Council agrees on RTC developerPublished 10:55am Thursday, June 13, 2013
The Regional Treatment Center is on its way to being redeveloped and saved from demolition.
The Fergus Falls City Council passed a resolution during a special meeting Wednesday to enter into a letter of intent to work with Historic Kirkbride, LLC and work toward the negotiation of a development agreement for the RTC.
“Today should be seen as a victory for Fergus Falls,” Council Member Jay Cichosz said. “It’s the best choice for getting this thing redeveloped.”
Following a coin toss by Mayor Hal Leland to see who would go first, the council heard two separate proposals from interested developers Terrence Scholz, of Colonnade Design Group from the Twin Cities, and Ray Willey, of Historic Properties, and Historic Kirkbride, LLC, a development group specifically formed for the restoration and renovation of the RTC.
After more than two hours of discussions, proposals, public comment and questions, the council chose Historic Kirkbride’s plan for a hotel, restaurants and a spa.
“It’s clear tonight… we have a developer that’s ready to go,” Council Member Ben Schierer said. “I think this is a positive.”
The plan would cost an estimated $41,400,000 and include about 120 hotel rooms, a variety of new restaurants and 60 market-rate apartments.
Willey first presented his ideas to the council May 6, but with one vital piece missing: The hotel. He didn’t have a hotel operator secured at that time. He also planned to apply for affordable housing tax credits which was a make-it-or-break-it component for the company to pursue the RTC project.
However, with hotel developer Charles Noh now on board, Historic Kirkbride eliminated the dependency on the tax credits.
“We’ve conquered that hotel piece,” Willey said. “We do not have to make that application for affordable housing. We can come in and proceed immediately.”
The two development groups had discussed working together, but they couldn’t come to an agreement. Scholz, who was “obviously disappointed” after the meeting, said it went from the duo being co-developers “to (Historic Kirkbride) becoming the dominant owner.”
“It went from being equals to being master and slave,” Scholz said. “The offers were always very one sided in our opinion. It just wasn’t going to be something that was going to work for us.”
The offers from Willey included incorporating the Scholz spa idea into the hotel, and Willey said during the meeting that the offer still stands.
Scholz presented The Spa At Kirkbride, a luxury hotel, spa and medical facility, to the council. While council member Tim Rundquist said he liked the creativity of the idea, the plan lacked specifics regarding financing.
Five people from the audience spoke, and most asked the council to hold off on any action.
“Let’s not make a quick decision tonight,” said Maxine Schmidt, of Friends of the Kirkbride. “You do not need to. Please do not rush into it.”
The council discussed the potential development deal for about 30 minutes during a closed session.
The resolution passed by a 6-0 vote, with council members Anthony Hicks and Randy Synstelien absent from the meeting.
With a “suggested timeframe,” Historic Kirkbride and the city will work on a development agreement over the next few months, renovations would start next summer, with a grand opening in December 2015, at the earliest.