Fargo Renaissance Zone group tours downtown sites transforming with help from tax incentives

FARGO-Jim Gilmour's job as planning director means he knows all about construction projects-at least on paper.On Wednesday, Nov. 15, Gilmour and members of Fargo's Renaissance Zone Authority left the paperwork behind to look at downtown propertie...
This commercial space in the Historic Union building will be occupied by KFI Engineers. David Samson / The Forum

FARGO-Jim Gilmour's job as planning director means he knows all about construction projects-at least on paper.

On Wednesday, Nov. 15, Gilmour and members of Fargo's Renaissance Zone Authority left the paperwork behind to look at downtown properties benefiting from tax incentives.

"Until you really get out and see this space, you start to feel the real impact to the downtown," he said.

Planner Derrick LaPoint said a tour like this hasn't happened for several years, and he'd like to schedule them more often so members can see for themselves what these incentives are doing.

Making it happen

The tour kicked off at the Historic Union that formerly housed Union Storage to the west and Armour Creamery to the east.

LaPoint said it had an assessed value of $700,000 before new owners John Williams and Jessica Barner Alsop invested more than $10 million. In exchange, they'll get a five-year property tax exemption of about $631,000.

Leasing Specialist Devon Lawler said the west side, 1026 NP Ave., now has 38 loft-style apartment units with 37 leased. Work is underway on the east side, 1100 NP Ave., where KFI Engineers will take the third floor and other businesses will eventually move in.

Gilmour said it's a drastic transformation.

"I thought this building was heading for the wrecking ball," he said.

That same description could apply to the Stable Building, 6 12th St. N., which was built in about 1905 as a horse stable. Project Manager Mike Zimney said it was in rough shape with an assessed value of $60,000 when Kilbourne Group purchased it.

Breezee and Ethan Hennings are now turning it into Wild Terra Cider and Brewing, Fargo's first cidery. LaPoint said it'll get a five-year property tax exemption of $19,000 for more than $250,000 of improvements.

The former One World Boutique building, 614 Main Ave., is now home to Front Street Taproom on the main floor, private offices upstairs and a vacant retail space in the basement. The new owners got a $40,000 tax break for an investment of about $500,000 in a building with a previous value of $400,000, LaPoint said.

Justin Berg described the renovation-which included adding a stairwell, installing new exits and updating mechanical systems-as a "learning experience" that was stressful, but worth it.

"The Renaissance Zone, to have that as a guide, that really set the bar high for us," he said.

The tour ended at several Kilbourne Group properties, including Roberts Commons, 625 2nd Ave. N. A new 455-stall parking garage opened this summer, replacing a surface lot. The property will gain a retail and apartment wrap building that will open next spring.

Once that's done, Kilbourne Group will redevelop another lot just across Second Avenue North, and the developer also plans to redevelop parking spaces behind the Black Building.

According to Zimney, these projects will generate $500,000 to $700,000 of property taxes on parking lots that formerly boasted $5,000 to $10,000 of tax revenue.

Former Mayor Bruce Furness, a member of the Renaissance Zone Authority, said a main goal of downtown revitalization was to "get rid of these gaps" of underused spaces.

"You're doing a good job getting rid of those gaps," he said.

At the Black Building, 118 Broadway N., Kilbourne Group is renovating the second through fifth floors for office tenants. The top three floors will be rehabbed after that, followed by a full renovation of the lower levels.

Zimney said 70 to 80 people worked in Black Building offices when Kilbourne Group purchased it, though it has room for 350 to 500 office workers once it's refurbished.

LaPoint said Kilbourne Group will get a five-year property tax exemption of $205,000 in exchange for investing nearly $8 million in a building previously valued at $2.5 million.

The developer also showed initial demo work to build new apartments in the former Broadway Hotel above Subway, 115 Broadway N., as well as a neighboring building to the north where new apartments will be built above Teaberry and the former Sweeto Burrito restaurant.

The former Metro Drug, 123 Broadway N., is being split into three separate commercial spaces. Wasabi will relocate there next year, while stores or restaurants are expected to move into the other two spots.

Zimney said it's a perfect example of making old buildings work for modern businesses. Broadway-facing buildings have a depth of 140 feet, he said, but modern retailers want a shallower depth of about 60 feet instead because they don't need as much storage space as old businesses.

Kilbourne Group General Manager Mike Allmendinger said the developer values the Renaissance Zone program as a tool to enable big improvements to old buildings.

"We know for sure that these projects would not happen if it wasn't for these programs," he said.