FARGO — Doug Burgum was the public face of Kilbourne Group, the real estate development firm that played a large role in transforming downtown Fargo.

Burgum’s determined focus on redeveloping notable old buildings and constructing new landmarks grew out of his efforts to salvage the former Northern School Supply building, which became the start of the downtown campus of North Dakota State University.

It’s widely known that Burgum sunk part of the wealth he earned as a technology entrepreneur. He was the driving force behind Great Plains Software and later was a Microsoft executive, among other accomplishments.

But it’s much less known that Burgum had a lot of financial help from silent partners — 77 investors each investing at least $250,000 each for a total of $44 million to help launch projects that include Roberts Commons, renovation of the Black Building and development of Block 9, which will tower 18 stories over Broadway.

To raise the capital for its portfolio of projects, Kilbourne Group created a pooled investment fund called the Downtown Fargo Real Estate Fund I in late 2014, a securities offering with the goal of raising $40 million to $60 million.

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That pool of funds, in turn, helped leverage other financial sources, including bank loans, that generated funding for $350 million in projects, said Mike Allmendinger, president of Kilbourne Group.

Since becoming North Dakota's governor in 2017, Burgum has withdrawn from any managerial role in Kilbourne Group, which he founded in 2006. But Burgum invested heavily in the fund, which was a key signal to other investors, said Lauris Molbert, Kilbourne’s executive chairman of the board.

“He personally put his balance sheet to work,” he said.

Similarly, Kilbourne also formed an investment group, Block 9 Hotel, to raise almost $11.7 million for the 125-room boutique hotel that will be part of the Block 9 tower, scheduled to open in the fall of 2020. Kilbourne’s Downtown Real Estate Fund is one of the hotel fund’s shareholders, Molbert said.

Molbert assumed the top executive role at Kilbourne after Burgum stepped aside. An accountant and lawyer, Molbert has previously been the CEO of TMI Hospitality and chief operating officer of Otter Tail Corp.

Now, with a new slate of downtown development projects in the pipeline, Kilbourne has launched a third investment fund, the Great Plains Opportunity Zone Fund.

Once again, the goal will be to raise at least $40 million from investors, Molbert said. To be eligible, investors must be accredited, with an established investing background.

As the name implies, the Great Plains Opportunity Zone Fund seeks to take advantage of the tax benefits for opportunity zones — all of downtown Fargo falls within an opportunity zone — established by the 2017 tax law.

Kilbourne representatives are meeting with prospective investors, as well as tax advisers, financial advisers and tax lawyers, Molbert said. “We’re trying to create awareness,” he added.

Prospective investors have been contacted in Fargo-Moorhead and around the region, but also on the coasts, where investing in real estate ventures in the Midwest are an opportunity to diversify, Molbert said.

“We think Fargo’s going to continue to evolve over the next 10 years,” he said. “When Block 9 gets built it’s going to continue this momentum.”

In meeting with prospective investors from outside the region, Kilbourne finds itself having to deal with stereotypes, some lingering from the Coen brothers’ movie, “Fargo,” depicting the area as a flat wasteland populated by people who talk with a funny accent, Molbert said.

The other common misconception, he said, is that Fargo is in the midst of North Dakota’s Oil Patch. “There’s a perception that it’s all about oil,” he said.

Still, once made aware of Fargo’s amenities and quality of life, as well as high rankings in many lists, those perceptions turn around, Molbert said.

Kilbourne Group, which has 38 employees, acts as a consultant for the fund. Its compensation for serving the investors often includes incentive payments for successful projects, Allmendinger said.