New building with apartments, retail space planned in downtown Fargo

The $13.5 million Dillard project is scheduled to break ground in October and be completed in spring 2019, Deb Wendel-Daub, a Kilbourne project manager, said Wednesday, Aug. 23.

The construction site is now a parking lot owned by the Dillard family but had once been home to row houses and a lumberyard, according to Kilbourne. Like many parking lots, it's not appealing to pedestrians and the new building is intended to change that.

The Renaissance Zone Authority on Wednesday recommended tax exemptions for the project worth $967,000 over five years. After the incentives expire, Kilbourne estimates it would pay $202,000 a year in property taxes. The parking lot now pays $2,400 a year. Because the area is also part of a tax-increment financing district paying for a city-owned parking ramp that the developer finished in June, the taxes would go towards the ramp.

Plans call for a 94,000-square-foot, six-story building with 84 apartment units and 13,000 square feet of ground-level retail space. Conceptually, it will be a lot like Roberts Commons with studio and one-bedroom units and retail space facing an alley.

But, unlike Roberts Commons, which faces the publicly owned Roberts Alley, the Dillard project will also face a privately-owned alley south of the neighboring Herald Square building, according to Wendel-Daub. That allows Kilbourne to add features such as canopies or landscaping.

The mix of market-rate apartments include 24 alcove units, a kind of studio with a small sleeping space that can be blocked off by a sliding door; 39 one-bedroom units; 16 two-bedroom units; and five three-bedroom units.

Wendel-Daub said Kilbourne did consider providing affordable housing but the cost of the land and of cleaning contaminated soil made that unfeasible. She said the cost of rents are still under discussion.

Of the retail space, 8,000 square feet will face Roberts Street and could be divided into four separate stores, she said. The remaining 5,000 square feet will face the alleys and could be divided into three stores, she said.

Kilbourne already has interest from two potential tenants, one facing Roberts and one facing an alley, she said.

The Dillard project is actually one phase of a larger project Kilbourne announced in January 2016, when it entered a city competition to develop two city-owned parking lots to the south.

One of those lots now include the adjacent 455-stall parking ramp and the Roberts Commons building under construction around the ramp. The second city lot to the south across Second Avenue North would also be developed into the Kessler Block mixed-use building.

Kilbourne spokeswoman Adrienne Olson said the Kessler Block, which originally was scheduled for construction before the Dillard project, won't be built for a few years because it's needed as a staging area for work on Roberts Commons and the adjacent Black Building, which Kilbourne also owns.