Commercial Real Estate Weekly 6.10.20

Des Moines officials consider easing height restrictions to allow tall buildings southwest of Capitol

By Kathy A. Bolten | Senior Staff Writer

Several years ago, the city of Des Moines adopted zoning regulations capping the height of buildings in parts of downtown so views of the Iowa Capitol building wouldn’t be obstructed.

The City Council later this summer will likely be asked to ease those restrictions on certain properties, a move that would allow a proposed $750 million redevelopment project unveiled this week to move forward.

Currently, buildings in an area generally west and southwest of the Capitol, located at 1007 E. Grand Ave., cannot exceed 75 feet in height, or five to six stories. Architectural renderings released this week of the proposed redevelopment of in the Market District located southwest of the Capitol show some buildings that would be seven to 13 stories tall, exceeding the current height restrictions.

Ryan Moffatt, Des Moines’ economic development coordinator, said the city is conducting a building height analysis to ensure views of the Capitol building are protected, particularly from places such as Principal Park baseball stadium.

The group proposing the redevelopment of an 11-block, 39-acre area centered at East Fourth and Market streets is also aware of the desire of city officials to not obstruct views of the Capitol.

"We have been very cognizant of the need to preserve view sights of the Capitol," Paul Hayes, president of JSC Properties Inc., told council members this week.

JSC Properties and MidAmerican Energy Co. own much of the property within the redevelopment area. The city of Des Moines also owns land in the area. City officials are working on an agreement to sell the land to District Developments LLC, an entity that includes JSC Properties and MidAmerican Energy.

Hayes this week revealed development plans for the area that include an indoor/outdoor event venue, a hotel, apartments and condominiums, and office and retail space.

The city is using a laser scanning program to develop a 3D model of the redevelopment area, Moffatt told the council this week. Models of new buildings planned in the area will be added to the 3D model to see how views of the Capitol are affected from different parts of downtown.

Later this summer, the council will likely be asked to rezone some properties in the area to allow for taller buildings, Moffatt said. "We’re trying to find those areas basically where you can and cannot have development that exceeds 75 feet."

One of the proposed new projects in the redevelopment area is a mixed-use building that would include a hotel, owner-occupied condominiums, office space and retail. One part of the building would be 13 stories; the other seven stories.

"The intent for why that’s tapered down is to be respectful of the [Capitol] views," Moffatt said.

RELATED: Proposed $750 million Market District project not slowed by pandemic

LOCAL NEWS

Row houses planned on portion of former AIB campus

Three row house-style buildings with a total of 20 units are proposed to be built on 3 acres of the former AIB College of Business campus, Des Moines city documents show.

Last summer, Tina Smothers of Stuart and Jason Grove of Adel bought the former college campus for $7.5 million. The 14.5-acre site includes seven buildings and an undeveloped 3.1-acre parcel along Fleur Drive. The development team in March sold the vacant ground at 2710 Fleur Drive for $700,000 to developer Bill Kimberley.

Last week, the Des Moines Plan and Zoning Commission approved the Planned Unit
Development Final Development Plan for the project called Pinnacle on Fleur.

The buildings, each with four levels, would include stone facades on the lower halves of the structures; the upper halves would include contrasting colors of fiber cement board panels. A tuck-under garage would be included with each unit.

Hy-Vee plans new Fast & Fresh in West Des Moines

Hy-Vee Inc. plans on building a Fast & Fresh convenience store with a coffee shop, gas pumps and a car wash on 1.8 acres at 210 Grand Ave. in West Des Moines, city documents show. The building for the convenience store and coffee shop is proposed to be 6,570 square feet. Eight gas pumps are also planned. The West Des Moines Plan and Zoning Commission last week approved rezoning the property along Grand Avenue to allow construction of the store and car wash. The property is currently owned by an entity managed by real estate developer and investor Richard Hurd.

Ankeny council approves development agreement with Ryan Cos.
Minneapolis-based Ryan Cos. is proposing to build a 350,000-square-foot warehouse on 35 acres at 5800 S.E. Delaware Ave. in Ankeny. The project is valued at $20 million, according to city documents. Last week, the Ankeny City Council approved a development agreement that would provide up to $1.17 million in property tax rebates to Ryan over five years. The agreement requires that construction of the warehouse begin no later than March 15, 2021, and for at least 70 new jobs to be created by the building's tenants, who are expected to be new to Ankeny. When completed, the development is expected to have an assessed value of at least $17.5 million, according to the development agreement.

