8th and Main redevelopment in Moorhead reaches 'major milestone'

"This is the way development should be done in municipalities," said first-term council member Joel Paulsen. "We have incentives that, long term, are really going to be advantageous to the community."

The four story, mixed-use building will include underground parking, retail on the first floor, Eventide office space on the second floor and apartments on the third. But what makes this a "fantastic project," council member Brenda Elmer said, is the incorporation of a public plaza and public art, which is a collaborative effort with the city and West Fargo-based developer Five Stone.

The city in May named Five Stone as the preferred developer of the city-owned land, which was purchased, razed and environmentally tested by the city last summer. About $1.4 million was spent on behalf of the city to prepare the property for future redevelopment.

Monday's agreements finalized the sale to Five Stone for $15,000, though the city's valued purchase price was set at $125,000.

Graffeo said the upfront cost, or "net," was discounted to assist and support the developer in building a public plaza. The city donated the land for the plaza and discounted $50,000 for the development of that space as well as an additional $10,000 for public art.

"It''s a creative financial arrangement," Graffeo said, "and a win-win for both the city and developer."

Another discount of $50,000 was included for environmental costs associated with the site being a former gas station, Graffeo said. The developer has "legitimate concern of additional, unforeseen environmental costs," she said, and provisions in the agreement ensure the city won't incur any costs related to potential environmental issues.

City Attorney John Shockley said the "potential for contamination exists," but the developer agreement "holds the city harmless."

Five Stone now owns the land and developers anticipate breaking ground in September.

Five Stone successfully applied for 25-year tax increment financing, or a tax break with an estimated incentive of $848,000 over the course of eight years. Graffeo said the city is expected to get a minimum of $475,000 back starting the eighth year and until the end of the TIF.

"The city won't have any ownership or interest in the building," Graffeo said, adding that the city is interested in seeing the mixed-use building completed at no less than the agreed minimum value of $5.3 million.

Five Stone also acquired an additional parcel in collaboration with a nearby church to accommodate more parking. Lack of parking space has been a concern from the start.