NOTEBOOK: Tower talk
KENT DARR Dec 19, 2018 | 10:30 pm
4 min read time
867 wordsBusiness Record Insider, Real Estate and Development, The Insider NotebookLet’s kick things off by saying there is no fault in changing your mind, not even when you are a city councilman with a voting record. What sounds good one year might seem a little dicey a couple of years down the road.
Case in point is a few minutes of discussion during the Dec. 17 Des Moines City Council meeting. At issue was waiving a few feet of air rights over Walnut Street near Fifth Avenue, where Blackbird Investments has proposed a 33-story tower. A swimming pool would jut out from the building about 33 stories above Walnut, thus the need to waive rights to all of that empty space.
Armed with a recommendation for the city’s Plan and Zoning Commission to waive said air rights, the council took a wait-and-see attitude. The vote was to receive and file the request. It can be taken up at a later time.
What preceded the vote was a few minutes of council chat that seemed a little at odds with the recent history of tower debate in the city.
In its current iteration, the Blackbird tower would have a few affordable apartment units mixed right in with pricey stuff. The pool would be an amenity for all.
A little more than a year ago — Aug. 28, 2017, to be exact — the City Council approved a development agreement with Blackbird for a 33-story tower replete with affordable and high-rate units and a cantilevered swimming pool that would have been located a few blocks west on Walnut from its present proposed location.
A lot of land has passed hands since that time, with Blackbird obtaining the northwest corner of Fifth and and Walnut from EMC Insurance Cos., which picked up Blackbird’s former site at 701 Walnut, at present a hole in the ground left after a fire destroyed the Younkers department store that occupied the space.
The transaction must have jarred the thinking of some City Council members.
During the air rights discussion, Councilman Joe Gatto, who made the motion to approve the previous tower agreement with Blackbird, said he was concerned that “we are putting the cart before the horse.”
His concern was whether Blackbird had the financial wherewithal to pull off the project. In all fairness to Blackbird, the same could be said about a tower project proposed for the southeast corner of Fifth and Walnut. The council has reached a development agreement with Mandelbaum Properties for that project, though there has been no indication to date that the financing is in line for much more than the parking garage that is under construction.
Let’s face it, financing is a complicated issue and it is pure speculation at this point to say that either tower project will one day, dare we say it, tower above the city. The earlier agreement with Blackbird included low-income tax credits and a federal loan program. Since the two projects are strikingly similar, it can be imagined that the new agreement might contain much of the same.
The conversation became a little more curious when Councilman Chris Coleman, part of the 7-0 vote to approve the previous agreement with Blackbird, said he wasn’t sure that including affordable units was appropriate.
“At the risk of sounding snobbish, I’m not sure a lot of citizens would understand city subsidy going into a pool that is suspended 30 stories up,” Coleman said. “It sounds like a luxury that the citizens can’t afford to subsidize.”
There was another concern.
“I’m in support of affordability, but it seems like an expensive feature is out of place in it, especially with city money,” Coleman said. The expensive feature is the pool.
Josh Mandelbaum was not a member of the council last year when it voted to support the Blackbird agreement. For his part, Mandelbaum, nephew and cousin of Mandelbaum Properties principals, said the part of the project he liked the most was its affordable housing.
“The piece of this project that I like the best is that there is significant affordable housing, and the affordable housing component actually goes beyond what a lot of projects have done downtown,” he said. Still, he said Coleman and Gatto’s concerns were “well taken.”
Coleman noted that he thought the city might “get its money’s worth” out of projects with rents affordable to folks who are paid 40 to 60 percent of the average median wage if they were located “in other parts of the city.”
It is worth noting that to find affordable housing in any significant numbers, you have to look outside of downtown Des Moines — south of Southridge Mall, for example, or Historic Fort Des Moines, where Blackbird converted Army barracks and horse stables into 142 affordable apartments.
Councilwoman Connie Boesen, who was not part of last year’s council vote on the Blackbird project, agreed that it would be “premature to vote until we see the entire package.”
The conversation would be moot if, as a prominent player in downtown development recently observed, any of the city’s well-heeled corporate citizens stepped up to enhance the skyline with an upscale tower.
As it stands, Blackbird and Mandelbaum Properties have put their big ideas and reputations up for scrutiny.