Horace council approves 30-year ground lease for West Fargo Hockey arena

The Horace City Council on March 2 approved a 30-year ground lease with the West Fargo Hockey Association that lets the nonprofit design, build, operate and maintain a new ice facility on city-owned land.

City staff said the lease requires West Fargo Hockey to pay annual rent of $25,000, due each Jan. 10, with a 6% escalation every three years per an attached rent schedule. The association is responsible for building-related taxes and will be capped on special assessments at $35,000 annually for the first three years, with a 6% escalation every three years; the city will cover any specials above that cap, staff said.

"So the annual rent will be $25,000. It's due before January 10 annually," said Lucas, the city staff member who walked council through the agreement.

The lease leaves the city as the landowner while granting West Fargo Hockey the right to design and operate a facility that may include one or two sheets of ice, locker rooms, a lobby, training space and concessions. Staff noted options for future expansion and a requirement that additions and major renovations receive the city's prior written approval.

Land-assembly conditions must be satisfied before construction may begin. Staff said the council and developer are coordinating a property exchange with the Sparks Trust and expect a related Sparks 3rd plat to be before the council on March 16; the lease gives West Fargo Hockey the option to terminate if those conditions are not met by May 1, 2026.

City staff also explained construction and infrastructure milestones the city will meet to support the project: roadway curbing and utility infrastructure by Sept. 30, 2026; third-party utilities (electric, telecommunications, fiber and gas) by Oct. 31, 2026; and street paving by June 30, 2027. Council members asked how the timeline would be managed if a contractor or the weather causes delays; staff said milestones are intended as achievable targets and that they will work to provide reasonable flexibility.

West Fargo Hockey representatives told the council their organization serves roughly 200 youth participants from the West Fargo schools and that the new facility will relieve regional demand for ice time. "We have, like, 200 and some odd kids that are in West Fargo Hockey," one association representative said, describing the program's footprint and the need for more ice.

The lease gives West Fargo Hockey primary scheduling authority and the right to collect program revenues, while directing the parties to negotiate a separate agreement governing specific public-access programming (open skate times and community activities). Council members asked how the city would ensure community ice time occurs; staff said the parties will reconvene once the facility is operating and that the separate agreement will outline details.

The initial lease term begins at service commencement (certificate of occupancy) and runs 30 years, with renewal options; the agreement includes transition plans for the project's disposition at termination and provisions addressing mortgage review, bankruptcy and dispute resolution.

Council member [moved the motion] and another council member seconded; the motion carried by voice vote. Lucas said the mayor and city staff will sign the finalized documents and record a memorandum of the ground lease with the county.

Next steps: the Sparks 3rd plat and other land-assembly items will return to the council for formal consideration at a subsequent meeting, and staff will return with scheduling and permitting updates as the project progresses.