issues.

Project Review/Approval Process 1. Applicant submits a request to the ND Tax Commissioner’s office for a Certificate of Good Standing. 2. Once the Certificate is received, applicant submits it along with the Grand Forks Ren Zone Application to the Planning & Community Development Department. 3. Application will be reviewed by PCD staff, forwarded to Grand Forks Finance & Development Committee and then City Council for action. Upon approval from City Council, the application is then sent to DCS for conditional approval. 4. PCD staff will contact applicant when project receives conditional approval from DCS; the project can then move proceed. 5. When the project is completed, applicant contacts PCD staff to establish a completion date. A business incentive agreement must be executed prior to 26

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final approval of the project. PCD will then request final approval from DCS.

6. Final approval from DCS will be provided to applicant; this will need to be submitted with the applicant’s tax return. Ren Zone incentives do not begin until AFTER the project has been completed and final approval is granted by DCS.

Transfer Requests Transfer requests -- whether of a project designation (pre-completion) or remaining benefits (post-completion) -- are managed by PCD staff. After a project receives final approval from DCS, Ren Zone incentives are available for five years. If ownership changes during that five-year window, the project and its remaining benefits may be transferred to the new owner. Simple transfers generally can be handled administratively; however, City Council concurrence may be required in some circumstances (e.g., change in scope, timeframe, etc.).

Ownership Restructuring Staff will analyze the ownership entities of all applications to ensure that restructuring and/or partial sales involve legitimate arm’s length transactions and are not done for the sole purpose of acquiring Ren Zone incentives.

Marketing and Promotion

The 2016 update of the Renaissance Zone Plan will be followed by the following marketing efforts:

 Press releases distributed through the City’s Public Information Center.  Briefs published on the City’s website.  Updates to the Ren Zone section of the City’s website, where down- loadable applications and information can be found.  Development of an updated brochure for distribution at City offices, real estate agencies, the Chamber of Commerce, the Grand Forks Region Economic Development Corporation, and the Downtown Development Association.

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Recordkeeping and Monitoring

PCD staff will retain relevant documents for each project as well as summary reports as required by DCS. These are considered public record and are available for review upon request. Projects are organized using a chronological numbering system: the first approved project is GF-1, the second GF-2, and so on. Project-specific records will include the original application with Certificate of Good Standing; project staff report; meeting minutes showing Committee recommendation(s) and City Council action; DCS conditional and final project approval; any relevant correspondence. As appropriate, project records may also include executed purchase agreements and/or leases; construction inspection reports; invoices; and records of any transfer actions.

PCD staff will monitor projects individually on an as-needed basis for compliance and in the aggregate on an annual basis for reporting purposes. In addition, the overall Renaissance Zone Program will be subject to a comprehensive local review and/or update every five years. This review will ensure that local options are responsive to any changed conditions and any programmatic changes at the legislative level are incorporated.

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Renaissance Fund Organization

The basic purpose of a Renaissance Fund Organization (RFO) is to raise funds to finance projects in renaissance zone cities. The Legislature authorizes a total amount of tax credits to be available to RFOs statewide and distributes them to cities based on population categories: less than 5,000; between 5,001 and 30,000; greater than 30,000.

Review and Approval

Selection of an RFO management entity is based on City Council’s review of that entity’s proposed use of RFO funds and its ability to further the vision, goals and objectives of this Plan. Factors that are considered include:

. Capacity of entity to attract investors, raise funds and assemble projects. . Prioritization of funds to Zone verses non-Zone projects. . Prioritization of funds to specific project types. (State law allows an RFO to invest in any residential, commercial, or infrastructure projects; however, the City may consider preferences.)

On September 6, 2011, City Council approved an agreement with Innovation Ventures, LLC, to operate an RFO under this Plan. This RFO was created to raise capital and make investments within the City’s Renaissance Zone and the UND Center for Innovation Foundation’s Innovation Park; it will operate only within the City of Grand Forks. While the City does not anticipate designating other RFOs, any such requests will be subject to the above review criteria.

Management

Broad-based oversight of the RFO is set out in the aforementioned agreement, which will expire ten years after the last of the state-allocated credits is used. Key elements of the agreement are:

1. Through December 31, 2011, the RFO may use up to 50% of its investments in projects in the Innovation Park that are approved solely by the RFO but must use at least 50% of its investments for projects within the City’s Zone boundaries that are approved by the City. After this date, all investments must be used for projects approved Zone projects.

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2. The RFO must comply with requirements of this Plan and with all applicable city, state, and federal laws, statutes and regulations.

3. The RFO must provide the City annual reports, including an audit of financial records, that (a) fully describe each activity undertaken, distinguishing between activities in the Zone and in the Innovation Park; and (b) demonstrates that each activity undertaken complies with state and local Renaissance Zone requirements. These reports will be made available to DCS.

The RFO will be marketed as a private security offered only to institutional and accredited investors. Initial targeting will be to area banks, utility companies and other institutional investors with a strong interest in supporting community-beneficial projects. Thereafter, targeting will expand to include accredited investors who support community and economic development.

Actual management of the RFO will be done by the Trustee Board of the Center for Innovation Foundation which, for the past quarter century, has managed several million dollars in assets, has operated tech incubators, and has coordinated with angel funds in North Dakota and Minnesota. The Board’s business will be governed by a member control agreement and bylaws.