High cost of specials needs to be addressed. Focus development in areas with existing infrastructure, not continued sprawl

How far south should Fargo grow? Costs may require limits

RURAL FARGO – Surrounded by miles of farmland, an industrial park is under construction where Interstate 29 meets 100th Avenue South.

From here, it’s about two and a half miles to the closest developed part of Fargo and roughly the same distance to the closest developed part of Horace.

Paces Lodging Corp., the developer of the Commerce on I-29 project, told city leaders more than a year ago that there’s a demand for affordable industrial space that simply can’t be met within city limits where costs are higher.

Mike Williams was the only city commissioner who argued against that logic at the time. He said it gets pretty expensive for taxpayers if developers are allowed to skip over industrial-zoned land within city limits where, at the behest of other developers, the city has already spent a lot money on streets and sewers.

While Commerce on I-29 is an extreme example — few other developers have pushed so far south within Fargo’s zoning jurisdiction and outside city limits — it does illustrate the economic drive that’s led the city to expand its footprint by 31 percent since 2000.

It also illustrates the dilemma Fargo faces in paying for that growth, which includes not just building new infrastructure but providing services such as snow plowing, and police and fire protection in new areas.

Mayor Tim Mahoney said it’s important to not go against market forces, which has led to successful neighborhoods such as Osgood in the city’s southwest. But, he said, city commissioners are beginning to debate how the city grows and Williams isn’t wrong about the need for efficiency. “Our challenge will be where do we go from here. Are we going to 76th (Avenue South)? Are we going to 100th?”

Setting goals

The debate isn’t entirely about how far south the city should grow but how dense.

Advocates of high-density growth such as Williams and Doug Burgum, a major downtown developer, say the city shouldn’t expand into new areas until existing areas are built up. Within city limits, streets and sewers already exist so the city wouldn’t have to finance new infrastructure. Building up in existing areas, a practice called infill development, also increases property values in those areas, allowing the city to better recoup the cost of services through property taxes.

There is actually broad agreement within City Hall and in the public that high-density growth is preferred to the kind of leapfrog development represented by Commerce on I-29. The city’s growth plan calls for more residents per acre while the Go 2030 plan, developed with the input of residents, calls for more infill development.

In 1950, there were 10.7 Fargo residents for every acre. In the decades since, the city’s physical size has grown faster than its population. There are now 3.7 residents per acre. So growing farther south without a huge increase in population would contradict the city’s growth goals.

And the city does have leverage allowing it to work towards those goals.

The cheapest road, a two-lane asphalt road, costs an average of $2.3 million a mile and underground pipes cost $1.8 million a mile, not including rebuilding the road on top, according to the Engineering Department. Given those costs, the city’s willingness to provide financing can make or break projects. Typically, the city doesn’t require landowners to pay special assessments to cover its costs for 10 years or until the property is developed, whichever happens first.

The city also controls zoning as far as four miles outside city limits in areas where it expects to grow. That gives it a say over the kinds of buildings constructed and how many people are allowed to live in them.

While Commerce on I-29, located outside of Fargo, is getting infrastructure and services from other local governments it still had to go to the city for a zoning change. Most commissioners may have been persuaded because the city didn’t have to pay for anything.

Market forces

Mahoney, who doesn’t disagree with the general goal of high-density growth, cautioned against contradicting the market.

The Osgood neighborhood, which came about in the early 2000s, is filling in rapidly with high-value properties and is dense enough that residents can walk or bike to stores, the mayor said. Had the development come before the commission five years ago, when high-density growth became more popular, he said, he doubted city leaders would’ve approved of growth so far south.

But not all developments work out as expected.

Burgum, who was a software mogul before he became a downtown developer, said when he built what’s now the Microsoft campus down south he had a lot of support from city leaders who thought it would trigger new developments.

Fifteen years later, there are still empty fields north and south of the campus, which lies along Interstate 29 between an extension of 44th Avenue South and 47th Avenue South.

How far south?

Within Fargo proper there is now close to 49 square miles, with developed areas stretching as far south as 76th Avenue South.

Williams said the city should offer incentives for growth within city limits because that’s more efficient and allow new growth no farther than 64th Avenue South, at least until the flood diversion is done. Properties farther south are just too vulnerable, he said.

City Planner Jim Gilmour used the same logic when he suggested going as far as 76th Avenue South.

Between the present city limit and 76th Avenue there is around 4 square miles still outside city limits, which Gilmour said is enough for another 10 to 15 years of growth.

Commissioners generally agree that any new growth should be adjacent to existing infrastructure but they have yet to agree to a line in the soil, according to Mahoney. “We’re at a point where we’re going to have thoughtful discussion about how much further south we’re going to go.”

They’ll have to decide on a policy soon.

Planning consultants told them earlier this year that the city has grown faster than planners expected. Given the current trajectory, they said that, in 15 years, the area roughly between 76th and 88th would be 60 percent developed and the area between 88th and 100th would be 10 percent developed. Currently, those areas are less than 5 percent developed. The cost of streets to serve the new growth is estimated at nearly $260 million with Fargo bearing most of the brunt.