A handful of potential buyers have kicked the tires on Grand Forks’ two publicly-owned corporate centers, but city administrators still have to put together a process by which they’d evaluate offers on either or both buildings and, ultimately, sell them.
For years, Grand Forks city leaders have planned to sell Corporate Center I and Corporate Center II, and city staff who spoke to the Herald said they hope to have them sold sometime this summer. Three or four people have expressed some interest in buying one or both centers, but city staff declined to name them.
“People have inquired, but I don’t want to state their names,” City Administrator Todd Feland told the Herald.
City staff have provided those potential buyers with floor plans for each building, copies of lease agreements with existing tenants there, and copies of December 2019 appraisals that put the market value of Corporate Center I at $6.57 million and Corporate Center II at $3 million. They expect to have an updated appraisal of both buildings later this spring. At present, there is no formal real estate listing for either building.
“At this point, we're just sharing information with anybody who expresses interest,” Meredith Richards, the city’s community development director, said.
City staff hope – or hoped – to have a sale finished by June, but the lack of a formal plan means it could happen sometime in the third quarter of this year.
“June is still possible but it's probably looking a little optimistic to me, given that we don't have an updated appraisal or any official sale process announced,” Richards said.
Both centers sit at the intersection of DeMers Avenue and North Fourth Street. Corporate Center I houses offices for Alerus Financial; Brady Martz & Associates; and the Camrud, Maddock, Olson, and Larson law firm. Those tenants have the option to buy the space they’re currently leasing from the city.
Across the street, Corporate Center II houses more Brady Martz offices plus a regional social security office. Those tenants could still strike a deal to lease their spots from a new owner, but they aren’t guaranteed the option of buying their existing spaces.
According to Richards, the U.S. Government Services Administration, which helps federal agencies like the Social Security Administration secure office space, has begun seeking proposals from Grand Forks entities to find a new location. Their lease with the city expires in February. But Richards said the city would like to keep the office at that location and would renew the government office’s lease before the sale. Still, she acknowledged, contracts can be voided or altered with the mutual consent of both parties, which means the Social Security office could wind up in a different location, but the intent of the city is to keep it where it is located.
The sales process for the two buildings will be decided at upcoming city meetings.
“We don't have it on an agenda yet, but at some point we will have to come up with an actual sale process,” she said.
Grand Forks city leaders have planned to sell the two buildings, and Mayor Brandon Bochenski campaigned partly on their sale. Previously, city officials have said the majority of the proceeds of the sale will be used for economic development.
Selling the centers at their appraised prices would bring in a total of $9.57 million, but it’s not clear how, exactly, the city would spend that money once the sale has finished.
Both centers were built with federal money after the 1997 Flood, which means that about a third of their sale price is set to head to the city’s federally funded Community Development Block Grant program. That portion could be about $3 million, and would then be used on mostly brick-and-mortar projects for nonprofit groups in Grand Forks. Richards said she has notified these groups of the possible influx of new funds to allow them time to review their capital needs and prepare proposals on how that money would be spent, should they be awarded.
That leaves roughly $6 million which would be returned to the JDA, where it will be considered “unencumbered cash.”
Richards said it will be earmarked for economic development. Feland said that could mean relatively high-risk loans for tech companies or money for a newly revealed plan to redevelop land south of the city-owned Alerus Center.
“The community made this investment after the flood with the corporate center; now we’re reaping those benefits,” Feland said. “How do we do similar things so that 20 years from now other policymakers and others in the city of Grand Forks are reaping those benefits?”