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Fargo City Commission approves fifth extension for high-rise construction

An architect's sketch of the Block 9 tower that's planned for the corner of Broadway and Third Avenue North in downtown Fargo. Rendering by Skidmore, Owens and Merrill.

FARGO — The Fargo City Commission on Monday, Aug. 28, approved another delay in starting construction of the Block 9 tower at the request of developers, who say they need more time to complete preparations for the complex downtown project.

The commission OK'd the request from the Block 9 partners by a 3-2 vote. The extension is the fifth granted for the project.

The Block 9 tower, to be built at the corner of Broadway and Third Avenue North, is now expected to include an 18-story tower, containing a hotel and residences, a new parking garage, and a semi-public plaza. The cost of the project is now projected to be $117 million.

Under an agreement with the city reached last year, the developers were to have met certain contingencies by the end of August, including completing the sale of bonds to build the project. They will now have another year to do that.

The amendment approved by the commission on Monday will also push back the deadline by which construction must begin to February 2021, though construction is expected to begin sooner than that. Mike Almendinger, president of the Kilbourne Group, one of three project partners, estimated that developers still have 7 to 10 months of work to do before construction can begin.

The project is behind schedule, in part, because of the "incredible complexity of the financing," Almendinger said. "We need to solidify the banking partner for the project."

The characteristics of the project have changed slightly. The project height has been reduced by one floor. The hotel is now projected to have 110 rooms instead of 88. There will be one less residential floor. The design for the plaza has not been finalized.

Because of the design changes and delays, the project budget has been increased from $95 million to $117 million.

Two commissioners, Tony Gehrig and Dave Piepkorn, opposed granting the extension.

Gehrig expressed concern that the higher cost of the project would make the value of the tax exemptions granted by the city worth more.

"As the project cost goes up," he asked, "doesn't the commitment from the city go up? The terms keep changing. We're asked to accept them again and again."

Piepkorn's opposition was more strongly worded. He said the city should get something in return for granting the extension.

"This is a business deal," he said. "We need to get something in return. We would be fools to do this. We are setting a precedence, and it's not a good one."