Most valuable township? Spiritwood Township may take the title with new plant

Talk about it

The calculations are a little imprecise but when the Spiritwood Nitrogen Project is completed it will likely make Spiritwood Township the most valuable in the state of North Dakota.

“I think Spiritwood Township could end up the highest-valued township in North Dakota,” said Dustin Bakken, director of tax equalization for Stutsman County. “It may top the list by far.”

The current North Dakota township with the highest value at $361 million is Hay Creek Township in Burleigh County, according to Marcy Dickerson, state supervisor of assessment with the Office of North Dakota Tax Commissioner. Hay Creek Township is largely a rural residential area near Bismarck containing high-end housing.

Spiritwood Township currently has a value of $43 million. Of that amount, $42 million is attributed to the Cargill Malting Plant. Great River Energy, Spiritwood Station, does not have an established value because it pays taxes based on coal consumption rather than the value of its building and lands. The plant is currently shutdown due to low demand for electricity in Minnesota.

With two planned projects in the works, Spiritwood Township’s value is expected to grow.

The Dakota Spirit AgEnergy ethanol plant had an early engineer’s estimate of about $300 million in construction costs. The nitrogen project by CHS Inc. has a $1.2 billion construction estimate. Between the two projects, a total of $1.5 billion in construction is planned in the next four years.

Dickerson said construction costs are not equal to values used to calculate property taxes. North Dakota property taxes are based on real estate valuations. This includes the land and building costs but not the cost of equipment installed in the plants.

“Even if the valuation for taxes is 50 percent of construction cost, the value of the Spiritwood Nitrogen project is $600 million,” said Casey Bradley, Stutsman County auditor/chief operating officer.

If the same estimate is true of the Dakota Spirit AgEnergy ethanol plant, the two facilities could be valued at about $750 million for taxes. Added to the existing value of the Cargill Malting plant, the value of Spiritwood Township could approach $800 million. This would amount to more than a 50 percent increase in the total value of all property in Stutsman County, which currently stands at $1.4 billion, Bakken said.

It would also be more than double the valuation of any other rural township in North Dakota.

“That large an increase in valuations should lead to a reduction in mill rates,” he said.

However, that may be a few years off.

North Dakota law allows property tax exemptions of up to 10 years for facilities such as Dakota Spirit AgEnergy that use agricultural products. Other industrial facilities can receive exemptions of up to five years.

“There have been no discussions on tax breaks for Spiritwood Nitrogen,” Bradley said. “We’re assuming they will, but it is still too preliminary.”

Bradley said the county would consider the number and pay of jobs created by the project when determining property tax breaks.

And the law may change.

“The reason coal-fired plants are taxed on the amount of coal is the valuations are so high for a single location,” Dickerson said. “It would take legislative action but they could look at doing something similar for other energy-related plants.”

Bradley said North Dakota retains 85 percent of taxes collected from coal-fired plants with the rest distributed to the counties where the plants are located and to all political subdivisions within the counties.

Sun reporter Keith Norman can be reached at 701-952-8452 or by email at knorman@jamestownsun.com

Tags: local news, news, taxes