Development Up in Downtown Des Moines, but Retailers Not Biting Just Yet

DES MOINES, Iowa – Real estate professionals may tell you there are plenty of signs development for downtown Des Moines is on the rise, but that doesn’t seem to change the fact that developers are still struggling to entice retailers to open up shop there.

Take the East Village, for example, where one of the most significant development projects of downtown Des Moines is underway; Hansen Real Estate Services has their sights set on a $49 million complex spanning the entire block of 201 E. Locust Street, where, by 2016, they say apartments, a hotel, and a parking garage will reside. One thing that won’t be there, though, is Starbucks.

The original development plan included retail space on the first floor of the complex, at each corner of the block. Hansen Real Estate was pursuing Starbucks to invest, but the company recently declined. That’s when the developers said they’ll be cutting all retail space from the complex.

“It needs the critical mass, the density, the number of people,” said Troy Hansen, President of Hansen Real Estate Services. “Downtown and the East Village are two very different areas. The East Village attracts a lot of mom-and-pop retailers, and the national retailers, they need the density and the rooftops to be down here in order for them to consider this area first.”

Hansen says the development project is still a go, and would be a huge addition to the East Village; projects like this one, he says, are how the downtown district will reach that critical mass necessary for big-name retail.

“The project is progressing, and doing great,” he said. “It’s going to be a great opportunity for the city of Des Moines. When it’s all said and done, we’re going to have about 367 rooms in this development, so there’s going to be about 400 people and families at this block in one time.”

He added the current  small, mom-and-pop shops established in the East Village simply don’t need extra space than what they currently have. New retail spaces, then, wouldn’t entice these stores, either.

National names are still a rarity for the East Village, with Jimmy Johns and Fleet Feet Sports being among the few to invest int he area. Lululemon Athletica, a national athletic apparel chain, is moving its East Village store to the Jordan Creek Mall in West Des Moines.

While the lights are green on Hansen’s end, the City Council still has to approve the proposal in September. The council has to determine if the project should move forward, and if it deserves a $5 million subsidy from the city (a common standard for development projects downtown, generated from the project’s future property tax revenue). The project was submitted before the city’s Urban Design Review Board on Tuesday to mixed reviews; one-half of the six-person board did not want to recommend the project for approval by the council based on the loss of retail space, while the other half still supported the plan.

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