Des Moines metro projects, including soccer stadium, score $50M in state aid

By: - June 25, 2021 12:34 pm

USL Pro Iowa and Krause Group are working with the city of Des Moines on plans for a professional soccer stadium site on an abandoned Superfund site south of Martin Luther King Parkway downtown. (Screenshot of Iowa Economic Development Authority board meeting)

Des Moines officials needn’t have worried that two massive development projects that include a $60 million professional soccer stadium downtown and a hockey arena at resurgent Merle Hay Mall would harm each other in a competition for state aid. 

The Iowa Economic Development Authority Board on Friday gave provisional approval of state aid for those projects and major efforts in Ames, Newton, Fort Dodge, Urbandale and Cedar Rapids. 

“We were nervous about putting two Des Moines projects in,” Des Moines Deputy City Manager Matt Anderson said in an interview after the vote. “We didn’t want to pick a favorite and we didn’t want them to cannibalize each other.”

In the end, the projects each got all but $3.5 million of what they requested, or 88%, Anderson said. The wide-ranging Merle Hay project, including housing and new retail, was a joint application by Des Moines and Urbandale. Parts of the mall sit in each city. 

The Des Moines metro ended up with 50% of the $100 million in aid offered in a round that drew requests for $151.6 million. “We always wish we had all the money we needed,” IEDA board member Mark Kittrell of Cedar Falls said.

The other cities’ projects include an indoor aquatics center, outdoor plaza and commercial developments in Ames’ downtown area; redevelopment of the former Maytag site in Newton; redevelopment of Crossroads Mall in Fort Dodge; and a tower, plazas, microbrewery, hotels and offices in Cedar Rapids.

The board approved $26.5 million for the Merle Hay project, and $23.5 million for the soccer stadium and a wide range of retail, housing and hotels on a Superfund site previously occupied by Dico. Anderson said federal contractors have begun clearing contaminated parts of the city-owned site, and the city should finish the demolition of other old buildings by the end of the year. 

Development in the Dico area is expected to total $276.6 million, including the west end of downtown.

Developers are likely to make up the $3.5 million shortfall in funding through design changes or by borrowing more, Anderson said. Some of it may be covered by contingency funds set aside for cost overruns. 

Construction on the projects should begin next year, Anderson said. 

The aid is in the form of sales tax and hotel-motel tax rebates on future receipts based on development over the next 20 years. 

All six cities now will have up to a year to submit a final application for formal approval. Anderson said for Des Moines and Urbandale, that probably will be by the end of this year. 

This is Des Moines’ second success in recent years in a program begun by the Iowa Legislature. The other aid helped with construction of the downtown Hilton convention hotel at the Iowa Events Center. 

Anderson said both projects will be statewide draws. One will turn a Superfund site into a busy part of downtown. The other will help Merle Hay Mall complete its makeover in a new era of retailing. 

“If you let a dying mall take its course and die a slow death, that is a cancer on the neighborhood,” Anderson said. Instead, Merle Hay is responding with the latest changes in years of converting the mall to an outward-facing series of stores and new attractions.

The project planned will add a new home for the Des Moines Buccaneers hockey team and events, a new Kohl’s store, an added retail strip north of the former Sears site, and housing. That will rejuvenate the neighborhood, Anderson said.

Project details

Here is a look at the projects winning preliminary approval:

Ames

Ames, which was granted $10 million of the $21.5 million it requested, plans an indoor aquatic center near downtown and a new plaza area in the downtown area. A centerpiece project is a mixed-use commercial development along Lincoln Way with a pedestrian bridge over the railroad tracks for access to Main Street businesses. The projects would total $154.4 million.

Cedar Rapids

The $262.6 million Heart of America District project was approved for $9 million of the $39.5 million requested. The project is expected to include a 23-story retail/office/condo tower with a grocery, two downtown hotels, restaurants, an atrium connecting the two hotels, housing, a microbrewery, a riverfront patio, a kayak and canoe run on the Cedar River, outdoor plazas, and retail and office space.

Des Moines

Des Moines’ $276.6 million Capital City District would be anchored by Krause Group’s and USL Pro Iowa’s proposed 6,300-seat professional soccer stadium at the long-abandoned Dico Superfund site. The plan also calls for a mixture of hotels, housing, retail, outdoor plazas, a convenience store, and a grocery. 

Des Moines/Urbandale

The $121.6 million Merle Hay Mall project would include converting the old Younkers store into a 3,500-seat hockey arena and building a new Kohl’s store on the former site of the now-demolished Sears store. Developers want to add a hockey training center, new retail space, a hotel, a revamped food court and a new mall entrance.

Fort Dodge

An $86 million Corridor Plaza District project would redevelop the Crossroads Mall site with an indoor/outdoor event center, hotel, meeting space and retail. Backers wanted $18 million from the state, but got $17 million. The mall was built in the 1960s.

Newton

The Legacy Reinvestment District would back a $44.6 million project. The state approved $14 million of the $15.5 million requested. The project would include market rate apartments, a boutique hotel, event center and a banquet kitchen in historic Maytag Co. buildings. Also included are plans for expanded Des Moines Area Community College programs, retail space, plaza improvements, a Legacy Commons, a five-acre park and infrastructure improvements and derecho repairs. Downtown, backers want to add upstairs apartments, facade restorations and a splash pad. 

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Perry Beeman
Perry Beeman

Senior reporter Perry Beeman has nearly 40 years of experience in Iowa journalism and has won national awards for environmental and business writing. He has written for The Des Moines Register and the Business Record, where he also served as managing editor. He also is former editorial director of Grinnell College. He co-authored the recently published book, "The $80 Billion Gamble," which details the lottery-rigging case of Eddie Tipton.

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