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Erik Burgess, Published September 28 2013

Could Moorhead's downtown bustle again?

City leaders here have been waiting nearly a decade for its downtown to boom. It’s been about 10 years since the city took a couple of blocks near the river and Main Avenue, tore down blighted – if not popular – buildings and worked with a private developer to erect new condos, apartments and retail space, all with hopes that a wave of development would follow.

It didn’t, and it’s a situation familiar to Moorhead dating back to its “urban renewal” that started 50 years ago, said Mayor Mark Voxland.

“I remember my dad back in the ’50s and ’60s, you know, kind of frustrated, (asking) ‘Why don’t things happen in Moorhead?’ ” Voxland said. “… It seems to have been a perpetual problem for Moorhead.”

But the city has spent the last decade building flood protection, establishing incentives for builders, and cleaning up the downtown corridors to create more space ready to develop.

And now city leaders again think the downtown is primed to explode if a private developer or two can be brought to the table.

Those running for mayor this year have some ideas on how to drive development downtown, and at the top of the list is a strong desire to encourage people to live downtown.

The city’s economic development office will hold a summit from 5:30 to 6:30 p.m. on Tuesday at the Rourke Art Gallery Museum, 521 Main Ave., to discuss ideas for what could be downtown.

It’s not easy to be next door to Fargo, where the downtown has seen a 182 percent increase in total appraised value in the last 14 years, thanks largely to North Dakota’s Renaissance Zone tax-exemption program.

But Moorhead officials are certain their downtown can be vibrant in its own right.

“Fargo has set an example that shows that no matter what you do, the core of the downtown is still a very important part of any city, and I think we’ve neglected it long enough,” said Councilman Mike Hulett, who is running for mayor. “We did a little bit 10 years ago. We gotta do more now.”

Downtown in a ‘lull’

To get to where it is today, Moorhead’s downtown had to endure urban renewal in the 1960s and 1970s. The dramatic redevelopment saw nearly every historic building west of Eighth Street razed in part to set up the Moorhead Center Mall.

Fargo also went through two rounds of urban renewal, but managed to keep many of its historic buildings. Decades later, many of them have been privately redeveloped with the help of North Dakota’s Renaissance Zone tax-exemption program.

Fast forward to the early 2000s, when Moorhead tried another downtown renewal, albeit much smaller in scale.

The city bought out three corners of downtown Main Avenue and Fourth Street. Kirby’s and Ralph’s bars, two big draws for metro-area college students, were vacated and replaced with 138 residential units, 275 parking spots and 40,000 square feet of commercial space.

The project was headed by Kevin Bartram and the Fargo-based Sterling Development Group. But what the city hoped would be a major catalyst for downtown growth ended up being the only major development there in the last 10 years.

“I actually thought our (project) would create a little bit more momentum because it started in 2004 and we probably didn’t finish the last phase until 2010, so it was a little bit going on every year,” Bartram said. “But now there seems to be a little bit of a lull.”

City leaders blame numerous factors for that “lull.” Foremost, they point to the national economic crisis of 2008. Money got tight and investment stopped, at least in Moorhead, Voxland said.

“I think the explosion of downtown Fargo after (the 2008 recession) really shifted the focus to Fargo, and we haven’t seen the investments like we hoped in Moorhead,” he said. “We just haven’t been able to pick up the pace since then.”

In some small part, there’s been a lack of interest from downtown property owners to redevelop or add onto existing space, said City Manager Michael Redlinger.

The city was also distracted by “just pure exhaustion” during the flooding years of 2009, 2010 and 2011, said Councilman Mark Hintermeyer, who is also running for mayor.

The city looked away from downtown development after the record flood of 2009 to focus on flood mitigation, Redlinger said. The city has spent nearly $100 million on flood control projects since then, and that work is nearly completed.

“Now we can pivot and return some focus and return some attention back to the downtown,” Redlinger said.

At least one major project that had the city’s hopes high – an $8 million mixed-use complex at the old Aggregate Industries site on First Avenue North – has been stalled.

Minneapolis firm Hyde Development applied for a roughly $1 million state cleanup grant, but was only offered $500,000, Redlinger said. The city still hopes to push that project ahead, but say more voices are need at the table.

“We need to find developers who are willing to take a shot at downtown Moorhead,” Hulett said.

Issues with Moorhead

There are inherent problems in downtown Moorhead – and in Minnesota in general – that make developing there difficult, area real estate agents say.

