Moorhead City Council

Nancy Edmonds Hanson

The redevelopment of downtown Moorhead turned a page at the Moorhead City Council’s final meeting of 2024, when the board unanimously and without discussion approved a $24.6 million buy-out of Roers Development’s interest in the former Center Mall.
On Dec. 9, the council ratified two resolutions to end the city’s pre-development agreement with the Fargo-based development and construction firm. The first closed out the five-year-old pre-development agreement, which assigned Roers responsibility for acting on behalf of the city to redevelop the mall. The second authorized the purchase of mall property acquired by the company since the original agreement was signed on Sept. 23, 2019.
Economic development contractor Derrick LaPoint and program administrator Amy Thorpe have now taken over marketing and management of the redevelopment program, working with local, regional and national developers that have expressed interest in building on the 19-acre site. The first two projects are already taking shape – the new $41.5 million community center and regional library rising at the corner of Fourth Street and Center Avenue, and the $25 million 650 Block commercial and residential buildings on the east edge of the mall site.
Much progress has been made since 2019, when the agreement was worked out by former city manager Christine Volkers and Mayor Johnathan Judd. Replacement of the 50-year-old downtown mall was a central element of the redevelopment laid out after more than a year of public engagement and planning led by Downtown Moorhead, Inc. The partnership between the city and the developer, termed a “bombshell” at the time, charged the company with weighing options to develop the area and gain the greatest return for taxpayers, initially at no cost to the city. It also included the option of involvement in site selection and construction of a new city hall, a suggestion that never took shape. Instead, the city itself is remodeling the existing facility, with completion projected for mid-2026.
The city’s buy-out includes the purchase of mall properties acquired by Roers over the past four years. According to city manager Dan Mahli, the largest portion of the payment, $20.4 million, accounts for real estate acquisitions, relocation and demolition expenses over the past five years.
The development firm negotiated with more than a dozen property owners to acquire the commercial property included in the deal. The Center Mall was set up as condominiums when it was built in 1971; businesses owned the space within which they operated, while the city itself owned and maintained the public areas – the walkways, atrium, restrooms, parking lots and ultimately the ramp, which was built in 1992. While Goldmark Commercial Real Estate investors had acquired more than 70% of the square footage by the time Moorhead struck its deal with Roers, the balance involved often-complicated negotiations with more than a dozen additional entities.
The development firm went on to help some former tenants relocate, most to other sites in Moorhead. Other owners chose to retire. It also demolished the two-story space formerly occupied by the Herberger’s in February 2024, which had stood empty since the department store chain’s closure in 2018.)
Other elements of the final buy-out price include $659,000 for taxes and insurance; $530,000 for professional services, including legal, accounting, architectural and engineering; and the line of credit for carrying costs of operating the mall, $2.9 million. The city also paid a 3% commission for the property as part of the real estate service transaction.
In May, the city established a TIF – a tax increment financing district – to support future projects now in the discussion or planning stages. TIF financing, Mahli explained, enables the city to use taxes ultimately generated by the improved properties to support infrastructure, site preparation and demolition for areas deemed to be blighted. While developers continue to pay the level of property taxes assessed on the original, unimproved real estate, they receive a phased exemption on its improved value, the full amount of tax is due. While the term of TIFs is typically five years, the city is seeking a five-year extension from the 2025 Legislature due to the size and scope of the project, bringing the total period to ten years.
“When we started, the value of the entire area was about $20 million,” Mayor Shelly Carlson told the publication Finance and Commerce last month. “We anticipate that by the time it’s done, it’s going to be upwards of $500 million.”