Dave Olson, Published February 13 2014
$9 million project aims to revitalize vacant Union Storage and Transfer complex
The application for Renaissance Zone property tax breaks will now go to the City Commission, along with a request from the developers, NP Avenue LLC, for other property tax breaks tied to payments in lieu of taxes, or PILOT incentives.
Developers are also pursuing state and federal income tax credits based on the historical significance of the complex, which is on the National Register of Historic Places.
Jessica Barner Alsop, who is developing the property with business partner John Williams, told Renaissance Zone Authority members the target market for apartments will be individuals and couples who want to live downtown.
The plan involves two buildings.
The Union Storage site, called the west building, has a basement, three upper floors and about 34,000 square feet of space.
The east building, the former Armour Creamery, has a basement, four upper floors and about 45,000 square feet of space.
Alsop said the west building will be retrofitted to accommodate retail and commercial space, while the east building could house 40 or more apartments and 22 underground parking spaces.
Apartments could include 26 one-bedroom, 10 two-bedroom and four three-bedroom units, according to information contained in the Renaissance Zone application.
Alsop said they are still determining what rents will be, depending on how many apartment units are built, but she told board members rent prices may range from about $745 to $1,300 a month.
The rehabilitation work will be mindful of the historic nature of the buildings, which were constructed around 1930, Alsop said.
“We’re trying to do everything we can to preserve how the buildings originally looked,” she said.
According to a story that ran in The Forum in December 1929, plans at the time called for building a large commercial cold storage plant and a large creamery at 1026 NP Ave.
The 1929 story said the two buildings could cost $75,000, with equipment and other features bringing the total to about $200,000.
At the time, the structure was said to be the first cold storage plant in the Dakotas.
Information submitted to the city shows NP Avenue LLC estimates its total project cost could be about $9 million.
Here’s a breakdown:
E Purchase of building and land, $400,000.
E Asbestos abatement and demolition, $600,000.
E New windows and masonry, $75,000.
E Exterior improvements, windows, roof, masonry repairs, $2.9 million.
E Interior fit-up and major systems, $3 million.
E Parking, $500,000.
E Architect/engineering, $800,000.
E Financing and other soft costs, $700,000.
Renaissance Zone Authority members applauded the project and the risk the developers were taking, stating the work promised to spur additional improvements downtown.
“We are pulling for you,” said Brad Wimmer, who is also a city commissioner.
The Union Storage and Transfer complex, which has been empty for years, sits next to railroad tracks, but Alsop said noise and vibration shouldn’t be a problem.
“We cannot hear a train when we’re in there, it’s so solid,” she said.
City officials say the tax breaks being sought include:
E A five-year Renaissance Zone property tax exemption on the building value only, with estimated tax savings of $631,780.
E A five-year state income tax exemption on investment revenue derived from the project, estimated value minimal
E A subsequent 10-year PILOT property tax break that is expected to amount to $631,780 during years 6-10, and $473,835 for years 11-15.
Developers are also seeking a historic property preservation tax credit from the state that could total $250,000 and a historic rehabilitation tax credit from the federal government equal to 20 percent of the value of the project.
Plans call for construction to start in 2014.
Readers can reach Forum reporter Dave Olson at (701) 241-5555