Fergus Falls City Council delays decision on Kirkbride renovation

The Fergus Falls City Council postponed a decision on the fate of the giant former state mental institution building until next week to review new financing information provided by a prospective developer.

Ray Willey, chief executive of Historic Properties Inc. of Norcross, Ga., offered more detailed plans to the eight-member council Monday night for an approximately $42 million renovation of the Regional Treatment Center, known locally as the Kirkbride.

The firm would turn the property into apartments, restaurants, a boutique hotel and a "makers center" for artists and others. Because of its huge size, age and relatively remote location in a small city in northwestern Minnesota, the renovation is a difficult challenge for developers and officials.

Willey asked the city to supply $700,000 for the work, which would come out of a funding pot set aside by the state of Minnesota for Fergus Falls to use on maintenance and upkeep of the four-story, 500,000-square-foot building that was built in the 1890s.

The developer's original proposal, which received preliminary city approval earlier this year, had budgeted $4 million in state funds offered to the city for renovating or demolishing the building. But earlier this month, the council told Willey those funds could only be used when the building was publicly owned.

Willey on Monday came back with details of a proposal in which the project's first phase would be financed with $10 million from the company, $10 million in historic and other tax credits and the $700,000 from the city.

"We are fronting a lot of the money and have spent several hundreds of thousands of our own dollars and time already to get to this point," Willey said in an interview Tuesday. "To me, it is a shared project, it is a shared risk and I think it is a fair request considering the greatest beneficiary will be the community, which it should be, creating new jobs and new businesses."

Michele Anderson, rural director for Springboard for the Arts in Fergus Falls, said community members who support restoration of the building felt relieved at the end of Monday's meeting.

"Overall, we are really happy to have the extra time," Anderson said. "The meeting was tense at the beginning, but at some point it felt like a cloud was lifting and that the City Council was really trying to find a way to work with Willey."

If the council rejects Willey's proposal, it may tap the state's $4 million grant, which expires in 2016, to tear down the structure.

"I guess it comes down to whether or not that building is worth saving to the community for $700,000," Willey said, "And if it's not, then I respect that decision."

Kristen Leigh Painter • 612-673-4767