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UPDATE: "New" restaurant in Moorhead will be Juano's; Forum editorial board owes city an apology

by Mike McFeely

(3 p.m. 11/26/13 UPDATE: I have confirmed that the restaurant in Moorhead that is the target of tax incentives is Juano's)

I am hearing from a number of sources the restaurant that is working with city government in Moorhead to expand in downtown is Juano's Mexican Restaurant, a locally owned eatery with four locations in Fargo-Moorhead. I have not been able to confirm this with the city. Economic development director Matt Maslowski declined to name the restaurant, saying the owner didn't want the negotiations to play out publicly.

Fair enough, so I need to couch what I'm going to say by restating: I cannot get official confirmation, but I am confident the restaurant in question is Juano's. (Ain't blogging beautiful?)

Why does this matter, other than out of curiosity's sake that a restaurant is looking to expand in downtown Moorhead?

Because the restaurant in question that was going to locate or renovate in downtown Moorhead was the target of a special incentive passed by the city council that would give it an "employee credit" for new or retained employees. The credit was good up to a maximum of $25,000 per new restaurant.

This special incentive drew some media attention in Fargo-Moorhead, which is understandable. It should. It also sparked some rumors and street-chat about which restaurant might be looking at Moorhead. That is also good. Any water-cooler talk about downtown Moorhead is better than nothing.

But the special incentive has also drawn an inordinate amount of attention from the local newspaper, The Forum. Besides reporting extensively on it (including, I'm told, using the Freedome of Information Act to obtain any city e-mails that included communication about the restaurant), the newspaper used a recent editorial to blast away at Moorhead for "extending public goodies to new restaurants in the flimsy hope new eateries will set up shop."

The editorial hammered Moorhead because the incentive applied to "new" restaurants only and not "outstanding and very popular long-standing" restaurants. This opinion was formed from a news article The Forum did in which it interviewed a couple of current Moorhead restaurateurs and asked them what they thought of the special incentives.

The editorial also went on to drill away at Moorhead by saying this:

It is also galling that the new incentive seems targeted at a yet-to-be-announced chain restaurant, not a locally grown place. And it is no secret to lovers of good food that many of Moorhead's most successful restaurants have been going strong for a long time and are locally owned. They have found a formula -- good food, good service, consistency and ambience -- to do well in Moorhead. Therefore, it's easy to make the argument that local places that have stuck with Moorhead through bad times and good are getting shortchanged by city policy. In its apparent desperation to attract a new chain restaurant, Moorhead leaders are not thinking through the potential downside of the new incentive. If even one of the city's marquee restaurants does a calculation and decides the business grass is greener across the river, the net loss -- the qualitative loss -- will be Moorhead's.

Heavy, heavy words. And, apparently, all B.S. if indeed it turns out Juano's is the restaurant in question.


Because Juano's is, indeed, a locally owned business that started in Fargo-Moorhead. Since Juano's has a location in Moorhead (in the Kassenborg Building on Main Ave.), it is one of those restaurants that has stuck with Moorhead through good times and bad -- and, in fact, taken a chance by opening in a redeveloped building in downtown Moorhead. It is an established Moorhead restaurant, not a newcomer chain joint.

And there is this: Juano's has a location in downtown Fargo. I need to check on whether or not Juano's received so-called Renaissance Zone tax breaks for building downtown. It would be rich if Juano's did, because that would mean The Forum's argument against giving tax breaks to upstarts instead of established restaurants would be completely blown out of the water.

(UPDATE: I checked with Fargo City Commissioner Mike Williams and he says Juano's did not receive Renaissance Zone breaks for being in downtown Fargo.)

In other words, pretty much every point The Forum editorial board used to criticize Moorhead was wrong and, in some cases, might be totally hypocritical.

I'm told the special incentive would allow Juano's to stay where it is located in Moorhead, but "repurpose" the building in which it is located to offer a full-service restaurant like the one located in downtown Fargo.

I am one who is on record as saying cities, particularly ones that are often fighting uphill battles like Moorhead, need to use incentives to attract new restaurants and other businesses. It is a hyper-competitive world and city governments need to make their locations as attractive as possible to potential suitors. Moorhead did nothing wrong by offering incentives ... or a specific incentive to a specific business. If that is what it takes, that is what it takes.

It is not all that different from cities giving property tax breaks to large retailers like Wal-Mart or Sam's Club. 

Businesses are looking for the best deal they can get and it is up to cities to offer them good deals, to a point.

I'm assuming, if indeed Juano's is the restaurant in question, The Forum editorial board will quickly type up an apology for being wrong with their facts and, just for good measure, being a bunch of arrogant arses in doing so.

But I'm not holding my breath.

(Mike McFeely is a talk-show host on KFGO-AM in Fargo, N.D. He can be reached at mike.mcfeely@mwcradio.com. Follow him on Twitter @MikeMcFeelyKFGO.)