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Bank Campus Contingent Upon $125 Million Goal
Post Date: May 05 2015

By The Bismarck Tribune
If North Dakota's state-owned bank can make $125 million this year, it will be allowed to build a $17 million financial services campus.

As part of the North Dakota Industrial Commission’s budget, the Bank of North Dakota received legislative approval to invest bank assets to expand its campus on Memorial Highway, said Eric Hardmeyer, president of BND.

In 2011, the bank purchased two connected parcels of land with the intention of creating the campus. The BND building already houses other financial service organizations, such as the U.S. Small Business Administration, the North Dakota Small Business Development Center and Service Corps of Retired Executives. An additional 40,000- to 50,000-square-foot building would allow the property to house other state economic development agencies, including the North Dakota Department of Commerce, the North Dakota Housing Finance Administration and the North Dakota Department of Financial Institutions, according to Hardmeyer.
BND had originally sought approval for the financial services campus in individual Senate legislation, SB 2282, which failed on the Senate floor. The campus was brought back later as an amendment to the Industrial Commission’s budget bill.

Hardmeyer said, even thought the campus required no general funds, it was defeated in the Senate at a time when the leadership was ruling out all construction projects. He said that philosophy changed at crossover, making lawmakers more amenable to the idea.

Hardmeyer said BND will likely meet the $125 million contingency set by the Legislature. He said 2014 marked the banks 11th year of record profits. It made $111 million, up significantly from the previous year’s profits of $94 million.

The campus will not be using any general fund money, Hardmeyer said. He said he is not sure why the Legislature chose to add the profits contingency except that lawmakers may have been looking for a trigger point before moving forward.

From the bank’s perspective, the campus is an investment, much like a bond, Hardmeyer said. It plans to charge about $16 per square foot in rent. The rent would lead to a 2.5 percent return on investment.
Hardmeyer said the lease rate is competitive with market rate and state agencies would be paying their lease money back to another state-operated institution rather than the private sector.

Hardmeyer said the campus would create a one-stop shop for economic development, making the government more efficient and making it convenient for businesses getting started in the state.

If the contingency is met, the bank will start planning and aims to begin construction in 2016.

Bank Campus Contingent Upon $125 Million Goal - The Bismarck Tribune
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