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EPIC Companies gets epic win; $23M proposal to develop Red River gateway site goes to Fargo City Commission

Two city panels are still evaluating proposals to build on a former School District warehouse site and at the location of the former Public Health building.

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EPIC Companies' plan to build the mixed-use Unite building at 1 2nd St. S. will have to be heard by Fargo's Community Development Committee after a 3-2 City Commission vote Monday, Feb. 7, 2022.
Contributed / EPIC Companies
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FARGO - EPIC Companies is the first among a group of developers to win the backing of two city panels evaluating bids to develop three empty or underdeveloped sites downtown and along the Red River.

EPIC’s proposal to build a $23 million mixed-use building at 1 2nd St. S. along the Main Avenue gateway to the city will be sent on to the City Commission for approval, the city’s Economic Development Incentive Committee and the Renaissance Zone Authority decided in a joint meeting at City Hall on Tuesday, Jan. 25.

The EPIC bid beat out a plan by Beyond Shelter to build a $13.36 million affordable senior housing project (presented Tuesday), and a plan presented last week by EagleRidge Development, which sought to build $35 million in condominiums and commercial space.

The key for EPIC winning the backing of a slim majority of both committees appeared to be its overarching vision for the former Gateway Center site. The firm’s Gateway North building is open and renting, and a second building called The Arch is under construction .

City Commissioner Arlette Preston said EPIC had “a grand plan for the area.”

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Mayor Tim Mahoney agreed.

“In my mind, that has some benefit,” Mahoney said.

With Tuesday’s joint meeting time limited, the committees deferred debating or voting for winners for the other two sites under consideration - the former Public Health building at 401 3rd Ave. N., or the former Fargo School District warehouse building at 419 3rd St. N.

Members of both committees said they wanted more time to fairly weigh the merits of the bids.

They’re also hoping city staff can come up with a win-win for the companies seeking control of the Public Health building and parking lot.

Kevin Bartram, one of the principals for MBA Development, made his pitch Tuesday for putting a $13 million, 68-unit apartment building at the Public Health site. That proposal called for enclosed first level parking, and four floors of apartments in an L-shape.

Bartram said the project can be adjusted to include commercial space, and to increase parking to 100 spaces.

“We really like the site” with its “awesome connection to Broadway” and nearby river and parks, Bartram said.

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Bartram said that if approved, construction could start this year and be completed in 2023.

At the Jan. 18 meeting of the two committees , Sioux Falls, S.D., firms Green Acre Development and Lloyd Companies, along with ESG Architecture and Design of Minneapolis, offered a plan for the Public Health site that included a twist.

The developers proposed a land swap. They would buy the Public Health building, demolish it, and create a parking lot for American Federal Bank. In return, the bank would give up its surface parking lot at the corner of 4th Avenue North and 4th Street. At the same time, the developers would buy the TruGreen property to the north, and create a parcel big enough for a hotel, parking and apartments.

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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 4th Avenue North and 4th Street.
Contributed / ESG Architecture and Design

That $38.5 million proposal would create a 115-room upscale AC by Marriott hotel, 108 market rate apartments in a second building, and 167 covered parking spots between them, with the project to be completed by 2024.

Committee members liked the Green Acre/Lloyd project, but some were put off by the idea of creating one surface parking lot to get rid of another.

At the close of his presentation Tuesday, Bartram planted a seed that found fertile ground: Why not find an alternative parking site for American Federal Bank and do both projects?

Mahoney and City Commissioner Dave Piepkorn praised the potential solution, and committee members asked Jim Gilmour, the city’s director of strategic planning and research, to see if a parking solution could be found to make both projects do-able.

“It’s kind of cool,” Piepkorn said after the meeting, adding he hopes both projects can be done.

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“I do think it will all work out,” Piepkorn said.

Piepkorn has been open about his ownership interest in the TruGreen property, and recused himself from last week’s discussion of the Green Acre/Lloyd proposal.

In Beyond Shelter’s pitch Tuesday for the 1 2nd St. S. site, CEO Dan Madler promised that the Fargo-based group and Foss Architecture and Interior would build affordable senior housing that “would be a long-term asset,” for the city. Their plan calls for 51 apartments and 9,800-square-feet of commercial and office space.

But committee members noted that the Beyond Shelter project required a number of incentives, including Renaissance Zone approval, a 20-year PILOT, Community Development Block Grant or HOME funding, and tax increment financing dollars.

Proposals for the third site, the former school district warehouse at 419 3rd St. N., were both presented last week.

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

The $51 million project could be built to include an affordable child care component, founders Tyrone Grandstrand and Safia Gelle said in their presentation.

Piepkorn called the project unique and a concept worth pursuing, but other members of the committees said too many of the financial aspects of the plan needed to be fleshed out, including costs to the city to help make the project viable.

Indeed, a staff description of the Authentic House project noted that the purchase price and developer ability to build the project were “tbd” or to be determined. “Lack of capital” was also noted under financial feasibility.

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

Kilbourne is offering 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.

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