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Developers make pitches for several downtown Fargo projects

All of the projects presented so far include housing, whether apartments or condos. One plan includes an upsale hotel, while others include retail and commercial space.

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Green Acre Company and Lloyd Company of Sioux Falls, S.D., have offered a plan that would include building a $38.5 million upscale hotel and apartment complex in downtown Fargo at the corner of Fourth Avenue North and Fourth Street.
Contributed / ESG Architecture and Design
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FARGO - Members of two city business incentives panels and several City Commissioners listened to developers make their sales pitches for three downtown area properties at a special meeting Tuesday, Jan. 18, at City Hall.

The presentations mirrored housing and commercial proposals made public in November, but the meeting of the Economic Development Incentives Committee and the Renaissance Zone Authority gave officials a chance to ask questions on five of the seven proposals, which promised dramatic changes along the riverfront.

The properties where officials hope to see development start this year are 1 2nd St. S. (along Main Avenue and Second Street next to the roundabout and Veterans Memorial Bridge); 401 3rd Ave. N., (the former city public health office); and 419 3rd St. N. (a former school district warehouse).

All of the projects include housing, but only one includes a hotel - and that comes with a twist.

Sioux Falls, S.D., firms Green Acre Development and Lloyd Companies, along with ESG Architecture and Design of Minneapolis, are proposing a land swap involving the former public health building in order to create a hotel and housing complex at Fourth Avenue North and Fourth Street.

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In the multi-step plan, the partners would buy the TruGreen property and American Federal Bank’s surface parking lot at Fourth Avenue North and Fourth Street, as well as the public health building.

They would raze the public health building, turning into surface parking for use by American Federal. Then at Fourth Avenue and Fourth Street, they would build a $38.5 million AC by Marriott upscale hotel with 115 rooms, 108 market rate apartments in a second building, and 167 covered parking spots shared between them.

Mayor Tim Mahoney liked the plan.

“Your project is excellent. It’s a really nice infill project for that area,” Mahoney said.

But City Commissioner Arlette Preston questioned the usefulness of building on one surface lot, then creating another surface lot.

Jim Gilmour, the city’s director of strategic planning and research, said that the bank won’t give up having parking.

“If we don’t do the (property) trade, this project doesn’t happen,” Gilmour said.

The other suitor for the public health site is Mutchler Bartram Architects, which will present its plan for a five-story apartment building during the next meeting of the joint group 1 p.m. Tuesday, Jan. 25, at City Hall.

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City Commission Dave Piepkorn recused himself from consideration of the project because he has an ownership interest in the TruGreen property.

The discussion was at times spirited over the proposals for the former school district single-story warehouse at 419 3rd St. N.

Authentic Housing, a national developer with an office in St. Paul, wants to build more than 180 apartments as workforce housing on the site.

The $51 million project could be built to include an affordable child care component, and as designed, relies on residents walking, using public transport, or renting parking for their vehicles, founders Tyrone Grandstrand and Safia Gelle said.

“It’s a very unique proposal and something we haven’t encountered” before, Piepkorn said, adding that such a project is worth pursuing.

But Mahoney wasn’t satisfied with the financial aspects of the project, calling for clarity on the city’s costs related to transportation and in other areas.

“You want us to put $2 million up front and you don’t have any investors behind what you want to do?” Mahoney asked.

Mahoney called for a more detailed rundown of the project's finances.

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At that point, an unidentified woman took over the podium, pleading for affordable housing.

“I don’t think you understand how hard it is to make a living” here, said the woman. "The people who live downtown can’t afford to live here. The people who work in the bars and restaurants can’t afford it.”

Former commissioner John Cosgriff agreed with Mahoney.

“You’re innovating, but innovators must fully explain how things are going to work,” Cosgriff told the Authentic Housing representatives. “I would encourage you to come forward in very detail in how this works.”

The other suitor for the land is the Kilbourne Group, an established developer in downtown Fargo over the past 15 years.

Kilbourne offers three options for the property, including a 75-unit project for $15 million; or a 115-unit structure for $25 million, but on the warehouse property; and a massive $67 million project that would also involve buying the former Fargo school district administrative building next door.

Keith Leier, Kilbourne’s vice president of development and construction, said the company has 95% occupancy for the housing it has built.

There are three proposals for 1 2nd St.

Jonathan Youness, director of development for EagleRidge Development, said his company has experience and the backing for large projects.

The $35 million EagleRidge project would be mixed-use office, retail, and condominiums, plus mainfloor and underground parking.

“We feel like we are presenting the highest and best use for this property,” Youness said.

But EPIC Companies is hoping to build its third building of its master plan for the Gateway area.

EPIC’s President Todd Berning said the $23 million building would be called Unite, and would complement the company's Gateway North and The Arch buildings just to the west.

EPIC has built more than 25 mixed-use buildings, many in the Fargo-Moorhead-West Fargo area, Berning said.

“We are downtown people. We work with downtown groups," Berning said. "We know community. We know public spaces."

Beyond Shelter Inc. and Foss Architecture and Interior of Fargo are to make their presentation for the site next Tuesday. Their plan calls for a $16.3 million affordable housing complex with parking.

Whether or not any of the projects is eligible for tax incentives will be reviewed later, Gilmour said.

Over the past six years, 4,334 apartments have been permitted citywide, for an average of 722 units permitted yearly, Gilmour said. In the downtown area over that last six years, there were 1,153 apartments permitted, for an average of 192 a year.

Helmut Schmidt is a reporter for The Forum of Fargo-Moorhead's business news team. Readers can reach him by email at hschmidt@forumcomm.com, or by calling (701) 241-5583.
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