Minot council approves 20-year lease with Pathfinder Services to run Broadway Circle Complex

The Minot City Council voted 5-0 on Oct. 30 to approve agreements with Pathfinder Services of North Dakota to operate the Broadway Circle Complex under a 20-year commercial lease and a separate operations and maintenance agreement.

City Attorney told the council that on May 5 staff were authorized to develop the agreements and that the complex — which includes commercial space, a family homeless shelter and a 17-unit low- to moderate-income apartment building on South Broadway — would be leased to Pathfinder with an exclusive, irrevocable option to purchase the property after the 20-year term. "Staff's goal in this particular instance was to make sure that the city is able to recoup the city funds that were invested to complete the construction, which is approximately $1,300,000," the City Attorney said.

Council discussion focused on the financial terms. Alderman Hayes summarized the deal as "they're paying $4,500 a month for 20 years, a balloon payment of approximately $230,000 interest free," and asked whether the arrangement — including tax and maintenance responsibilities — left the city exposed. "That just seems like a really good deal," he added, framing his skepticism about long-term recovery.

The City Finance Director said the city had budgeted $1,300,000 for the project but had not expended the full amount and that "we will recover some interest, so to speak, over time." He said most of the complex is new construction, explained that commercial tenants would be responsible for property taxes on their portions, and added that the low- to moderate-income housing portion would be exempt or have minimized taxes under applicable agreements. The director also said the lease is not a traditional triple-net arrangement: the city will carry property and casualty insurance and bill Pathfinder for the premium so the city maintains the insurable interest in the exterior of the property.

Council members also discussed the contract's risk at term end. The finance director said if Pathfinder could not make the balloon payment the governing body would determine next steps and, in a worst-case scenario, the property would revert to the city.

Alderman Blessum, who moved to proceed with the contract as presented, urged approval on the grounds of operational stability: "We need a functioning and running homeless shelter to meet the federal obligations that the city is under for 20 years," he said, adding that he felt confident in Pathfinder's selection. The mayor said nonprofits had called in support and urged the council to move forward because shelter space is needed.

The council voted to skip the scheduled executive session and approve the staff recommendation. The clerk recorded the vote as 5-0 in favor. After the vote the meeting was adjourned.

Votes at a glance - Motion: Skip executive session and approve the staff-recommended lease and O&M agreements with Pathfinder Services of North Dakota. Moved by Alderman Blessum; motion passed 5-0 (Blessum, Fuller, Hayes, Ganser, Samuelson voted yes).

What the agreements say (high-level) - Term: 20-year commercial lease with an exclusive, irrevocable option to purchase after the initial term. - Financial highlights: Rent of $4,500 per month (as discussed by council), first six months of rent foregone to allow reinvestment in maintenance, and an estimated interest-free balloon payment of about $230,000 at lease end. City invested approximately $1,300,000 in construction costs (budgeted), some of which was federal grant money tied to national resiliency objectives. - Operations: A separate operations and maintenance agreement defines how Pathfinder will operate and maintain the shelter and apartments; the city retains ownership and insurable interest while billing Pathfinder for insurance premiums.

Next steps The council approved the motion authorizing staff to finalize the contracts and obtain the necessary signatures. No executive session instructions for renegotiation were given at this meeting. The council adjourned immediately after the vote.