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Fall start for Kilbourne’s downtown Fargo tower; RDO to be part-owner, main office tenant

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This rendering, provided by Kilbourne Group, shows a view of the plaza of the Block 9 tower that the group is aiming to start construction on sometime this fall. 3 / 7
Doug Burgum, Chairman and Founder of the Kilbourne Group, left, and Mike Allmendinger, General Manager of the Kilbourne Group on Friday, Oct. 30, 2015, in downtown Fargo. Dave Wallis / The Forum 4 / 7
A diagram of the Block 9 tower proposed by Kilbourne Group in downtown Fargo. 5 / 7
This rendering, provided by Kilbourne Group, shows a view of the plaza of the Block 9 tower that the group is aiming to start construction on sometime this fall. 6 / 7
This rendering, provided by Kilbourne Group, shows a view of the plaza of the Block 9 tower that the group is aiming to start construction on sometime this fall. 7 / 7

FARGO – Kilbourne Group says construction may begin this fall on a downtown tower that could cost more than $100 million, and serve as the new corporate headquarters of RDO Equipment Co.

The development group said public funding is a “critical” part of the project it’s calling “Block 9.”

Kilbourne wants to build a 16-story, 248,000 square-foot mixed-use tower made up of offices, a hotel and condominiums at the southeast corner of Broadway and Third Avenue. The project also calls for renovating the U.S. Bank plaza to the south.

Kilbourne and its business partners want city officials to agree to a so-called public-private-partnership whereby taxpayer dollars would help pay for a parking garage, skyway, the renovation of the U.S. Bank plaza and burying power lines.

Fargo City Commissioners on Monday voted 4 to 1 to begin negotiations with Kilbourne on the partnership. Commissioner Tony Gehrig dissented after saying he was concerned about Kilbourne “asking for public dollars.”

Kilbourne says it will also seek property tax breaks through the city’s Renaissance Zone and other breaks through a program called TIF, or tax increment financing.

Kilbourne announced Monday the new tower it plans to build will serve as the corporate headquarters of Fargo-based R.D. Offutt and RDO Equipment Co.

Another Fargo-based company, TMI Hospitality, will manage an 88-room hotel in the building.

“This is an exciting milestone for our entire community,” Doug Burgum, Kilbourne’s founder and chairman and a Republican candidate for governor in North Dakota, said Monday in a news release.

Scott Neal, president of real estate for RDO, told The Forum the company will be co-developers of the Block 9 tower. RDO and Kilbourne will be equal partners in the entire project, he said.

Neal said the tower's first level will have retail space, and above that will be five to six levels of office space. On top of that, there will be a four-level hotel and then four to five levels of condominiums.

Kilbourne remains mum on the tower’s exact height, but suggests it could eclipse Fargo’s tallest building, the 207-foot-tall downtown Radisson hotel.

Neal said RDO, which has four office sites in the Fargo-Moorhead area, will be consolidating all of those sites into the tower, where the company will occupy four floors.

"We're excited to be part of a project that doesn't come around very often," he said. "We view this site as the No. 1, single-best location in all of the F-M area, and we like to be associated with No. 1."

In February 2015, RDO bought 52 Broadway, a downtown building that houses Fort Noks bar, and the vacant lot next door with the intention of turning it into company headquarters. But the Block 9 project changed those plans, Neal said.

Doug Burgum"We felt that the Block 9 site was a better opportunity and better fit for us," he said.

Neal said RDO does not yet know what it will do with the Fort Noks building or the neighboring lot.

He said a total dollar figure for the Block 9 project has not been determined. "There's still a lot of details left to be ironed out," he said."The final design hasn't been completed."

The most visible of RDO's four current offices is its corporate campus at 700 7th St. S., near Island Park in Fargo. Neal said it was too soon to say what will happen to that site once RDO moves into the tower. "As far as a construction timeline, we're 2½ years away from vacating that facility," he said.

The hotel, which will occupy four stories in the tower, will be “higher-end” and associated with a hotel chain such as Marriott, said Joe Delli Santi, TMI vice president of corporate development.

“Think more HoDo than Raddison in nature,” Delli Santi said of the planned hotel’s style, referencing the boutique downtown Hotel Donaldson, which is independently owned.

TMI will serve as the hotel’s owner, developer and operator, Delli Santi said. TMI has three hotels in the area: the Residence Inn and Comfort Suites in West Fargo and the Fairfield Inn and Suites Fargo.

The tower would have shared amenities, Delli Santi said, including a full-service restaurant, gym and pool.

He said downtown was an attractive place to put a new “lifestyle and boutique” hotel.

“You have a ton of growth and development in the downtown environment,” he said.

Along with the tower space, developers envision converting the U.S. Bank plaza into a “community gathering and event space,” with a water feature and an ice skating rink, Kilbourne said.