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Just after completing its project with Wellmark Blue Cross and Blue Shield to relocate small businesses from the site of the company’s new headquarters, the city of Des Moines is ramping up efforts to relocate more than 35 landowners in preparation for extending West Martin Luther King Jr. Parkway across the Des Moines River to Southeast 14th Street.

The city, in conjunction with the Iowa Department of Transportation and Federal Highway Administration, awarded United Contractors Inc. and its team of subcontractors the contract for constructing the Southeast Connector bridge from an area near the intersection of Water and Elm streets (just north of Principal Park) to where Raccoon Street ends east of the river. Construction crews have already begun to move utilities east of the river. Construction on the bridge itself should begin this summer and be complete by spring 2010.

The $49 million project also will extend the road to Southeast 14th Street during the next four or five years, with the long-term goal of connecting to U.S. Highway 65. When complete, the four-lane street will offer on-street bicycle lanes, off-street sidewalks or recreational trails and a landscaped median similar to the current MLK. Funding does not include ramps that will connect to Southeast 14th Street and extending the road past an intersection at Southeast 15th Street.

Standing in the way of the project are several homes, vacant lots and a few businesses that will be forced to move, many by the end of the year. The city is in the process of negotiating a “fair market value” for each property and relocation fees, but it can use eminent domain if it cannot reach a deal because it is a public improvement project, said Pam Cooksey, deputy city engineer.

Since the city started acquiring properties in 2005, it has reached agreements on 22 of the 37 parcels. Its goal is to reach agreements for all of the parcels from Southeast Fourth to Southeast Eighth streets by this summer, which will be the first phase of road construction next spring.

“We’re moving right along,” said Phil Wageman, real estate division manager for the city of Des Moines. “It’s really the property owners who have been very cooperative, and that really is what makes a difference in how quickly things move forward.”

The city has reached agreements on all but one of the residential properties, because owners tend to be attracted to the relocation benefits, Wageman said. Any holdups are usually on the price the city will pay for the land.

A third-party independent appraiser establishes a fair market value for the property from which the city can begin negotiations with the landowner. Homeowners also receive a replacement housing payment, which makes up the difference between their home’s price and the cost to attain new decent, safe and sanitary housing, as well as moving costs. A business receives only the cost of the property and up to $10,000 to pay for relocation costs.

TMC Auto Body and Central Wire and Iron Works are two longstanding businesses that will have to move by the end of the year, along with a few tenants leasing space in parcels owned by Two Rivers Development Co.

TMC has yet to find another location but has reached an agreement with the city for its property. “We’ve known it’s been coming for a long time,” said owner Craig Peters. “So there’s not a lot to do anyway.”

Mark Allen and his brother, Ed, third-generation owners of A.J. Allen Mechanical Contractors Inc. had to relocate to a site in the Southeast Connector district eight years ago, when Indianola Avenue was extended through its property. Though that land now lies on the edge of the new bypass, Allen is confident he won’t be forced to move.

Still, he can relate to the businesses that are having to relocate. “It can be a real financial hardship for multiple years if your business is doing good,” he said. “It’s probably different for everybody that’s had to be relocated. I think we came out OK, but not without tightening our belts and being really pretty worried about it for several years with the added expense of relocating.”

He doesn’t expect the MLK extension to help his business other than making it easier to access his newly renovated headquarters.

The new bypass will have only a small impact on MidAmerican Energy Co.’s service center on the east bank of the river. MidAmerican will lose some storage space on the south side of its complex and access to the property from the south. The company has offered the city space to use during construction.

MLK’s extension could create an opportunity for community and economic redevelopment in an area now filled with industrial businesses, vacant land, vacant buildings and low-income housing.

“It’s huge to make a connection across the river and open up an area for development that hasn’t really had that type of access before,” Cooksey said.

The city planning report “What’s Next Downtown?” completed last year calls this area the “Lower East Village” and suggests mixed-use development and new construction at the waterfront. City Economic Development Administrator Matt Anderson believes that once the extension is complete, the city will go through a planning process to look at rezoning and infrastructure needs as well as a master plan for development.

“There are a number of different smaller landowners down there in the Southeast Connector area,” he said. “We probably envision smaller-scale development, but still aggressive development.”

Mike Kinter and Jeffrey Morgan placed a bet on renewed interest in the area south of the East Village when they purchased a building at 118 S.E. Fourth St. in 2006. With new windows, a roof and updated electric, Kinter Construction moved into the building in April and is trying to lease the rest of the space in it, approximately 25,000 square feet.

With the anticipation of more traffic funneling between MLK and the East Village in a couple of years, Kinter said, “We’ll have tenants by then, but obviously when that goes through, the price goes up.”