Fergus Falls council joins county CDA, approves assignment agreement for mall purchase amid debate

The Fergus Falls City Council voted to authorize the city to participate in the Otter Tail County Community Development Agency (CDA) and approved an assignment and assumption agreement related to a proposed purchase of the Westridge Mall, after extended debate over taxpayer risk, creditor priority and tenant safety.

Council approved the participation resolution and later approved an assignment-and-assumption resolution that would assign the city's purchase agreement to the county CDA, enabling the county to step into the city’s place on the mall purchase contract. Attempts to table the acquisition for 30 days failed, and a companion motion establishing priorities for any proceeds and a joint task force were inserted into council direction.

The action matters because the county CDA will hold the purchase agreement and perform due diligence on the mall property; council members pressed for protections for local unsecured creditors, and for the separation of utilities and mitigation of health and safety risks to existing mall tenants.

Discussion and council direction: Council members repeatedly said joining the CDA does not itself purchase the mall. Several members urged more time and legal review; others said the county partnership and state grant funding created a limited, time-sensitive opportunity. Council member Kildee (first name not specified in the record) proposed language making reimbursement of public grant dollars and county expenses a priority from any future sale proceeds, with any remaining funds to go to unsecured creditors; councilmember Laura seconded that motion. City staff and county representatives indicated the county had reviewed the draft assignment and understood it would “step into the city’s shoes” on the transaction and continue creditors’ negotiations.

Separately, council considered and rejected a motion to table the mall acquisition. A later motion passed directing that the CDA and the joint task force prioritize separating the mall’s fire-suppression system and other fire-safety measures to protect the four tenant businesses, and that the council communicate that priority to the CDA. Council clarified that any state grant monies supporting the transaction (including an Energy Transition–type grant referenced in the meeting) would remain secured as stated in the grant agreement.

Outcome and next steps: The assignment-and-assumption resolution passed. The county indicated it would continue negotiating with other creditors and perform the county’s due diligence. Council directed staff to convey its priorities to the CDA (fire suppression/separation and tenant protections) and asked the county to secure creditor agreements. The council also preserved the existing 120‑day window for further information and investigation noted earlier in the meeting.

Votes and motions recorded in the meeting minutes and roll calls were reflected during the discussion and final roll calls approving participation in the CDA and the assignment agreement; the formal purchase and transfer depend on successful closing steps and creditor sign-offs by the county CDA.

Ending: The council’s action creates a framework for the county CDA to continue redevelopment work while the council retains a role in a joint task force; council members who opposed immediate action said they remained concerned about taxpayer exposure, unsecured creditors and the pace of the process.