FARGO - Over the last few days, the Kilbourne Group has sent out letters to certain area residents seeking investments in the hotel planned for the firm's Block 9 high-rise downtown.

The firm had earlier said groundbreaking on the $117 million project, which also includes offices and condos, would take place in late spring on the 200 block of Broadway after several delays.

But this latest news actually shows the project is getting closer to groundbreaking, though it will likely happen this summer, according to Kilbourne Group President Mike Allmendinger and F. Scott Neal, president for real estate for the R.D. Offutt Co.

"I'm excited to announce the project is a go from our perspective," Neal said.

The partners have crossed enough hurdles with lenders to be able to offer the investment opportunities to the community, Allmendinger said Thursday, April 19. Asked if the project could still proceed without additional investors, he said it could.

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Specifically, Neal said, the partners received the "term sheet" from their lender Thursday laying out terms of the final agreement such as the interest rate. Calling it a "quasi-agreement," he said it's essentially the "last piece of the puzzle."

Besides private lenders, the city of Fargo is also a key player. City leaders agreed to issue $15 million in bonds to finance a parking ramp and public plaza adjacent to the building and have moved their deadlines five times, the latest being Aug. 15.

"We've seen them go through a variety of different issues to get this project off the ground," Mayor Tim Mahoney said. "We're encouraged because it looks more now that we're moving towards we have solutions to the hurdles they've had."

The Kilbourne Group have explained to city leaders financing was the key hurdle.

Neal said the partners have told prospective contractors to expect a July 1 start date, but realize getting the paperwork completed may require pushing that back to August or September.

The letter to potential investors invited them to join in financing "the development of a boutique hotel in vibrant downtown." The minimum investment is $100,000 starting in the second or third quarter of 2018. Construction would occur from the third quarter of 2018 to the second quarter 2020, with the hotel open for business in the third quarter that year.

Allmendinger said only "qualified investors" would be able to contribute.

These are defined by the U.S. Securities and Exchange Commission as individuals earning more than $200,000 a year each or has a net worth exceeding $1 million, not including the value of their homes. This is meant to ensure they can handle the risk of investments that aren't formally registered with the SEC. Investment institutions are also qualified investors.

Mahoney said he expects there would be a lot of interest from REITs, short for real estate investment trusts, as well as local investors given the Kilbourne Group's and R.D. Offutt's reputation. "I don't think those guys are going bankrupt, so more than likely it's something you would get a return on."

The Radisson Hotel downtown also had private investors from the community when it was built in 1984, he said.

He didn't get the invitation to invest himself, and wouldn't have the funds readily available anyway, he said.

Allmendinger wouldn't reveal how much the partners plan to raise from investors or other financial details of the project. He said financing is in place now, but the more raised from investors, the less resources Kilbourne Group and other partners would have to put in.

Mahoney said he understood the amount needed is $6 million to $8 million based on how much exposure lenders were comfortable with. The lenders recently completed an appraisal to see what the property would be worth, he said.

The Kilbourne Group's letter said operating profits would return to investors between the fourth quarter of 2020 and the fourth quarter of 2025. The investments might be divested with funds returned to investors in 2026.

The letter said the hotel would have 125 rooms and a restaurant seating 150 with space for special events. The hotel will be operated by the Aparium Hotel Group; Allmendinger said that firm will also be an investor. Other parts of the 18-story building include offices for R.D. Offutt Co. headquarters with more than 300 employees, ground-floor retail and "high-end" condos.