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Metro Sports Foundation received $8.5 million from Engelstad foundation

The Metro Sports Foundation, which runs Scheels Arena, has received cash infusions of at least $8.5 million from the charitable foundation created by the family of Ralph Engelstad. Forum News Service file photo

FARGO — The Metro Sports Foundation, which runs Scheels Arena, has received cash infusions of at least $8.5 million over several years from the charitable foundation created by the family of multi-millionaire Ralph Engelstad.

MSF received $5.5 million from the Engelstad Family Foundation in 2015, and $1 million in calendar years 2012, 2013 and 2014, according to documents filed with the Internal Revenue Service.

Coincidentally, an $8.5 million donation from an anonymous donor was cited as one of the keys to a 2012 debt restructuring plan for the southwest Fargo hockey arena and events center. However, to date, no one has stepped forward to say whether the $8.5 million from the Engelstad Family Foundation was used to stabilize the Scheels Center's finances.

IRS forms for the Engelstad Family Foundation going back to 2008 and show no earlier donations to the MSF.

Inquiries were also made to the Engelstad Family Foundation as to whether other donations had been made to the MSF.

However, a representative of The Firm Public Relations and Marketing said Thursday, June 21, that no one was available who was authorized to answer such questions. The man said Engelstad Family Foundation spokeswoman, Kris Engelstad McGarry, was on vacation through mid-July and couldn't be reached for comment.

Dan Fremling, an MSF board member, said Thursday he doesn't remember any large gifts from the Engelstad Family Foundation in 2017 or so far this year.

"We always reach out, but we're not always successful," Fremling said.

Attempts were also made to reach Scheels Arena General Manager Jon Kram and Ace Brandt, president and CEO of Brandt Holdings, to learn if any other funds had been received from the Engelstad foundation, and to ask for what the family foundation gifts were used.

Scheels Arena falls under the entertainment branch of Brandt Holdings, as does the Fargo Force hockey team.

Scheels Arena, originally called the Urban Plains Center, was built as a single-ice-sheet facility for $25 million and opened in the fall of 2008. It was renamed Scheels Arena in fall 2010.

In fall 2012, the operators of the arena finalized a deal to slash the facility's debt load by more than two-thirds.

The agreement, struck between a consortium of more than a dozen banks and other backers, cut the arena's debt from $23 million to $6.8 million, said Bruce Furness, former treasurer for the MSF.

The dramatic reduction was made possible in large part by an anonymous donor who gave $8.5 million to the foundation.

The banks agreed to reduce their share of the debt, and a number of private lenders forgave loans, Furness said at that time.

The MSF makes mortgage payments for the arena and pays operational costs. An agreement gives the Fargo Park District ownership of the arena and land, shielding them from property taxes. The Park District then leases the arena back to the MSF.

Another single-ice-sheet arena was later added.The Farmers Union Insurance Arena opened in summer 2016.

Jim Larson, Park District finance director, said the money given by the Engelstad Family Foundation "is not an indication that they (MSF) are hurting."

Early on, the MSF faced financial struggles, "but they've done substantial things to improve their financial position," Larson said.

According to the most recent IRS Form 990 available for the MSF, the organization ended calendar year 2016 with $14.8 million in assets, down from $15.6 million at the start of the year.

Total revenues were listed at nearly $4.7 million.

Ralph Engelstad made hundreds of millions of dollars in the construction and casino businesses. Among the causes the former University of North Dakota hockey goalie supported was the construction of the $110 million Ralph Engelstad Arena in Grand Forks. He died in 2012 at age 72.

His assets were used to endow the Engelstad Family Foundation. The philanthropic organization now has about $800 million in reported assets, the Grand Forks Herald reported.

The family foundation has donated more than $225 million. Chief among the causes receiving money are those in education, the arts, health research and care for the disabled. Significant gifts are given to Catholic charities and institutions.

Most of the gifts are directed to charities in Las Vegas, where the Engelstad family has lived for years and where the foundation is based, or elsewhere in Nevada. Foundation dollars are also distributed in Mississippi, where Engelstad owned a casino in Biloxi, and elsewhere on the Gulf Coast.

The University of North Dakota and the Ralph Engelstad Arena have been steady recipients of funds from the family foundation, as have other causes in Minnesota and North Dakota.

Helmut Schmidt

Helmut Schmidt was born in Germany, but grew up in the Twin Cities area, graduating from Park High School of Cottage Grove. After serving a tour in the U.S. Army, he attended the University of St. Thomas in St Paul, Minn., graduating in 1984 with a degree in journalism. He then worked at the Albert Lea (Minn.) Tribune and served as managing editor there for three years. He joined The Forum in October 1989, working as a copy editor until 2000. Since then, he has worked as a reporter on several beats, including K-12 education, Fargo city government, criminal justice, and military affairs. He is currently one of The Forum's business reporters.

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