The following article by The Forum of Fargo-Moorhead.appeared on May 24, 2015 in
FARGO- Doug Burgum’s Kilbourne Group has bought a slate of properties that adds significantly to its portfolio of historic buildings in or near downtown.
The transaction, completed May 1, involved an undisclosed sum, but the 17 parcels of real estate formerly owned by Feder Properties and Feder Realty Co.,including several retail locations on Broadway, have a combined appraised value of $8.8 million, according to city property records.
The Feder companies had owned the properties, in some cases, for more than 60 years, a portfolio that grew in earnest after the family bakery closed due to a fire in 1959.
Both Jerome Feder and Burgum stressed their mutual interest in maintaining and preserving buildings in the city’s core, a shared value that Feder said led him to sell to Kilbourne Group.
“Doug Burgum and the Kilbourne Group team are dedicated to taking downtown buildings to their next level and changing a site to its highest and best use,” Feder said.
“That was the driving force to me,” he added, noting he is the fifth generation of his family to live in Fargo. “I care about downtown Fargo.”
The deal marks a departure for Kilbourne Group, as the Feder properties have been well-maintained and won’t require the significant renovation other acquisitions often have, Burgum said.
“We’re honored,” he said of the deal, which followed discussions that transpired over the course of a year. “The Feder relationship goes back a long way with the Burgums.”
The purchase evolved out of an inquiry Kilbourne Group made regarding one of Feder’s buildings. He responded that he wanted to sell his buildings in a certain order.
Later, Kilbourne Group came back with an offer to buy almost the entire slate of Feder’s Fargo properties.
“He’s done such a great job of maintaining the buildings,” Burgum said, adding that some are historic, and Feder also had a good relationship with his tenants and renters. “These are the best in-shape buildings that Kilbourne has ever acquired. We’re excited to pick up where they left off.”
Few renovations are planned and likely would take place piecemeal over time, Burgum said.
“Our intention is to operate all of them as they’re being operated now,” he said.
Over time, Kilbourne Group might sell former Feder properties that are outside downtown or the city core, since that’s the development firm’s primary focus.
Many of the downtown buildings are mixed use, with retail on the ground level and offices or apartments on the upper floors, an approach Kilbourne Group and many other developers favor to encourage diversity of uses and density.
The properties include several storefronts on the 400 block of Broadway, such as spaces occupied by Artekta, Unglued and C. Lizzy’s.
Cari Luchau, co-owner of C. Lizzy’s, a handmade art and gift gallery, said she expects Kilbourne Group will carry on the tradition established by Feder Properties.
“Jerry was a fantastic property owner,” she said. “He and his family had a history in downtown Fargo. The people who bought his building are creating a new history for downtown Fargo, so we’ve kind of benefited by both.”
The portfolio also includes several apartment buildings in or near downtown, including City Center Apartments, 121 5th St. N., and a small adjacent commercial building at 119 5th St. N. that houses the Main Squeeze smoothie and juice bar.
The Feder acquisitions add to Kilbourne Group’s significant holdings downtown, including the Loretta Building at 210 Broadway that serves as the company’s headquarters, The Lofts on Roberts Street, which includes Mezzaluna, 300 Broadway and 102 Broadway.
Kilbourne also owns yet-to-be developed sites such as the former St. Mark’s Lutheran Church and Woodrow Wilson school.
Including the newly acquired former Feder properties, Kilbourne Group now owns 22 downtown buildings, a figure Burgum said is far from gaining a stranglehold on city core properties.
“From a square footage or property perspective, it’s not a big percentage,” Burgum said.
In terms of surface, parking lots dominate downtown land uses, with 116 acres, a figure that rankles Burgum, who is an advocate of higher-density urban development, spurred by parking ramps that lure retail shops, offices and dwellings.
As of last spring, Kilbourne Group had been the catalyst in $58 million worth of construction in 15 downtown projects.
“The revitalization of downtown in some ways is just beginning,” Burgum said. In his eyes, parking lots and other underdeveloped spaces, many of them former building sites– are a blank slate waiting to be transformed.
“That’s going to be the next chapter,” he said.
At age 66, Feder said he is going to wait to see whether he wants to dive back into real estate.
“I’ve got to catch my breath,” he said. “I’ve got to decide how much I want to retire in the next few years.”
To read the article on The Forum’s website, click here.