Will construction on Des Moines' skyscraper The Fifth start this month?
The building boom that has defined Des Moines since the recession will continue in the new year.
Construction on the first phase of downtown Des Moines' next skyscraper, The Fifth, is expected to start this month.
Meanwhile, plans for all three phases of the mixed-use tower at Fifth Avenue between Walnut Street and Court Avenue have gotten bigger. Des Moines City Council is expected to vote Monday on an amendment to Mandelbaum Properties' economic development agreement, setting in motion new activity at the vacant 1.4-acre site.
"The amendment allows for a bigger and better project," said Justin Mandelbaum, principal of the development firm.
"Assuming that passes on Monday, then we'll basically be ready to start construction" after a final closing with the city Sept. 17, he said.
Plans for The Fifth have grown in size, scope and cost since it was first proposed more than three years ago as a 25-story tower. Mandelbaum has been exploring the feasibility of increasing the tower to 39 stories since last September. A vote Monday will make that height a requirement under the economic development agreement with the city.
Mandelbaum expects the tower to ultimately be 40 stories, he said.
"He's had that time to kind of explore both the financing and the design aspects further since he first put the design forward," said Erin Olson-Douglas, Des Moines' economic development director. "It has a bigger impact on the skyline than what the previous version did. It's a good, exciting proposal."
Other aspects of the multi-structure development have also grown.
The parking garage will now have 751 parking stalls instead of 564, the movie theater will be three stories instead of two, and there will be 120 hotel guest rooms instead of 84.
The Fifth will consist of three separate buildings. A five-story structure facing Court Avenue will house the eight-screen movie theater plus two floors of office space and a ground-floor restaurant and bar. The tower facing Walnut Street will house the luxury boutique hotel, announced earlier this year as The 21C Museum Hotel, and 201 apartments. The parking garage will stand between the two buildings. It will have 5,500 square feet of ground-floor retail space facing Fifth Avenue.
Construction on the parking garage will be first. It's required to be finished Aug. 16, 2020 under a complex financial assistance package with Des Moines.
It replaces a city-owned parking garage that has since been demolished. A vacant lot with construction fencing has sat in its place all summer.
Des Moines has agreed to offset some of the costs associated with building the $48 million parking garage with a "shortfall loan." The city will pay the developer the difference between his private loan payment and the revenue generated by parking fees, said Carrie Kruse, economic development coordinator. About $6.8 million of the city's loan will be forgiven after 20 years.
"It's impossible to predict" how much the city will actually pay Mandelbaum Properties during the life of the 20-year loan because they don't know how well the parking garage will perform, she said.
"We have market studies that show there's a demand for a garage in this location, but it's an estimate at the end of the day," Kruse said. "And that's the case whether the city owns the garage, or a private developer owns the garage."
In exchange, Des Moines will get the first $1 million generated in parking revenue. Mandelbaum will get the second $1 million — but only if construction on the second and third phases of the project have started, Kruse said.
Construction on the theater and tower are expected by Oct. 31, 2019, with the theater done by Oct. 31, 2021 and the tower open by Sept. 1, 2022. Mandelbaum Properties will also receive tax abatement and incentives for the other phases.
The complexity of the project, changes in design, and the massive permit and construction documents needed to start construction have caused months of delays. Reasons behind the delay have been the focus of speculation in online forums.
One rumor — that soil tests showed high levels of gasoline and oil from the old parking garage — is simply not true, Mandelbaum said.
"It's a big, complicated development," he said. "But it will be great to get this going."
Meanwhile, plans continue behind the scenes for Blackbird Investments' 33-story Blackbird Tower planned across the street. Blackbird acquired the eastern half of the Kaleidoscope at the Hub, an aging indoor food court and mall, earlier this year. It plans to demolish the building to make way for its tower, which was originally planned for the site of the former Younkers building.
The city has not received updated plans for the new location at 555 Walnut St., Kruse said.