RTC group wants one more year

Developers say they'll back city for state demolition funding

By Lauren Radomski | The Daily Journal

Published 09:41 p.m., June 15, 2009

Developers of a proposed international business college say they would like until next summer to acquire the Kirkbride property on the Fergus Falls Regional Treatment Center campus.

And if they need more time past July 2010, the partners with Campus Development Group say they will financially ensure the city is not responsible for remaining abatement and demolition costs.

The news came at Monday’s Fergus Falls City Council meeting, where two of the four CDG partners described developers’ effort to turn the RTC into an international business college.

City council members took no action on CDG’s request Monday and will not do so until June 29. Before then, the city’s attorney for RTC redevelopment must OK the extended closing dates with the state and get an updated estimate of demolition costs at the campus.

Doug Burgum, whose Kilbourne Group led the historic restoration of downtown Fargo, said he and the three other CDG partners share the goal of turning a huge liability into an asset. Their mission is to save the RTC property by turning it into something economically viable, and to them, an educational facility is the best option.

So far CDG has poured $424,000 into the project by way of planning, design, travel and other expenses, said Burgum, who was joined Monday by Jeff Schlossman, senior vice president and owner of Fargo-based Goldmark Schlossman Commercial Real Estate Services Inc. The two other CDG partners, Richard Anderson and Lili Pan, are currently in China.

There’s a high interest level among Chinese students to study in the United States, Schlossman said. And parents are willing to pay private tuition rates for a safe campus environment where students can gain a quality education.

According to Schlossman, a dozen universities in Hunan Province have expressed interest in the business school, which would initially enroll about 350 students in several undergraduate programs and one graduate program. The project is complex, Schlossman said, requiring coordination among investors, lenders, Chinese and American schools, and the Fergus Falls community. And as he put it, “Time allows for better planning.”

CDG is asking the city to extend a June 30 closing date on RTC land parcels. As part of an amendment to agreements with the city, CDG would close on Parcels A and B (the former school district buildings and nursing cottages) no later than Nov. 1 of this year. Between now and then, the city would use state dollars to demolish the reservoir and portions of the tunnel system. City staff would also work with developers to plat and rezone the property, with those discussions scheduled to begin as soon as Tuesday.

The Kirkbride, known as Parcel D, would follow a different timeline. According to Dan Bueide, the Fargo attorney representing CDG, the city would demolish three buildings on the northwest side of the property that have no reuse potential. These are old boiler buildings and former laundry facilities, he said. Platting of Parcel D would be done in conjunction with Parcels A and B.

CDG would plan to close on the Kirkbride parcel by July 1, 2010. If at that point developers needed to adapt the project to ongoing feasibility studies, they would have the option of extending the July date to Jan. 1, 2011. They would also provide “acceptable financial assurances” that any remaining abatement and demolition would not exceed the city’s funds from the state.

Burgum said he proposed the financial guarantee as a way to mitigate the city’s risk. He also said he’s doubtful the closing date will get pushed back that far.

Some city council members said they left Monday’s meeting with a clearer vision of the college project and the people behind it.

“It was helpful for me to see it laid out,” said Pat Connelly, 3rd Ward. “My goal today was to be able to walk out with a clearer picture and I have that.”

“It’s such an exciting project,” said JoEllen Thacker, 4th Ward, “but because of its size it’s taking awhile.”

The presentation by developers lasted nearly an hour and brought about a dozen audience members to council chambers.

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