STATE OF NORTH DAKOTA IN DISTRICT COURT

COUNTY OF CASS EAST CENTRAL JUDICIAL DISTRICT

501 Main Ave DevCorp, LLC, Civil No. 09-2024-CV-01644

Plaintiff,
ANSWER
-vs-

City of Fargo,

Defendant.

[1] COMES NOW, the Defendant, City of Fargo (“City”), by and through its counsel,

and hereby answers and responds to the Plaintiffs’ Complaint and Demand for Jury Trial

dated April 16, 2024 (“Complaint”) as follows:

[2] Each and every allegation in the Complaint is hereby denied unless admitted,

qualified, or explained herein.

[3] As to the allegations in paragraph 1 of the Complaint, the City admits, upon

information and belief, that 501 Main Ave DevCorp, LLC (“Plaintiff” or “501 DevCorp”) is a

North Dakota limited liability company. The City, upon information and belief, denies that

501 DevCorp’s principal place of business is 323 DeMers Avenue, 2nd Floor, Grand Forks,

North Dakota, 58201, and responds that its principal place of business is 214 Broadway,

Fargo, North Dakota, 58102.

[4] The City admits paragraph 2 of the Complaint.

[5] The allegations in paragraphs 3, 4, and 5 state legal conclusions to which no

response is required. The City does not dispute jurisdiction or venue.

[6] The City admits paragraph 6 of the Complaint.

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 [7] As to the allegations in paragraph 7, the City denies the allegation that the

Fargo Renaissance Zone Authority was created and designated to implement the Fargo

Renaissance Zone Development Plan. The City further responds the Renaissance Zone

Authority, according to the Fargo Renaissance Zone Development Plan, has three primary

responsibilities: economic development; promote the Renaissance Zone; and administration

of the Renaissance Zone incentives. The Fargo City Commission appoints the Renaissance

Zone Authority to oversee implementation of the Renaissance Zone Development Plan and

to ensure projects comply with applicable goals and objectives, but all Renaissance Zone

decisions which have budgetary implications are reviewed and approved by the Fargo City

Commission.

[8] As to the allegations in paragraph 8, the City admits the parties executed an

Agreement for Sale of Real Property and Assignment of Easement dated December 27, 2022

(the “Agreement”).

[9] As to the allegations in paragraph 9, the City responds that the Agreement is a

written document and any attempts by 501 DevCorp to misinterpret or misconstrue the

Agreement are hereby denied. The City further responds that the Agreement contemplates

the City selling to 501 DevCorp the real property as described in Exhibit A attached to the

Agreement and that the purchase price was to be $505,000 provided all other terms and

conditions of the Agreement were met.

[10] As to the allegations in paragraph 10, the City responds that the Agreement is

a written document and any attempts by 501 DevCorp to misinterpret or misconstrue the

Agreement are hereby denied. The City further responds that the Agreement contains certain

minimum improvement standards in paragraph 3(a).

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 [11] As to the allegations in paragraph 11, the City responds that the Agreement is

a written document and any attempts by 501 DevCorp to misinterpret or misconstrue the

Agreement are hereby denied. The City further responds that the Agreement provides in

paragraph 3(a) that “[s]o long as [501 DevCorp’s] submitted plans for construction meet the

above-described minimum improvement standards, [City] may not unreasonably withhold

such approval.” The City further responds that 501 DevCorp’s plans did not meet the

minimum improvement standards.

[12] The City lacks sufficient knowledge or information to be able to admit or deny

the allegations in paragraph 12 and therefore denies the allegations.

[13] The City lacks sufficient knowledge or information to be able to admit or deny

the allegations in paragraph 13 and therefore denies the allegations.

[14] As to the allegations in paragraph 14, the City responds that the Agreement is

a written document and any attempts by 501 DevCorp to misinterpret or misconstrue the

Agreement are hereby denied. The City further responds that the Agreement provides in

paragraph 7 that the closing would occur on or before June 30, 2023, but no earlier than

January 1, 2023, subject to other conditions as stated therein.

[15] The City denies the allegations in paragraph 15. The City further responds that

the Renaissance Zone Authority is not empowered to determine whether 501 DevCorp’s

construction plans met or exceeded the minimum improvement standards under the

Agreement. Rather, on April 26, 2023, the Renaissance Zone Authority recommended

approval to the Fargo City Commission of the new application submitted by 501 DevCorp and

to grant to 501 DevCorp the property tax exemption in accordance with North Dakota

Renaissance Zone law, contingent upon completion of the project and verification of costs.

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 [16] The City denies the allegations in paragraph 16.

[17] As to the allegations in paragraph 17, the City responds that the Agreement is

a written document and any attempts by 501 DevCorp to misinterpret or misconstrue the

Agreement are hereby denied. The City admits 501 DevCorp notified the City of its intention

to close.

[18] The City denies the allegations in paragraph 18.

[19] As to the allegations in paragraph 19, the City admits it sent a letter to 501

DevCorp dated June 29, 2023, which indicated the City did not intend to proceed with closing

on June 30, 2023. The City further responds that 501 DevCorp was notified of the City’s

intention to not proceed with closing prior to June 29, 2023.

[20] The City denies the allegations in paragraph 20.

[21] No allegations are made against the City in paragraph 21 therefore no response

is required. To the extent a response is deemed necessary, the City denies the allegations.

[22] The City denies the allegations in paragraphs 22, 23, 24, and 25 and puts

Plaintiff to its strict burden of proof thereon.

[23] No allegations are made against the City in paragraph 26 therefore no response

is required. To the extent a response is deemed necessary, the City denies the allegations.

[24] The City denies the allegations in paragraphs 27, 28, 29, 30, 31, and 32 and

puts Plaintiff to its strict burden of proof thereon.

AFFIRMATIVE DEFENSES

[25] Plaintiff’s Complaint fails to state a claim upon which relief may be granted.

[26] Plaintiff failed to satisfy conditions precedent.

[27] Plaintiff failed to mitigate its alleged damages, if any.

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 [28] Plaintiff anticipatorily breached or repudiated the Agreement.

[29] Plaintiff’s claims may be barred or limited by the doctrines of consent, failure

of consideration, waiver, estoppel, fraud, unclean hands, and laches.

[30] Any alleged damages incurred by the Plaintiff were caused by its own actions

or failures or the actions or failures of its agents.

[31] Defendants preserve all other affirmative defenses, including those contained

in N.D. R. Civ. P. 8 and 12, pending discovery in this case.

[32] WHEREFORE, the Defendant, City of Fargo, hereby requests that the Court

enter judgment as follows:

[33] Dismissing the Complaint in its entirety with prejudice;

[34] Awarding the City its costs, disbursements, and attorney’s fees, as may be

allowed by law; and

[35] Providing for such other and further relief as the Court deems just and

equitable.

Dated: May 8, 2024 /s/ Kasey D. McNary

Kasey D. McNary (#06590)
SERKLAND LAW FIRM
10 Roberts Street North
Fargo, ND 58102-4982
(701) 232-8957
kmcnary@serklandlaw.com

ATTORNEYS FOR DEFENDANT

CITY OF FARGO