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Kilbourne Group buys historic Black Building in downtown Fargo

Kilbourne Group buys historic Black Building in downtown Fargo

The Black Building sits on Broadway Tuesday, Sept. 9, 2015, in Fargo. Michael Vosburg / Forum Photo Editor

Doug Burgum’s Kilbourne Group disclosed Friday that it reached a deal to purchase the iconic Black Building on Broadway, a landmark that adds to the firm;s growing list of historic downtown buildings.

From May: Burgum snaps up new downtown property portfolio

“We are honored to assume stewardship of this significant Fargo landmark,” Burgum said in a statement. “We are excited about the future of this incredible structure, and we look forward to receiving input and inspiration from tenants and the community regarding the Black Building’s next chapter.”

Kilbourne Group is also buying the three-level building just south of the Black Building as well as a parking lot at 217 Roberts St.

Related: $14 million Kilbourne Group project gets big incentives

Lloyd Sampson, who along with Dan Sampson and Todd Nedberg is selling to Kilbourne Group, said in a statement, “Since DTL Properties’s purchase of the Black Building in September 1993, we have been mindful of its place in the history of the city of Fargo. We are appreciative of the many long-tenured tenants who have remained committed to this important downtown property.”

Kilbourne Group said it “will honor all existing leases with current tenants.”

The Black Building is Kilbourne Group’s most recent downtown purchase. In May, Kilbourne acquired a slate of properties once owned by Feder Realty Co., including several locations on Broadway. The terms of the transaction were not disclosed, but the buildings had an appraised value of $8.8 million.

Kilbourne has acquired many historic downtown properties for renovation, including the Loretta Building, 210 Broadway, which holds its offices.

The Black Building, which long reigned as Fargo’s tallest building, has been a tower of commerce jutting from downtown Fargo for almost 85 years.

It housed Sears Roebuck starting in 1931, becoming the anchor tenant not long after the cornerstone was laid on Nov. 17, 1930. The building, in fact, was built after Sears expressed interest in a downtown location.

More Kilbourne Group coverage

The building took its name from George M. Black, a merchant who moved to Fargo in 1912 and leased the space at 112 Broadway, where he opened a store. Within a few years, he acquired adjacent properties at 110 and 114 Broadway.

The Black Building once was featured in Ripley’s “Believe it or Not” because it was white, not black.

The Black Building lobby is seen Tuesday, April 1, 2014, in Fargo, N.D. Michael Vosburg / Forum Photo Editor

The Black Building lobby is seen Tuesday, April 1, 2014, in Fargo, N.D. Michael Vosburg / Forum Photo Editor

The top floor once housed WDAY, which by agreement required broadcasters to announce, “This is WDAY in the Black Building, Fargo,” when signing on. During her early career, Peggy Lee sang on WDAY radio broadcasts from a studio in the Black Building.

In recent years, the Black Building’s former grandeur has faded and the building and its owners have encountered turbulence and controversy. Its position as a prime retail location suffered after West Acres Regional Shopping Center opened in 1972, including a relocated Sears store.

William A. Schlossman, the developer of West Acres, was a longtime partner and the son-in-law of George Black.

George M. Black Co. sold the Black Building in 1986 to Jordahl & Associates of Moorhead. Two years later, Jordahl & Associates failed to pay taxes, and regulators declared the bond issue in default in 1990.

A Florida securities dealer sued after the default, claiming fraud and misrepresentation in the sale of the bonds.

The Black Building last changed hands in 1993, when a judge sanctioned the sale just 11 days before a $2.75 million bond issue to renovate the building would have gone into forfeiture. It was North Dakota’s largest municipal bond failure, according to the North Dakota State University Archives.

The interior of the Black Building is seen Tuesday, April 1, 2014, in Fargo, N.D. Michael Vosburg / Forum Photo Editor

The interior of the Black Building is seen Tuesday, April 1, 2014, in Fargo, N.D. Michael Vosburg / Forum Photo Editor

LTD Inc., a group of Grand Forks investors, Lloyd Sampson, Dan Sampson and Todd Nedberg, bought the distressed property by assuming back taxes and assessments for about $700,000, including a $50,000 payment to be distributed among bondholders, according to Forum archives.Valued at $3.3 million in 1986, the Black Building’s appraised market value had plunged by 1992 to $375,000 because of the discovery of asbestos and other environmental concerns, which the LTD owners later said were addressed.

In 1994, the Black Building’s owners agreed to pay more than $200,000 in delinquent taxes after Cass County sued to collect back taxes.

In recent years, the Black Building has served as a venue for specialty retailers, including art galleries and clothing shops, with a restaurant among the tenants in the lower level. The upper floors hold leased office space.

Last year, the city threatened to sue the DTL owners to take care of an unreliable boiler, but the upgrade was made before legal action was taken. City inspectors said an improperly installed boiler could allow dangerous levels of carbon monoxide to accumulate.

DTL Properties, which includes brothers Lloyd and Dan Sampson, had faced a possible fine of up to $81,000 before addressing the problem.

Kilbourne Group said its purchase is expected to close early next year, when the group will take over the building’s operations.

Tenants are invited to a question and answer session at 10 a.m. Sept. 18 at the Fargo Theatre.

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