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Wendy Reuer, Published August 31 2013

Company breathes new life into Fergus Falls' Kirkbride building

FERGUS FALLS, Minn. - The newly formed Historic Kirkbride LLC is expected to bring new life to the former Regional Treatment Center here, along with a little celebrity.

Historic Kirkbride recently signed a letter of intent with the city of Fergus Falls to renovate the 500,000-square-foot facility commonly called “The Kirkbride.”

The $41.4 million project will transform the property into a hotel with a pool and spa, market-rate apartments, and four or five restaurants.

While the Historic Kirkbride group is its own entity, it operates under the umbrella of Georgia-based Historic Properties.

“Each project has its own stand-alone group,” said Historic Properties CEO Ray Willey.

Historic Properties is a national real estate development company that has breathed new life into more than 50 failing properties.

In addition to having an advisory board of developers and real estate experts, Historic Properties uses what it calls a Reference Council made up of well-known people with an interest in restoring and preserving historic buildings.

Among those on the Reference Council are Alan Dershowitz, a Harvard law professor; Norman Koonce, former CEO of the American Institute of Architects; celebrities Pat Boone, Mickey Gilley, Jamie Farr and Shannon Doherty; and former NFL star Rosey Grier.

While Willey said he could not yet say which household names will be players in the Historic Kirkbride group, he said they will be involved.

“Some of them are involved in a tangential way; some will be partners in this deal,” Willey said.

Historic Kirkbride’s plan would include 60 market-rate apartments on the west side of the Kirkbride, a 120-room hotel to the east and restaurants that could include a barbecue place, a family pizzeria with an entertainment component, a sports bar likely backed by one or more of the group’s athletes, and a coffee and bagel place.

A culinary school or the availability of culinary internships is also being considered inside the restaurants, Willey said.

Local supporters

National celebrities and historic building supporters are not the only groups Willey will be working with to finalize the plan for the Kirkbride.

Campus Development Group, a company headed by Fargo developer Jeff Schlossman, purchased five buildings on the perimeter of the former treatment center property in March 2011. They included the nurses’ cottage and some assorted brick buildings.

Schlossman said he plans to develop 100,000 square feet of the property, beginning with turning “Building 6” into 10 to 15 apartments.

“After that, it could be apartments or assisted living or a hotel,” Schlossman said. “We look forward to developing 100,000 square feet. It’s a beautiful property, a beautiful setting.”

Historic Kirkbride representatives and Schlossman plan to meet soon to discuss how their respective development plans can complement each other.

In order to fully include the local components of a development plan, Willey enlisted the input of Friends of Kirkbride, a local group headed by Gene and Maxine Schmidt.

The Schmidts and Friends of the Kirkbride have long lobbied to preserve the building from demolition, even starting up what have become popular tours of the empty facility.

The city of Fergus Falls purchased the Regional Treatment Center in 2007, but faced a 2013 deadline to find a purpose for the building or demolish it. Otherwise, it would risk losing nearly $5 million in state funds.

Maxine Schmidt said her group is optimistic Historic Kirkbride will successfully renovate their beloved building.

Nearly every project Historic Properties has undertaken has been supported locally, but Willey said few other groups have been as organized as the Friends of Kirkbride.

“I think they’re doing a terrific job,” Willey said. “We expressed our desire to work with them. At the end of the day, the goals we have are the same in terms of saving the building and finding the best use of the space.”

Fergus Falls City Administrator Mark Sievert said it looks as though the Kirkbride’s future may finally be certain.

Historic Kirkbride and the city are still hammering out a developer’s agreement that will detail the final plans. It is hoped an agreement can be signed by October, with a final purchase agreement to follow.

Construction could begin as early as spring 2014 and be completed by 2015, Sievert said.

“We’ve got the real deal,” he said.

Rough cost estimates

City, state and federal historic renovation tax credits, U.S. Housing and Urban Development loans, bond funds and private equity will be used to pay for the $41.4 million renovation price tag, according to a letter of intent signed by Historic Kirkbride and the city.

Upgrading the exterior is estimated to cost $4 million. Interior structure costs such as installing sprinklers and elevators, and upgrading common areas is expected to cost $2.7 million.

Architect, legal and contractor fees are estimated at $3.1 million. The hotel will cost the most with a price tag of $16.5 million, while the restaurants would cost $7 million and the fitness center about $800,000. Historic Properties said the numbers are rough estimates.

Willey has said the renovated property could add 190 jobs to Fergus Falls, a city of about 13,000.

He said the size of the city and location was not a detracting factor for his group.

“We consider the community at large, the entire Otter Tail County community,” Willey said. “We feel in that area of the state we should be able to draw on that county very well.”

Tours of the empty facility are booked into November.

“Everyone wants to see it now because they know it is going to change,” Maxine Schmidt said.

Readers can reach Forum reporter Wendy Reuer at (701) 241-5530