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West Acres mall owners purchase vacant Fargo Herberger's building at auction, plan to redevelop property

“It’s been a perception problem for us, even if it hasn’t had a financial impact,” West Acres Development CEO Brad Schlossman said.

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The ownership group of Fargo's West Acres Shopping Center has purchased the vacant Herberger's anchor store, pictured Wednesday, Dec. 29, 2021.
David Samson/Forum Communications Co.

FARGO - The ownership group of the West Acres Shopping Center has purchased the former Herberger’s department store building and plans to redevelop the spot where the former retail favorite now stands.

West Acres Adjacent Properties, whose members mirror the ownership of West Acres Development, was the only bidder for the property in a mid-November auction by a consortium of banks that owned the property.

The winning bid of $725,000 was also the minimum bid for the auction, though other costs related to the sale brought the total cost to about $760,000, Brad Schlossman, CEO of West Acres Development said Tuesday, Jan. 4.

Schlossman said “it’s a big deal” to be able to control the property.

“It’s been a perception problem for us, even if it hasn’t had a financial impact. It’s also been a missed opportunity,” Schlossman said.

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Plans for the property are not ready to be disclosed, he said.

Iin the meantime, an assessment of the asbestos in the building and abatement will get under way. After the asbestos is removed, the building will likely be torn down to make way for new construction, though that outcome is not guaranteed, West Acres Development COO Alissa Adams said.

“The asbestos abatement on that building is going to be very expensive. We still don’t know that dollar amount. … We expect that number to be a big one,” Schlossman said.

In fact, the prospect of a big bill for asbestos abatement “probably scared off other bidders,” he said.

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The West Acres Shopping Center is adding Thai Street Food to its food court. The south Fargo mall is seen here Wednesday, Dec. 29, 2021.
David Samson/Forum Communications Co.

Once the hazard is assessed, it will take four to six months to clean up the property.

“From the outside it will look like nothing’s happening for a while. We hope people will be patient,” Schlossman said.

Schlossman said the mall’s owners got a lesson in bringing a building up to date with the redevelopment of the old Sears store , which was the mall’s east side anchor before it closed.

“This one looks like it will be a lot more expensive than trying to retrofit Sears,” he said.

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Oddly, the mall didn’t suffer in terms of sales after Herberger’s closed, Schlossman said.

He said “sales took a nice upturn in 2018.”

Herberger’s customers apparently opted to shop at the mall’s two similar anchor stores, Macy’s and J.C. Penney, Adams said.

The placement of Herberger’s on the west end of the mall didn’t create a dead-end corridor, so the flow of shoppers can easily bypass the shuttered store, Schlossman said.

Schlossman said the owners of West Acres feel confident about the future of the mall. He added that 2021 has been “an extremely strong year” for the mall, “well beyond what we ever projected.”

He predicts that when the final sales numbers are tallied, the shopping center will set a new sales per square foot record in 2021.

Herberger’s was founded in 1927 in Osakis, Minn.

The Fargo-Moorhead area welcomed the first Herberger’s to the Moorhead Center Mall in 1983.

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In 1997, Herberger’s merged with Proffit’s Inc. which evolved into Saks Inc.

The Fargo Herberger’s opened in West Acres in 1998, when the local deLendrecie’s department store became a Herberger’s

In 2006, Bon-Ton Stores purchased Herberger’s, Carson Pirie Scott, Younkers, Boston Store and Bergners.

Real estate investment trust W.P. Carey purchased the Fargo Herberger’s land and building from Bon-Ton in 2015.

It was in February 2018 that Bon-Ton, battered by e-commerce competition, sought bankruptcy protection. By April 2018, Bon-Ton announced it would close all of its brick and mortar stores and liquidate. The Fargo and Moorhead Herberger’s stores closed in late August of that year.

In 2019, At Home, a big box store specializing in home decor products, appeared to be preparing to move into the former Fargo Herberger’s. A permit was even issued for $3.4 million for work on the building. But a deal was never finalized.

In November 2019, banks holding the debt on the property took possession of it from a subdivision of W.P. Carey, Schlossman said.

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