REDEVELOPMENT: Back from the brinkFergus Falls approves redevelopment plan for historic Kirkbride complex
By: Kris Bevill, Prairie Business Magazine
Ray Willey was flipping through a National Trust for Historic Preservation magazine one day about a year ago when his attention was immediately captured by a photo of a “beautiful, structure —like a Lichtenstein castle." The photo was included in a section that listed historic buildings in danger of being demolished. “I thought, ‘There’s got to be a way to do something,’” he says. “I couldn’t believe that this could be a candidate for being torn down.”
The building in the photo was the historic Kirkbride building in Fergus Falls, Minn. Built in the late 1800s, the massive complex — sprawling across more than 600,000 square feet — has been listed on the Federal Register of Historic Places since 1986. Originally one of three state insane asylums, it had been used most recently as a mental health treatment facility, operating as the Fergus Falls Regional Treatment Center until the state closed the facility and sold the property to the city in 2007. The city had since been trying to attract developers to the property, offering incentives including a state redevelopment grant that could help ease the financial burden of redeveloping the historic property, but no takers had been found and the city was facing a looming grant deadline and no other options besides demolishing the complex.
But, as fate would have it, Willey is CEO of Georgia-based Historic Properties Inc., a company with 30 years of experience redeveloping historic properties around the country. Spurred by Willey’s desire to save the Kirkbride, the company evaluated the property and determined that not only was the Kirkbride structurally sound, it had potential for rental income and offered favorable financial incentives. The firm submitted a redevelopment proposal, and received unanimous approval from the city council earlier this year.
The estimated $41.4 million project, designed by Fargo-based Mutchler Bartram Architects, is slated to include a 60-unit apartment complex, a 120-room boutique hotel complete with conference and lounge space as well as indoor/outdoor pool and spa amenities, a health club for hotel guests and tenants, an 83,000-square-foot eatery section and office space for property managers and employees. It is the largest project ever undertaken by Historic Properties and is its first Minnesota property. The company formed a stand-alone subsidiary, Historic Kirkbride LLC, to carry out the project and has brought in Charles Noh, co-chairman of California-based hotel management firm Bernard Hotels International, as a principal partner for the hotel portion of the project, which accounts for about half of the complex’s square footage.
The optimistic timeline for completion has city work beginning this fall, followed by renovations beginning next July and a grand opening occurring by Christmas 2015, but Willey anticipates that the complex financial aspects and sheer size of the Kirkbride will demand a lengthier timeline. The company plans to package together a number of financial mechanisms to fully fund the project, including an EB5 Regional Investment Center loan for up to $23.5 million, several federal and state historic tax credit programs and federal housing and urban development (HUD) funding.
Fergus Falls Mayor Hal Leland says the city council is “absolutely delighted” that the Kirkbride restoration project is finally happening and the city will do “everything humanly possible” to help restore the complex’s position as an economic engine for the community. “We’ll have to provide the infrastructure that is needed and the efforts to preserve the structure and help secure the kind of financing [Historic Kirkbride] needs in order to move this project forward,” he says. “I think we’re prepared very much to stand behind that and make this successful.” PB
Editor, Prairie Business