How North Dakota’s Military Gallery project ran out of money for construction
Officials in charge of the North Dakota Military Gallery project continue to express confidence in the project's fundraising and defend the decision to begin construction last summer, even as the gallery sits stalled and half-constructed on Capitol grounds.
So what happened over the last year that led the project to stall in July?
Bill Peterson, the executive director of the State Historical Society of North Dakota, told the Tribune it was the result of a "perfect storm."
It was ultimately Peterson's call to begin construction of the Military Gallery on July 10, 2025. He said he made the decision based on high confidence that the project would unlock state Strategic Investments and Improvements Fund dollars, a mistaken belief that the project could secure bridge funding if it became necessary, and a favorable construction forecast paired with a desire to avoid construction cost inflation.
"I made the best decision we possibly could on the information that I had from all the experts, including the fundraisers, National Guard, JMMAC, construction company, everybody, and a lot of those things didn't materialize the way we had planned, on the schedule that we had planned," Peterson said. JMMAC refers to the Joint Military Museum Advisory Committee.
Peterson told the Tribune that starting construction last July was "the right thing to do" and said "it was a good time" to start construction.
"I'll tell you this: they could fire me tomorrow, and given it to do all over again, because it's the right thing to do, I would help the National Guard out and do this project all over again because it's the right thing to do for our military," Peterson said.
The gallery
The Military Gallery expansion to the North Dakota Heritage Center and State Museum is a public-private partnership involving the North Dakota State Historical Society and the North Dakota National Guard Foundation, a nonprofit organization that supports military members, veterans and their families. The gallery is planned to be a 70,000-square-foot space housing exhibits on the service of North Dakotans in the country's armed forces, with a Minuteman III intercontinental ballistic missile as the museum's centerpiece.
The National Guard Foundation managed the fundraising side of the project through its contract with Fargo-based PACE Fundraising, while the Historical Society managed the construction with the assistance of the Office of Management and Budget, according to officials involved in the project. Minneapolis-based Kraus-Anderson Construction Co. was contracted to build the gallery.
Starting construction
Peterson said he decided to start construction in July 2025 following a May meeting in which the Military Gallery's oversight board voted to move forward with the project.
Peterson chaired the Joint Military Museum Advisory Committee. Lt. Gov. Michelle Strinden was also on the committee; she declined an interview with the Tribune about the Military Gallery project and her role on the committee. She directed the Tribune to the committee's meeting minutes.
The North Dakota Legislature had passed a bill during the earlier 2025 legislative session that funded the State Historical Society, an agency of the North Dakota state government. In the agency's budget, lawmakers included $15 million in SIIF funding for the Military Gallery once the project reached $12.8 million in pledges from donors. Pledges were far short of that total in spring 2025.
Peterson said he interpreted the May 2025 vote by the JMMAC to mean moving forward with the gallery's groundbreaking and construction. Others involved in the project did not understand it to mean the same thing.
Peterson said he was following a schedule proposed in Kraus-Anderson's interview for the project in 2024 when he decided to start construction in July 2025.
He also said there was a cost in waiting to start construction, as construction costs would inflate as the price of materials increased over time, potentially increasing the cost of the project by roughly 15% to 20% a year.
Brig. Gen. Jackie Huber, acting in her role as president of the North Dakota National Guard Foundation, not in her role as deputy adjutant general of the North Dakota National Guard, and Shannon Schweigert, the managing partner at PACE Fundraising, said they were told July's groundbreaking was ceremonial in nature.
"Following that meeting, we raised concern about a groundbreaking in July of 2025. We were told it was ceremonial," Schweigert said. "It was not ceremonial."
Work on the gallery began in August 2025, roughly one month after the July 10 groundbreaking.
Schweigert told the Tribune that PACE Fundraising was not aware that the July groundbreaking was the start of "ongoing construction" and would have advised that it was "out of the ordinary" to start ongoing construction with so few pledges solidified.
"Usually before you break ground, you want to be 50% for-sure in your pledges; 75% is a better number before you break ground," Schweigert said. "We have run projects — and projects do break ground before they have 100%, but you usually are within shouting distance of 100%."'
In total, the project is designed to be a 50-50 split between public and private funding, meaning the project needs to raise roughly $39 million in private donations. As of the July decision to cease construction, the project had just over $4 million in pledges and had collected only $800,000, according to draft meeting minutes and reporting from the North Dakota Monitor.
As of July, when the project stalled, it had expended a $20 million line of credit from the state-owned Bank of North Dakota and received another $4.2 million from lawmakers to repay a separate line of credit used for the planning and design of the project.