Warehouse planned for southwest Des Moines
Airport Development LC, managed by Knapp Properties Inc., plans to build a 57,720-square-foot flex/warehouse on 6.5 acres at 6000 Park Ave., according to city of Des Moines documents. The city’s Plan and Zoning Commission last week approved a Planned Unit Development Final Development Plan for the project. The building would front Park Avenue with parking between the structure and the front property line, city documents show. The rear of the building would have truck access and overhead doors. Each potential tenant bay would have a glass storefront.

WHAT: New headquarters for Kreg Enterprises Inc., also known as Kreg Tool

WHERE: On 25 acres at 7500 S.E. Convenience Blvd., Ankeny
OWNER: Kreg Enterprises
CONTRACTOR: Graham Construction Co.
ARCHITECT: Neumann Monson Architects and Rains Architecture
PROJECT VALUE: $21.6 million
BACKGROUND and UPDATE: Construction is underway on the new headquarters for Kreg Enterprises Inc., which currently is located in Huxley.

The company in April took out a building permit valued at $21.6 million.

Kreg makes woodworking tools, such as jigs, clamps, and cutting and routing tools.

About 230 people are expected to be employed at the new facility, which will be 150,000 square feet. About 50,000 square feet of the building will be office space.

Over a year ago, the Ankeny City Council approved a development agreement with Kreg that included a five-year, 100% tax increment financing package valued at $1.2 million.

Construction of the new facility is expected to be completed by fall 2021.

PREVIOUS COVERAGE: Kreg receives extension to start construction of new facility in Ankeny

A Commercial Real Estate Weekly feature in which we update the status of projects underway in the Greater Des Moines area. Want to include an update about your project or suggest a project to include? Email: kathybolten@bpcdm.com.

Evergreen Properties Investment LLC of Friendswood, Texas, paid more than $8 million to Dallas-based IM & AY LLC for properties occupied by Kum & Go convenience stores in Perry and West Des Moines.

Specifically, Evergreen Properties bought:

• Property in Perry at 1219 First Ave., valued at $169,470, Dallas County real estate records show.
• Property in Perry at 1115 Highway 141, valued at $603,520.
• Property in West Des Moines (pictured) at 3501 E.P. True Parkway, valued at $883,100, Polk County real estate records show.

The transactions occurred on May 28.

Other transactions include:

Westview Apartments Granger LLC paid Farrell Properties Inc. $1.1 million for property at 1600 Linden St. in Granger, Dallas County real estate transactions shows. The property includes a 12-unit apartment building. The building was constructed in 1984. The property’s 2020 assessed value is $521,220. Westview Apartments is managed by Jeffrey Stanbrough of Stanbrough Realty in Clive. The transaction was recorded on June 2.

Elder Properties II LLC paid Ronald and Jacque Patterson $1 million for property at 4950 E. University Ave. in Pleasant Hill, Polk County real estate records show. The 1.5-acre tract is adjacent to the Elder Corp. headquarters in Pleasant Hill. The company specializes in moving dirt and digging ditches for underground utilities. The property, which includes a warehouse and shed, was valued at $603,000 in 2019. The transaction was recorded on June 2.

Lemar Koethe and PRKG 1517 LLC paid David and Karen Bruxvoort $2.29 million for 150 acres of farm ground in northeast Polk County. The land is located at Northeast 96th Street and Northeast 46th Avenue. The transaction was recorded on June 2.

Anant Bhalla and Anubha Lal paid the Janelle Laurine Holmes 07 Trust $1.27 million for residential property at 28 Foster Drive in Des Moines, records show. The two-story, 7,260-square-foot house, built in 1918, sits on 1.8 acres. The property in 2019 was valued at $1.45 million. The transaction was recorded on June 4.

Ryan and Lyndsey Opp of Dallas Center paid Stone Prairie Plex LLC $1.3 million for duplexes along Fourth Street Northwest in Altoona, records show. The Opps bought five duplex units. The transaction was recorded on June 4.

NATIONAL/REGIONAL NEWS

Pandemic forces airports to scale back renovation plans: The coronavirus pandemic has stifled air travel worldwide, prompting officials to rethink plans to spend billions of dollars on new terminals and runways, reports Mike Cherney of the Wall Street Journal. In Florida, Orlando’s airport authority scaled back an expansion plan, and in San Francisco, officials are postponing by at least six months a $1 billion terminal renovation. "We think airports will generally wait to assess the stability of the travel market before ramping up capex again," Parvathy Iyer, an analyst at S&P Global Ratings, told Cherney. "We would be concerned if airports had not already moved to cut or push out [capital expenditures] in this difficult environment."