Developers outline competing finance plans as Fargo commission readies partner choice
May 22, 2026 | Fargo , Cass County, North Dakota
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Shirley Hughes, representing Visit Fargo Moorhead, opened the briefing by reminding commissioners that Fargo voters approved a lodging tax in November 2024 to fund a convention center and cited a study estimating nearly $30 million in direct visitor spending in the project’s first year.
City Attorney Ian McLean then summarized 80 pages of due-diligence responses the city received from the two finalist teams and framed five priority questions for the commission: who bears cost overruns, who covers lodging-tax shortfalls, who covers operating losses, how firm are hotel commitments, and what tax or TIF incentives are being requested.
The two finalist teams described different risk and financing structures. The Brujala/Bridal team proposed a larger, new-construction facility and said its construction partner would provide a guaranteed maximum price (GMP) and that Brujala would guarantee completion. That team proposed creating a 1st Avenue TIF and removing existing annual lodging-tax allocations (about $250,000 for capital repairs and $350,000 used as an operating subsidy) to support a roughly $58.5 million project budget; Brujala representatives said they would guarantee shortfalls in early years while the TIF and future profits would repay any advances.
A Brujala representative said, “The TIF district we’re proposing is not an incentive — $0 of that goes to us as developers. In fact, we’re gifting the land and paying property taxes on day one,” and added they were willing to cover early operating losses to deliver a larger, regionally competitive building.
The downtown/Kilborn Group proposal would build on the existing Civic Center site and estimated a $45.3 million project budget. That team said it would not guarantee lodging-tax shortfalls; instead it proposed that roughly $43 million of a $45.3 million bond be used for construction and $2 million be placed in a city-controlled convention reserve fund to stabilize operations during the building’s initial years. Mike Allmendinger of Kilborn described the reserve as “an emergency fund… controlled by the city” intended to reduce the chance that the city’s general fund would be tapped for operating deficits.
Ian McLean told commissioners both finalists proposed a GMP from their builders (Mortenson for the Brujala plan; McGough for downtown) and that exceptions would generally be limited to city-directed scope changes or unknown site conditions (for example, potential asbestos at the downtown site). He also said both developers produced lender or brand-interest letters for an on-site Marriott; Brujala said it asked for no hotel incentives while downtown requested a five-year renaissance-zone exemption for its hotel partner.
On operating losses, McLean said Brujala offered a backstop for operating deficits (linked to a minimum 10-year operating agreement) with the TIF as an initial mechanism to cover shortfalls, while the downtown plan projected larger initial losses that would be addressed through the proposed $2 million reserve and a Venue Works limited guarantee capped at 35% of commissions in years when the budget missed targets. Venue Works’ representative explained their refund guarantee is tied to commission-based fees and said the 35% cap is a supplemental protective measure rather than a full subsidy.
Commissioners asked for outside expert review before making a direction decision. Multiple commissioners and the finance director urged the city to retain or engage a specialist — staff and commissioners planned a call with municipal advisory firm Baker Tilly to scope the next-level financial analysis. Finance director Susan said, “My biggest concern is future impacts to the general fund” and asked for scenario planning on interest-rate sensitivity, operating-deficit contingencies and alternative plans if TIFs or incentives are not approved.
City staff and legal advisors also clarified urban-renewal/TIF mechanics under North Dakota law and reminded commissioners that a TIF district’s boundaries and duration carry statutory limits and likely require coordination with county and school authorities.
No motion or formal decision was taken at the Brown Bag briefing; staff said the commission will have an agenda item Tuesday asking for direction on whether to pursue one or both proposals into the next stage of due diligence. Staff signaled Baker Tilly’s full review likely will not be ready by that Tuesday meeting, and commissioners discussed whether to delay final direction until the analysis arrives.
What’s next: the commission is scheduled to consider direction to staff on one or both finalist teams at its next meeting; staff will return with whatever preliminary scope and timing details emerge from the Baker Tilly call and from follow-up questions requested by commissioners.
City Attorney Ian McLean then summarized 80 pages of due-diligence responses the city received from the two finalist teams and framed five priority questions for the commission: who bears cost overruns, who covers lodging-tax shortfalls, who covers operating losses, how firm are hotel commitments, and what tax or TIF incentives are being requested.
The two finalist teams described different risk and financing structures. The Brujala/Bridal team proposed a larger, new-construction facility and said its construction partner would provide a guaranteed maximum price (GMP) and that Brujala would guarantee completion. That team proposed creating a 1st Avenue TIF and removing existing annual lodging-tax allocations (about $250,000 for capital repairs and $350,000 used as an operating subsidy) to support a roughly $58.5 million project budget; Brujala representatives said they would guarantee shortfalls in early years while the TIF and future profits would repay any advances.
A Brujala representative said, “The TIF district we’re proposing is not an incentive — $0 of that goes to us as developers. In fact, we’re gifting the land and paying property taxes on day one,” and added they were willing to cover early operating losses to deliver a larger, regionally competitive building.
The downtown/Kilborn Group proposal would build on the existing Civic Center site and estimated a $45.3 million project budget. That team said it would not guarantee lodging-tax shortfalls; instead it proposed that roughly $43 million of a $45.3 million bond be used for construction and $2 million be placed in a city-controlled convention reserve fund to stabilize operations during the building’s initial years. Mike Allmendinger of Kilborn described the reserve as “an emergency fund… controlled by the city” intended to reduce the chance that the city’s general fund would be tapped for operating deficits.
Ian McLean told commissioners both finalists proposed a GMP from their builders (Mortenson for the Brujala plan; McGough for downtown) and that exceptions would generally be limited to city-directed scope changes or unknown site conditions (for example, potential asbestos at the downtown site). He also said both developers produced lender or brand-interest letters for an on-site Marriott; Brujala said it asked for no hotel incentives while downtown requested a five-year renaissance-zone exemption for its hotel partner.
On operating losses, McLean said Brujala offered a backstop for operating deficits (linked to a minimum 10-year operating agreement) with the TIF as an initial mechanism to cover shortfalls, while the downtown plan projected larger initial losses that would be addressed through the proposed $2 million reserve and a Venue Works limited guarantee capped at 35% of commissions in years when the budget missed targets. Venue Works’ representative explained their refund guarantee is tied to commission-based fees and said the 35% cap is a supplemental protective measure rather than a full subsidy.
Commissioners asked for outside expert review before making a direction decision. Multiple commissioners and the finance director urged the city to retain or engage a specialist — staff and commissioners planned a call with municipal advisory firm Baker Tilly to scope the next-level financial analysis. Finance director Susan said, “My biggest concern is future impacts to the general fund” and asked for scenario planning on interest-rate sensitivity, operating-deficit contingencies and alternative plans if TIFs or incentives are not approved.
City staff and legal advisors also clarified urban-renewal/TIF mechanics under North Dakota law and reminded commissioners that a TIF district’s boundaries and duration carry statutory limits and likely require coordination with county and school authorities.
No motion or formal decision was taken at the Brown Bag briefing; staff said the commission will have an agenda item Tuesday asking for direction on whether to pursue one or both proposals into the next stage of due diligence. Staff signaled Baker Tilly’s full review likely will not be ready by that Tuesday meeting, and commissioners discussed whether to delay final direction until the analysis arrives.
What’s next: the commission is scheduled to consider direction to staff on one or both finalist teams at its next meeting; staff will return with whatever preliminary scope and timing details emerge from the Baker Tilly call and from follow-up questions requested by commissioners.
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