Fundraising amid scrutiny
Peterson told the Tribune a large reason he decided to start construction was PACE Fundraising's statement during the May 2025 committee meeting that PACE was "90% confident" the project would have enough money in pledges by the July groundbreaking to unlock SIIF funds.
As of the May 2025 meeting, the project had roughly $7.75 million in pledges of the $12.8 million needed to unlock SIIF dollars, according to meeting minutes. The necessary pledges never appeared. Meeting minutes indicate there were no further significant pledges received by the committee's August 2025 meeting. Minutes show PACE Fundraising slowly garnered a maximum of just over $9 million in pledges by January 2026. However, a $5 million pledge was rescinded in February, and another $10 million pledge never materialized.
Peterson said the instability of the economy over the past year, including "on-again-off-again" wars, high inflation and high energy prices, has negatively affected people's willingness to donate to projects.
The Joint Military Museum Advisory Committee moving forward with the project because of confidence in pledges, which later failed to appear on the expected timetable or were rescinded, left the project in a hard place, according to Huber.
Schweigert said PACE Fundraising was "as disappointed as anyone" that the project had not received enough pledges to unlock SIIF funding, but said the donor pool in North Dakota is fatigued, in part because of the recent fundraising efforts of the Theodore Roosevelt Presidential Library, which had its grand opening in July and recently announced that it had raised more than $500 million in private donations.
He said under normal circumstances, the fundraising campaign for the Military Gallery would be in a good place. PACE Fundraising is currently in discussions with 65 donor prospects totaling $75 million in asks, according to Schweigert. He said PACE Fundraising has 19 formal proposals totaling $28 million currently being weighed by potential donors.
Donors choose to give to a project because it is successful and because it can make a unique impact, according to Schweigert. He said public scrutiny of a project does not help with fundraising.
"All of this public scrutiny is not going to help the campaign," he continued later. "If anyone thinks, 'Well, there's going to be some major donor that's going to come to your rescue because of all this public scrutiny,' they're not going to do that."
A mistaken belief in available bridge funding
Peterson told the Tribune it had been his understanding since the passage of House Bill 1018 in 2025, which laid out the requirements for SIIF funding for the Military Gallery, that bridge funding was available to the project.
"We felt that with the intent of the legislation ... that the ability to get bridge funding was baked into the legislation," Peterson said. "That turns out not to be true, and that took a lawyer to figure out."
Peterson declined to say when the State Historical Society first sought legal advice concerning funding options to continue work on the Military Gallery. He said it was a "confidential conversation" between him and the State Historical Society's attorney.
A letter to Peterson and the State Historical Society from the agency's general counsel, Mark Openshaw, dated July 2 states: "The State Historical Society of North Dakota does not have the authorization to obtain funding for the project beyond those listed specifically in H.B. 1018 ... such funding options have not been authorized by the legislature."
A day later, on July 3, the project halted construction.
Even with strong pledges, there is a chance the project would have been forced to halt construction without bridge funding, according to both Peterson and Schweigert. Schweigert said "pledge financing," where a project receives a loan to finance work while pledge payments are coming in, is unavailable to state agencies.
Peterson told the Tribune: "Somebody could have given me $40 million and said, 'I'll give it to you over seven years,' and I still would have had to put a pause on it (construction) because I had no ability to get bridge funding."
The Military Gallery and September's special session
Sen. David Hogue, R-Minot, has proposed a bill for this week's special session that would provide a $35 million line of credit through the Bank of North Dakota to the State Historical Society of North Dakota for continuation of the North Dakota military museum project. The loan is designed to be repaid through donations to the project. But should the project fail to procure enough donations to pay off the loan by March 31, 2029, the Legislature would pay off the remaining balance with a deficiency appropriation.
"We have a state-owned project here that we would have liked them to have raised more money than they apparently have, and so we have to step up more," Hogue said. "All these buildings on this Capitol grounds have been paid for by public dollars, and I'm not sure why this one is different."
Sen. Sean Cleary, R-Bismarck, proposed a bill for the special session that would require 75% of nonstate gifts, grants and donations to be secured before public improvement projects are allowed to break ground.
"When the Legislature authorizes a project based in part on private fundraising or other nonstate funding, there should be reasonable assurance that those funds will materialize before construction begins," Cleary said in an email to the Tribune.
The bill was not chosen to be introduced during September's special session, but Hogue said it is likely something similar to Cleary's bill will be considered during the 2027 regular legislative session.
Peterson called Hogue's bill an "elegant solution to a complicated problem." He said it is intended to be the bridge funding the project needs while it raises funds.
Schweigert also said he likes Hogue's bill because it gives the project time to gather pledges, but he reiterated that the funding would not be an issue if construction had not started when it did.
"We wouldn't be talking about this if we hadn't started construction," Schweigert said. "Because we would have the time that we need."