FARGO – The Block 9 partners are expected to ask the Fargo City Commission for another delay in breaking ground as they alter designs for the $100 million tower and work to secure a hotel developer for the project.
Under an agreement with the city, reached last year, the Block 9 partners were to have met certain contingencies by the end of the month, including completing the sale of bonds to build the project.
But city officials have been informed that the deadline can’t be met, and construction now is expected to start next spring. City leaders have asked the Block 9 partners to appear before the City Commission at its meeting Monday, Aug. 28.
Mayor Tim Mahoney said the Block 9 partners – RDO, TMI Hospitality and Kilbourne Group – are changing some design elements to shave costs from the building, now with an estimated price tag of about $100 million, and need to clarify the hotel partner.
TMI Hospitality planned to have a hotel in Block 9, but the company changed owners and the new owners are reviewing the project, Mahoney said.
“They don’t have that part of the puzzle figured out,” he said. “They have to find a hotel partner. TMI could be a partner.”
Despite the design changes, the Block 9 tower, to be built in the heart of downtown at the corner of Broadway and Third Avenue North, still is planned as an 18-story building, the mayor said.
“It’s still the same project,” Mahoney said. “The size of the hotel’s smaller.”
A smaller hotel now is being planned because Fargo-Moorhead has added 500 hotel rooms within the past two years. “The occupancy rate has dropped significantly,” he said.
Besides size, the partners are trying to determine what kind of hotel is appropriate for downtown, in terms of price and amenities, Mahoney said. Original plans called for an 88-room “European-style” hotel on floors 8 to 11.
The mixed-use tower also would include office space for the RDO companies, retail space and residential condominiums in the “million-dollar range.”
Jim Gilmour, city planning director, said the extension, if granted, would be the fifth for the project. If all had gone smoothly, construction might have started as early as last spring. That date was delayed several times, with the latest estimate for groundbreaking in August or September.
Earlier extensions were granted by the City Commission through its consent agenda, without discussion.
In May 2016, Fargo city commissioners approved $15.5 million in tax breaks over 25 years for the project. The city also agreed to borrow $15 million to help Block 9 finance a 340-stall parking ramp and to redo the plaza on the east side of Broadway between Second Avenue North and Third Avenue North.
“The Block 9 partners are committed to project,” said Adrienne Olson, a spokeswoman for the Kilbourne Group, who otherwise declined comment. She released a new architect’s sketch of the project.
Mahoney agreed that the partners remain solidly behind the project, which would be downtown’s largest development in years. “A project this big just takes time to get everything lined up,” he said.