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Fargo's old Kmart site receives aid packages to make new housing possible

The former Kmart building is expected to be demolished by next summer with work starting on the units this coming fall and hopefully completed by fall of 2023.

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A variety of packages have been approved to help redevelop the vacant Kmart building along University Drive in south Fargo. (Helmut Schmidt / The Forum)
Helmut Schmidt / The Forum
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FARGO — Enclave co-founder Austin Morris said he drove by the old Kmart site on South University Drive here last year and asked his then 6-year-old daughter what she thought should be done with the vacant building and parking lot.

"Do something that helps people," she told her father.

Morris relayed that story to the Fargo City Commission last week as the board approved the site's rezoning and renewal plan.

Part of the project will create 88 apartment units for low-income senior citizens built through Beyond Shelter Inc. on 4 acres on the west side of the property.

Such affordable housing is sorely needed in the city. Similar current apartment units for low-income seniors are almost entirely full.

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That effort will be enhanced with the Enclave development company of Fargo offering six commercial building sites on the east side of the property closer to University Drive. Ideas for those sites include a restaurant, coffee shop and a grocery store among retail stores. Kmart occupied most of the space for almost 60 years after being built in 1962.

Not only did city commissioners on a 4-1 vote approve a Tax Increment Financing and renewal plan package to help demolish the massive store that has been vacant for two years, but there's also been a major development on the affordable housing side.

Beyond Shelter CEO Dan Madler said something happened that doesn't occur often: The North Dakota Housing Finance Agency approved federal low-income tax credits that will help support the building of the affordable housing in one phase instead of two.

Originally, it was thought the housing would have to be built in two phases, stretching the completion of the project two years or longer. Because two projects were approved with 43 units for low income seniors over 55 and another 45 units for those over 62, the work can be done all at once.

The credits will allow for financing of about $20.5 million to construct the housing.

Madler said the Kmart building is expected to be demolished by next summer with work starting on the units this coming fall and hopefully completed by fall of 2023.

"That was huge," Madler said about securing the funding for both phases. It should also save on construction costs because it can all be done at once, he said.

Enclave will receive up to $1.4 million in tax savings during 15 years of the tax plan to remove the building and provide some of the needed infrastructure on the site.

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City Strategic Planner Jim Gilmour said a financial analysis by a firm the city uses said the project wouldn't be feasible without the tax incentives and was also needed to help in the affordable housing facet of the project.

Commissioner Tony Gehrig was the lone vote against the renewal plan as he believes many projects would be done by developers without such tax benefits.

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