“We have a tough time getting people to move from North Dakota to Minnesota, probably as much for tax reasons and those types of things as anything,” said Scott Hildre, a commercial real estate agent for Coldwell Banker.

Some of the problem stems back to Urban Renewal, said former City Councilman John Rowell, who was a big proponent of the Bartram project.

With few historic buildings left in downtown Moorhead, Rowell said developers such as the Kilbourne Group that like to restore old buildings don’t have much reason to cross the river.

“What is there to work with that’s exciting? Well, there’s not a lot,” Rowell said.

Bartram said one big reason his company considered doing the Fourth and Main project was because the city was able to clean the land and offer them a sizeable parcel. But other land in downtown Moorhead is a challenge for developers because of the convergence of the two railroad tracks, he said.

“There’s very little buildable area from the street to the railroad tracks and the land that the railroad owns,” Bartram said. “You end up with very narrow pieces of land, sometimes not big enough for parking even, much less building and parking.”

Bartram said the Renaissance Zone in North Dakota – which offers five years of 100 percent property tax exemption – is simpler than the tax-increment finance district in Moorhead’s downtown, which works as a rebate system.

“You pay your taxes and then, a few months later, you get part of the money back and you never know exactly what the number is,” Bartram said. “It’s a little more cumbersome. It probably nets out to the same (as the Renaissance Zone), but it’s just harder to get there.”

Moorhead leaders say they have done a lot in the last 10 years to make downtown attractive to developers. They expanded the TIF zone, installed a railroad quiet zone, and cleaned up First Avenue North by removing overhead power lines and widening and rebuilding the road.

The Minnesota Department of Transportation finished a major project on Main Avenue this year, replacing street lights and smoothing out what was a crumbling corridor. Moorhead will continue to work with MnDOT over the next two years to improve Main and Center avenues thanks to a recently awarded $3.4 million state grant.

“The table is set,” Redlinger said. “The question is now, in the private market, who wants to continue to work on the vision?”

Councilman Hintermeyer agreed that the city has done a lot to encourage development, but said it’s been “frustratingly slow.”

As one possible reason, he pointed to the restaurant disparity between the two states. It’s 20 to 30 percent cheaper to run a restaurant in North Dakota than in Minnesota, Hintermeyer said.

“Economic development, restaurants, those are huge issues for the residents of Moorhead,” he said, noting that he’s door-knocked on 4,000 homes so far this year. “And they’re my issues as well.”

Earlier this year, the state legislators representing the Moorhead area said they were prioritizing the city’s flood control and didn’t want to distract the Legislature with other issues, but Hintermeyer and Hulett believe the state will also have time to work on expanding the Border Cities program perhaps to include a restaurant disparity credit.

Del Rae Williams, a candidate for mayor, thinks the city first needs to encourage more community or joint college activities downtown, which will eventually help spur interest in development.

Although the city considers its downtown to be everything west of Eighth Street on Main, Center and First avenues, Williams said you’d be hard-pressed to find it right now.

“We don’t really have a downtown that people would feel like ‘This is our downtown,’” she said. “They express that to me when I door-knock.”

The citizens of Moorhead also need to more clearly define what they want the downtown to be, Williams said.

Redlinger hopes that conversation can move forward at the Tuesday meeting at the Rourke.

The fourth mayoral hopeful, Kevin Shores, did not respond to requests for comment from The Forum.

‘Got to be aggressive’

City leaders hope Moorhead’s downtown can one day “compliment” Fargo’s. They want mix-used buildings on Main and Center avenues, with retail below and housing above.

To get the ball rolling, the city needs more people living downtown, especially college students, Redlinger said.

Hulett has a plan to redevelop Center Avenue, which he is calling “Return to Center.” He said it’s comparable to the idea of the Fargo Renaissance Zone, and it includes a desire to attract college kids and young professionals into the downtown core.

“We don’t have to go to the Legislature and say, ‘Hey, send us 15,000 college students with cash in their pocket who would like to congregate somewhere and do things in their off hours,’” Hulett said. “They’re there. They’re blocks away.”

Voxland feels that as a government, the city has “gone as far as we can go,” other than actually building the buildings.

So downtown is ready – again – for a boom, but the city says this time has to be different.

“If not now, then when? Do we lose another decade?” Hintermeyer asked.

“We’ve just got to be aggressive. And I think we’ve set the table, but we’ve still got to bring that private developer to the table.”

Readers can reach Forum reporter Erik Burgess at (701) 241-5518