Council hears proposed TIF district and $295,000 assistance request for Northwoods Industrial Services
May 14, 2026 | Fergus Falls City, Otter Tail County, Minnesota
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The Fergus Falls City Council received an overview of a proposed tax-increment financing district tied to an expansion for Northwoods Industrial Services. Jason Murray presented the TIF plan, which would create a one-parcel economic-development district for a new 22,000-square-foot facility.
Murray said the developer is requesting $295,000 in TIF assistance to be paid over the life of the district on a pay-as-you-go basis; the TIF plan sets a budgeted maximum increment collection and expenditures of about $556,000 over a nine-year life. "This is strictly a pay as you go, relationship with this developer," Murray told the council, noting the city would typically pay roughly 90% of annual increment receipts to the developer with 10% retained for city administration and reporting.
The TIF package includes a business-subsidy component because the requested assistance exceeds $150,000; Murray said that component will include job and wage requirements and that the developer anticipates creating about 10 new jobs at roughly $30 per hour. Murray also cited a market-value estimate from the county assessor of about $2.7 million in new market value tied to the project.
Murray described the council's options if job targets are not met, including extending timelines, terminating the agreement or canceling the district; he also noted potential interactions with a Minnesota Investment Fund loan the developer may pursue but that the fund was not included in Murray's pro forma because it was not yet committed.
Council members asked technical questions about construction cost comparables, assessment of parcel separation (the existing SCR parcel would remain taxable), and administrative expense reimbursement. Several council members expressed support and urged nearby businesses to consider expansion. The council held no vote at the briefing; a public hearing and formal council action on the TIF plan and business-subsidy agreement are scheduled for Monday night.
Murray said the developer is requesting $295,000 in TIF assistance to be paid over the life of the district on a pay-as-you-go basis; the TIF plan sets a budgeted maximum increment collection and expenditures of about $556,000 over a nine-year life. "This is strictly a pay as you go, relationship with this developer," Murray told the council, noting the city would typically pay roughly 90% of annual increment receipts to the developer with 10% retained for city administration and reporting.
The TIF package includes a business-subsidy component because the requested assistance exceeds $150,000; Murray said that component will include job and wage requirements and that the developer anticipates creating about 10 new jobs at roughly $30 per hour. Murray also cited a market-value estimate from the county assessor of about $2.7 million in new market value tied to the project.
Murray described the council's options if job targets are not met, including extending timelines, terminating the agreement or canceling the district; he also noted potential interactions with a Minnesota Investment Fund loan the developer may pursue but that the fund was not included in Murray's pro forma because it was not yet committed.
Council members asked technical questions about construction cost comparables, assessment of parcel separation (the existing SCR parcel would remain taxable), and administrative expense reimbursement. Several council members expressed support and urged nearby businesses to consider expansion. The council held no vote at the briefing; a public hearing and formal council action on the TIF plan and business-subsidy agreement are scheduled for Monday night.
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