The Renaissance Zone (RZ) Program was formulated in 1999 (approved by the 56th Legislative Assembly), which enabled local governments the ability to establish Renaissance Zones. The program is intended to encourage economic development and investment opportunities in the downtown business district.
The original City of Fargo RZ Development Plan was approved in December of 1999 and updates were completed in 2001 and 2003. The Plan was recently updated (December 2015): 2015 Renaissance Zone Development Plan.
Since inception of the program in 1999, the City of Fargo has approved 250 RZ projects which include a combination of new construction, rehabilitation, tenant leases and residential purchases (condominiums) projects. More specifically, RZ projects have included the renovation of 67 buildings and the construction of 8 new buildings equating to $125 million of additional investment in the downtown core. Overall, downtown property values have increased by over $380 million over the term of the RZ Program from approximately $197 million in 1999 to $583 million in 2014.
What are the incentives?
The Renaissance Zone Program includes two (2) primary incentives which include the possibility of property tax and income tax exemptions for qualified projects as well as opportunities to pursue historic preservation and renovation tax credits.
As a general overview:
New Construction, Rehab Projects and Residential Purchases
- 5 year, 100 % property tax exemption on the value of the building (excludes land)
- For Business or Investment Properties - 5 year, 100% exemption on any tax on income derived from the business or investment location (up to $500,000 per year)
- For Residential Purchases - 5 year, 100% exemption on up to $10,000 of personal income tax liability ($50,000 total)
Commercial / Tenant Leases
- Tenant Leases (project must be within a building that has been approved as a RZ project) - 5 year, 100% exemption on any tax on income derived from the business location (up to $500,000 per year)
Historic Preservation and Renovation Tax Credits
- North Dakota Historic Property Preservation Tax Credit - a credit against state tax liability of 25% of the amount invested up to $250,000. For additional information, visit http://www.history.nd.gov/hp/.
- Federal Historic Rehabilitation Tax Credit - federal income tax credit of 20% of the amount invested for certified rehabilitation and certified historic structures. For additional information, visit http://www.nps.gov/tps/tax-incentives.htm.