BISMARCK, N.D. (North Dakota Monitor) – Legislative leaders plan to meet with State Historical Society officials to explore options after construction on a $78 million Military Gallery halted Friday due to insufficient funds.
About $4.1 million is pledged toward a $38.8 million private fundraising goal. The total collected so far is about $800,000, according to PACE Fundraising.
“I think everybody’s a little bit surprised that construction went forward without the pledges in place,” Senate Majority Leader David Hogue said Monday. “But that’s water under the bridge, and we have to figure out a path forward.”
The state had already committed $39.2 million to the project at the Capitol, which broke ground a year ago.
Construction is paused through at least July on the 70,000-square-foot addition to the State Heritage Center, or until funding is resolved, the Historical Society announced Friday.
“It’s an unfortunate pause, and there’s some frustration there as well,” said Hogue, R-Minot.
Sen. Brad Bekkedahl, chair of the Senate Appropriations Committee, said options are limited until the full Legislature reconvenes.
“Ultimately, it is a state-owned building on state property. So the state will have, I think, some responsibility to get it completed,” said Bekkedahl, R-Williston. “But the only way to do that, the way that the legislation was written, is for the Legislature to be back in session and provide extra funding to the project if needed.”
There is no language in legislation approved last year that would allow the State Historical Society to borrow additional money, Bekkedahl said. The project has expended a $20 million line of credit from the state-owned Bank of North Dakota approved by the Legislature.
A crossroads
The Military Gallery is a joint venture involving the State Historical Society, the North Dakota National Guard and their private foundations. Minutes of a May 2025 meeting of the Joint Military Museum Advisory Committee show the group discussed the project being at a “crossroads” and whether to proceed. The committee is chaired by State Historical Society Director Bill Peterson and includes Lt. Gov. Michelle Strinden, and representation from the Guard, the Historical Society, their foundations, and the Office of Management and Budget. No lawmakers are on the committee.
Members were told private fundraising totaled $7.75 million in pledges at the time. The project needs about $12.8 million in pledges to access $15 million in state funding, under requirements approved by the Legislature.
At the meeting, two representatives of PACE Fundraising, a Fargo-based consultant hired by the National Guard Foundation, said they were 90% confident fundraising would hit the $12.8 million mark before a July 2025 groundbreaking.
Committee members voted unanimously to proceed with the project.
“Everybody had a high level of confidence that this was the right thing to do” based on the fundraising information available at the time, Peterson said.
The project has never hit the milestone of $12.8 million in pledges, according to Shannon Schweigert, principal manager for PACE Fundraising. At the time he indicated 90% confidence, Schweigert said he was aware of another $2 million pledge that was being finalized, leaving about $3.4 million still needed to reach that goal.
The highest total in pledges the project has reached was about $9.4 million, Schweigert said. A donor rescinded a $5 million pledge in February, leaving pledges at about $4.1 million. Most are five-year pledges.
Legislators tied the matching state dollars to pledges, not donations received. An earlier version of the bill passed by the Senate would have required the project to have half of the private fundraising pledged before accessing $15 million in state funding. The final version of the bill reduced the threshold to one-third of the fundraising goal.
Lawmakers in 2025 also approved $4.2 million for the project to repay a Bank of North Dakota line of credit for planning and design.
Peterson and Jackie Huber, deputy adjutant general for North Dakota and president of the North Dakota National Guard Foundation, both expressed confidence in the project Friday, citing strong support from around the state.
Schweigert said he believes PACE Fundraising will raise not only the $12.8 million to access state funds but will also hit the $38.8 million goal. He said 21 potential major donors are reviewing proposals that total $27 million.
“We will get this project funded. We’re going to need some time to do it,” Schweigert said.
The Legislature will be asked in the 2027 session to budget $20 million to pay back the Bank of North Dakota line of credit, not including interest. About $419,000 in interest has accrued so far, according to the Bank of North Dakota.
In a statement, Gov. Kelly Armstrong spokesperson Mike Nowatzki said the governor has been informed of the fundraising challenges “and looks forward to seeing construction resume and the project completed as approved by the Legislature.” Strinden was not available for an interview Monday, Nowatzki said.
Kraus-Anderson Construction, the company leading the construction, declined a request for comment Monday, referring questions to the State Historical Society. Peterson said Friday there are no unpaid bills for the project.
Minutes from a May meeting of the advisory committee indicate that contractors were willing to slow the pace of work, delay non-critical activities and adjust billing cycles to quarterly. The minutes also show risks of pausing construction include increased costs of restarting the project and building in winter.
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