City Attorney Stefanie Stalheim said the same law firm that represented the city in a previous lawsuit over a development agreement on the parking ramps is engaged in discussions with some stockholders in the company’s ownership as well as the bank holding the mortgage in an effort to find a path forward.

“We just haven’t been able to make much progress thus far,” Stalheim said.

The city entered a development agreement in 2024 with Big M Minot, LLC, which purchased the former Midwest Federal Building to renovate it into commercial and residential space. The city created a Tax Increment Financing (TIF) District, bonding over 20 years for $2.38 million for asbestos abatement.

Bonds were to be paid off with future taxes on the building improvements. Developers had agreed to a minimum assessment of $14.7 million, which would have ensured the value was sufficient to cover the bond.

Stefanie Stalheim

“That project did not move forward as planned, and the city understands that the LLC has substantial debts, including unpaid taxes,” Stalheim said.

Stalheim said the city remains open to considering any future proposals that would allow for the development of the property and recovery of the bond amount.

“There’s a lot of moving pieces here,” City Finance Director David Lakefield said. “The other party has represented that they have multiple offers on the property but they have not shared any of the details of any of the offers with us, so we don’t know exactly where they’re at. The ball is in their court, so to speak, to bring those offers forward and to address the encumbrances of the building because it’s not only the TIF agreement, there’s a mortgage with a local bank, there’s the component of back taxes that are there. There’s also a number of construction liens against the property that are completely outside of our purview to do anything with.

“Obviously, I don’t think anybody will be made whole in this instance,” he added. “That’s not the expectation.”

Currently, taxes are two years delinquent, Lakefield said. The county can foreclose after three years of delinquency, but the owners also can avoid foreclosure by bringing the taxes current before then.

Lakefield acknowledged if the building had remained as it was, it likely would have been condemned or foreclosed on for back taxes. The asbestos would have made marketing the building difficult, and asbestos would have to be removed before tearing the building down, he said.

According to the owners, there are interested buyers, Lakefield said.

One of them, Duane Brekke, spoke to the council to ask the city to push the issue along, indicating he would withdraw his offer if there is no movement by the end of July.

Brekke said Thursday that he withdrew his offer this week but continues to believe the mayor needs to call a meeting of the parties to force the issue toward resolution rather than let it continue to linger.

Council member Mike Blessum shared Brekke’s concern about the lack of action on the project.

“We haven’t seen any movement on this for months and months and months,” he said. “To Mr. Brekke’s point, we either need to get something going or people are going to move on.”

There’s not much the city can do, though, he added. The city’s sliver of the project needs to be part of a bigger product involving the other players, he said.

“This is extremely complicated, and I don’t know that we can just vacate the previous agreement,” Blessum said.

The council took up the matter for discussion only and did not take any action Monday.