Fargo committee hears consultants: downtown reuse ranks highest in one analysis as financing gaps emerge

The Fargo Convention Center Evaluation Committee on Wednesday heard consultants from Baker Tilly and HVS present a side‑by‑side review of four competing proposals — a Civic Center adaptive reuse, a new Brewhalla/Unicorn Park development, arena‑based options tied to the Fargo Dome/Enclave, and a Shields site — and agreed to rank the proposals and move into negotiations rather than try to finalize every financial unknown now.

Baker Tilly’s David Earnhardt said the firm’s work focused on feasibility and what would be required to get each submission “over the finish line,” and stressed that assumptions about financing, operations and guarantees varied widely across the proposals. “Our goal was really to view each one asking the question of: is this feasible? Is it reasonable?” Earnhardt said.

The consultants identified broad themes rather than endorsing a single winner. Madeline Garza (Baker Tilly) told the committee that the proposals differ by roughly $20 million in capital cost estimates and present varying levels of operational risk and public subsidy needs. She said the Civic Center adaptive‑reuse plan fits the old $41 million base case in a minimal form but would likely require an additional $5 million in TIF to deliver a fuller visitor experience and still showed an ongoing operating subsidy in year five under the teams’ modeling.

HVS consultant Tom Hasinski, who provided a separate ranking and market analysis, said the downtown Civic Center reuse scored highest in his review because it benefits from adjacent hotel room supply and a walkable visitor experience — attributes that can help attract multi‑day association meetings. “I ranked the Civic Center EPAC at 82,” Hasinski told members, noting that RevPAR (revenue per available room) in the market has softened in 2025 and hotel financing is tighter than in earlier years.

All consultants warned of material gaps. Baker Tilly highlighted an example: the Fargo Dome–style proposal showed a roughly $12 million capital gap in its current pro forma. Other proposals relied on new TIF districts, investor commitments or developer guarantees that the consultants said require further vetting. The consultants also recommended negotiating guaranteed maximum price (GMP) contracts or clearly defined completion guarantees to limit the city’s exposure to construction‑cost overruns.

On project financing, the committee discussed an updated bond capacity estimate. Members noted a prior Baker Tilly run that produced a $41 million capacity; Baker Tilly reported it had rerun the model with a lower interest assumption and produced about $45 million in potential bonding capacity while preserving modest operating set‑asides in the early years. Consultants and members agreed an industry rule of thumb is to size bonds so lodging‑tax receipts cover debt service at a coverage ratio (commonly 1.2–1.5x), and that operating subsidies can be structured as transfers from the lodging tax rather than annual general‑fund appropriations — though the city would still bear the risk of a lodging‑tax shortfall.

Mayor Tim Mahoney warned commissioners that the city has little set aside to subsidize operations: “The city’s finances are fine, but we have no really money put away to subsidize the convention center,” he said, adding that some proposals appear to drift toward seeking ongoing city support rather than relying only on lodging‑tax‑backed financing.

Committee members pressed proposers’ differing pro‑forma assumptions — event mix, number of event days, F&B models, insurance, naming rights and administrative cost allocations — and asked staff to request standardized templates or demand profiles from proposers so the committee can make more apples‑to‑apples comparisons. Several members argued that, because the proposals are structurally different (some focus on consumer shows, others on association meetings or sporting events), perfect parity is impossible, and ranking should focus on the bottom line and on negotiable terms the city can require.

The group also debated hotel availability and compression: downtown reuse proponents point to existing nearby hotels (Radisson, Jasper and other properties) and the potential to secure block rooms or pursue PIPs (property improvement plans). HVS said PIP financing for existing hotels is typically easier than financing a new hotel, which matters to some proposals that assume new adjacent hotel rooms will be available by project opening.

The committee agreed on a practical path forward: use an updated baseline (roughly $45 million in bonding capacity and the possibility of limited start‑up lodging‑tax transfers in the first few years, modeled at roughly $500,000 initially) as the negotiating starting point, ask proposers for clarified pro‑formas and demand profiles, and submit ranked scores for committee discussion the next day. Chair Charlie Johnson asked members to submit their scores by 10 a.m. the following morning so the panel could reconvene at 12:30 to debate and finalize a recommendation to the City Commission.

No formal vote or final decision was taken at the meeting; committee members said the rankings will determine which proposer the city begins negotiating with and that negotiations may reveal deal‑breaking issues that could move the group to the next ranked candidate.

What happens next

Committee members will request standardized financial templates and additional documentation from proposers, finalize ranked scores in the short term, and direct staff to begin negotiation with the top‑ranked proposer subject to the city’s legal, financial and due‑diligence review. Several members emphasized that any additional public funding beyond the lodging‑tax bond capacity should be treated as a policy decision for the City Commission, not a foregone conclusion of the evaluation process.