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Fargo skyscraper project has hotel, office partners; city help still in works

A diagram of the Block 9 tower proposed by developer Doug Burgum in downtown Fargo.1 / 3
The legend for the diagram of the Block 9 tower. Source: Special to The Forum. 2 / 3
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FARGO – With a partner already interested in developing a hotel and office space at his proposed downtown high rise, developer Doug Burgum is still looking to partner with City Hall.

Burgum’s Kilbourne Group wants city help in building a parking ramp and public plaza.

The group is in talks with the city planning office about the precise financing tool, General Manager Mike Allmendinger said. He said the firm is also looking for partners to develop condos and retail space.

“I think they’re closer to something than they’ve ever been,” Mayor Tim Mahoney said.

Kilbourne Group has been looking for a project to fill the surface parking lot at the corner of Broadway and Third Avenue North for about six years, eventually settling on a high rise it calls the “Block 9” tower that would be the tallest occupied building in the state.

Burgum has bemoaned parking lots downtown as inefficient use of space and has worked to place buildings on them, such as the one south of the Fargo Theatre.

City Commissioner Dave Piepkorn, who has been talking about tax incentives with the group, expressed enthusiasm for the project. “You’ll be amazed when you see what’s going there. It will be one of the biggest projects in the history of downtown Fargo.”

Shorter tower

Kilbourne Group had not previously disclosed publicly that it had hotel and office tenants worked out for the project. But Allmendinger demurred when asked last week about the project’s progress.

“I’ve learned probably to not be too optimistic about that,” he said. “You can ask 10 people that are involved in this project right now, and we would probably all give you a different answer because until we have solidified partnerships created, there’s a lot of risk.”

At one point, Piepkorn hoped to get some city offices in the high rise, but he said it appears there is no space available for that now, which suggests they may already be spoken for.

The skyscraper’s size is apparently being scaled back a third time.

A diagram of the tower that Kilbourne Group provided to The Forum last week shows a 16½-story building with 241,000 square feet of space on the corner of Broadway and Third Avenue North. To the east is a parking ramp and to the south a public plaza.

The diagram doesn’t show the exact height of the tower, but it offers significantly less space than the 352-foot building first proposed in 2013, which was 23 stories with 500,000 square feet of space – a project Kilbourne Group estimated at the time would cost $125 million. By 2014, plans for the skyscraper called for a shorter, 312-foot mixed-use tower.

If the height of each floor were comparable to the 2013 version, the more recent version would be about 250 feet, still taller than the state’s tallest building, the 242-foot state Capitol, and Fargo’s tallest building, the 207-foot Radisson hotel.

Allmendinger said the diagram, which provides a model of the high rise’s basic volume and how it will be used, was developed by Skidmore Owings & Merrill, a Chicago firm famous for designing some of the world’s tallest buildings, such as the Willis Tower in Chicago and the Burj Khalifa in Dubai.

He stressed that Kilbourne Group’s main effort now is not design, but developing the business plan with its partners.

Incentives

Mahoney said the city is looking at different kinds of incentives to see which ones will get the best bang for the buck. Property tax rates are low enough – falling from 2 percent to less than 1.5 percent over the last few years – that incentives have to last longer to entice investors, he said.

Piepkorn, who describes himself as a fiscal hawk, said his enthusiasm for Block 9 is tempered by the need for fiscal restraint. “You want it to be a good deal, but you don’t want to be overly generous.”

The mayor said the city may have to agree to come up with a different approach to incentives for projects as big as the Block 9 tower. The traditional approach is aimed at much smaller projects with potential payoffs that are smaller, he said.

As with most tax incentives, the aim of incentives is to encourage economic development and to have more valuable properties that pay more taxes. A $125 million building, at the present tax rate, would pay nearly $2 million a year in taxes.

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