BEST CITIES: West Des Moines
West Des Moines’ standards sometimes irk developers, but have paid off in growth
Friday, July 26, 2013 7:00 AM
The economy was nudging its way out of the Great Recession three years ago when a couple of development announcements went off like fireworks over West Des Moines.
Knapp Properties Inc. and Buyers Realty Inc. had succeeded in bringing a Trader Joe’s grocery store into the Galleria shopping center on Mills Civic Parkway. West Des Moines became more than a model of growth. Now it was hip.
A few months later, Microsoft Corp. announced that it would build a data farm a few miles south and west of Jordan Creek Town Center and the Wells Fargo & Co. campus, both of which stand out as examples of the city’s aggressive and successful approach to economic development.
The groundwork for all those business developments was laid a decade earlier, when the city spent millions of dollars building streets and running water and sewer lines west of Interstate 35/80 into what was several hundred acres of farmland.
It was the city’s first and only full-blown economic development incentive, and the money was spent to accommodate Jordan Creek Town Center. That $100 million in streets and sewers led to around $2 billion in taxable valuation in the Jordan Creek area alone.
“It helps to have an economic development plan that anticipates the future,” West Des Moines Mayor Steve Gaer told the Business Record after the Microsoft and Trader Joe’s announcements.
That $100 million bet also led to more creative thinking.
When Wells Fargo decided to build a corporate campus on Mills Civic, West Des Moines leaders came up with a unique twist on tax increment financing that had been used by communities for decades to spur growth within their borders.
The West Des Moines twist is this: If the developer of a large commercial project will agree to a minimum property tax assessment, the city will build streets and other infrastructure, use the increase in property taxes from improvements on the property to pay off the bonds used to build the infrastructure, then issue a property tax rebate to the developer, but not until the bonds are retired.
The plan was used for Wells Fargo and Aviva USA, then for Microsoft. It continues to be used for select projects. Both Wells Fargo and Microsoft will use it for recently announced expansions.
Clyde Evans, the city’s director of community and economic development, said West Des Moines’ “plan for the future” development approach has resulted in a balance of commercial and residential growth.
“One of our hallmarks is that we have very high development standards and have had for a long time,” he said.
Some of those standards can be onerous. A land deal between Gary Kirke, one of the key developers of the gated Glen Oaks Country Club and residential community and West Glen Town Center, both on Mills Civic, and Richard Hurd, who has built a small real estate business into one of Greater Des Moines’ key development companies, has been held up because of the city’s use of a national traffic count standard that would limit the planned use of the land (a convenience store) because of the traffic the business would generate. The standard is used for commercial and residential areas and is extremely nuanced, taking into account traffic generated by certain classes of development, townhouses, residences, convenience stores and banks, for example.
Evans said commuters “don’t like to sit in traffic.”
West Des Moines city officials can be unyielding, no matter the size or perceived influence of the developer. A proposed hotel at Jordan Creek Town Center has been blocked by the city’s insistence that the mall owner allow a connector street within the mall to be built near a retail development that Hurd has underway.
On the connector street, Evans said the city decided that it was time to stand its ground on upholding its desire to ease traffic flow in and around large projects.
West Des Moines is not suffering as a result of its insistence on following certain planning principles, though.
“We’ve gotten to the point where we don’t have to badger somebody in order to get a really nice project out of them,” Evans said.
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