FARGO — A tax break for redeveloping the old Kmart site on South University Drive was unanimously approved by the city’s Tax Exempt Review Committee on Tuesday, Nov. 23.

The $1.45 million tax increment financing plan for the $20-25 million project goes next to the City Commission for its approval.

West Fargo-based developer Enclave’s plan for the site — a mix of retail, restaurants, services and low-income housing for seniors — was praised.

The senior housing “is really what makes it a great addition for our city,” City Commissioner Dave Piepkorn said.

“The best part of it is we’ll take an old, run-down retail site… and breathe new life into it,” committee member John Cosgriff said.

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Mayor Tim Mahoney has confidence in Enclave's work, too.

“I think what we’ve seen in (area) redevelopment by this group” is great, Mahoney said.

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Grove Enclave will be the entity owning the mixed-use and commercial development.

Enclave co-founder and joint CEO Austin Morris told the committee that if the TIF is approved by the City Commission, demolition of the Kmart building could take place in December.

Enclave has been working on the site plan and re-zoning issues for the site since January, when the City Commission approved making a renewal plan and reviewing the proposal's finances.

The western portion of the site at 2301 S. University Drive is dedicated to housing for low-income seniors, a project being taken on by Beyond Shelter. The eastern portion of the site will be for commercial development, including retail and restaurants,

Jim Gilmour, the city’s director of strategic planning and research, said that the TIF will be set up for 15 years, but could end in 13 or 14 years, depending on how rapidly tax revenues from the site accumulate.

According to city documents:

  • The project will have more than 92 multi-family housing units for seniors. The two buildings will total about 89,520 square feet.
  • There will be about 43,700-square-feet of commercial space. Morris told the committee that there is already robust interest in the retail component of the project.
  • The Burger King restaurant on the site is about 30 years old, Morris said. He said Burger King could yet decide to build a new store on the site, or another restaurant could take over that pad.
  • A 600-square-foot coffee shop will be built in 2022.
  • Fast-food restaurants will be built in 2022 and 2023. No specific restaurants were named.
  • A 9.600-square-foot car wash is planned for 2022.
  • A tire store will be a minimum of 6,300 square feet with a quick service tire and oil change area. Or, the space could become a retail or office building if the prospective tire store tenant does not sign.

The site was made for the 1970s-era big box store, but the building, while usable, is worn out. The parking lot is also at the end of its useful life, Morris said.

A representative of PFM, a firm hired as a financial advisor by the city, agreed that the TIF was appropriate and needed.

Committee member Jim Buus questioned the need for a TIF, being that the location didn’t appear to be a “brownfield” site, since it is not an industrial area and fairly flat.

But Gilmour said that even though the Kmart property isn’t a toxic waste site, there is old asphalt to be removed and the building has asbestos to be remediated.

“This whole thing needs to be redeveloped,” Morris said. “The building’s condition is bad.”