Des Moines official: Building proposed multiuse stadium on old Dico site creates opportunities for other development
‘We get excited about what that can do,’ city official says
KATHY A. BOLTEN Oct 2, 2020 | 5:14 pm
5 min read time1,212 wordsAll Latest News, Law & Government, Real Estate & Development
The former Dico Inc. site is being proposed to be redeveloped into an outdoor entertainment area that would include a stadium for soccer and other events. The site has been unused for 25 years. Photo by Duane Tinkey
A proposal to move a multiuse stadium about two blocks west to the former Dico Inc. site would allow additional commercial development to occur on the venue’s original site just south of downtown Des Moines, a city official said.
In addition, developing the venue’s original 9-acre site would generate additional taxable revenue for the city and other government entities, Matt Anderson, Des Moines’ assistant city manager, said.
“What this does for us and Krause [Group], it opens up their existing parcel for more commercial and taxable development,” Anderson said. “They can take those acres and build more offices, hotels, residential – whatever fits into their master plan.
“We like the idea of improving the density there.”
On Thursday, Des Moines released a letter from Krause Group offering to partner with the city to redevelop the 43-acre toxic site that once was home to Dico, a closed manufacturing plant. Krause, along with Iowa Soccer Development Foundation Inc., wants to help redevelop the site into an outdoor entertainment area that would include a stadium for soccer and other events, according to the letter.
“We aim to create an activated district that spans the entire year with sporting events, concerts, street festivals, and further connects downtown along the MLK Jr. Parkway corridor,” Gerard Haberman, Krause Group president, wrote in the letter to the city.
“Our intent is to develop this site and the surrounding district to include various uses designed to improve the experience on the Raccoon River and activate a portion of Des Moines that is primed for an economic boom,” he wrote.
In 1983, the Dico site at 200 S.W. 16th St. was added to the Environmental Protection Agency’s Superfund list.
For the past 25 years, the property has been unused as owner Titan International Inc. fought the federal government over the cost to clean it and other issues. In September, Des Moines officials announced that the city would take ownership of the site, which is east of the Raccoon River and south of Martin Luther King Jr. Parkway.
However, before any development can occur on the ground, the EPA and the city must complete the planned site remediation, a process that could take a year or longer, Anderson said. The work includes tearing down dilapidated buildings and moving and updating equipment that monitors contamination levels in the ground and adjacent Raccoon River.
As the remediation is occurring, Krause Group will need to find a location on the site where the stadium can be built, Anderson said. “They are going to have to figure out if there is a large enough area with a low enough level of contamination that they can put their footings and infrastructure in without disturbing a whole lot of the soil.”
Krause Group, in its letter to the city, said it would like to begin construction of the multiuse stadium by late 2021. It needs to complete construction of the stadium in time to meet deadlines set by the United Soccer League, which will ultimately decide if Des Moines will be allowed to have a franchise team.
Kyle Krause, chairman and CEO of Krause Group, has been working for more than a year to bring a USL team to Des Moines. He has owned the Des Moines Menace for 25 years.
If the site can’t be readied for redevelopment in time to meet deadlines for completion of construction of the stadium, then Krause Group will likely build the stadium on the site it already owns, Anderson said.
Officials from Krause Group were not immediately available for comment.
Land already owned by Krause Group
In September 2019, the Krause Group unveiled plans to build a 6,000- to 8,000-seat multiuse sports stadium along Southwest 14th Street south of Martin Luther King Jr. Parkway. The proposed development – an open-air sports and entertainment venue and a street-level plaza –was valued at $60 million.
Last December, a Krause Group subsidiary, Blackacre Development LLC, bought 9 acres along Southwest 14th Street south of Martin Luther King Jr. Parkway for its proposed sports and outdoor entertainment venue. Also in 2019, Blackacre bought 3.4 acres at 315 S.W. 14th St.
Construction of the event venue was to have begun this fall with completion by mid-2022. However, plans were delayed because of the outbreak of the pandemic. Krause in May said the venue would open in March 2023.
In addition to the stadium, Krause proposed the construction of a 500-vehicle parking ramp, restaurants and a five-story, 150,000-square-foot mixed-use retail and office building.
In May, Krause said the parking garage was still planned but other pieces of the development were being reconsidered. “We need to see what happens in real estate in Central Iowa because of the coronavirus – what shifts occur,” he said in May.
In the letter to the city, Haberman wrote that if the stadium is constructed on the former Dico site, “we will continue building office space, retail and housing” on the Krause Group-owned land along Southwest 14th Street.
Moving the stadium to the Dico site “frees up Krause’s existing stadium site for more taxable development,” Anderson said. “You’re driving more tax increment, putting more people there. We get excited about what that can do.”
Development south of M.L. King Parkway is already underway.
Hubbell Realty Co. is developing Gray’s Station, an 84-acre, $250 million project that includes apartments, townhouses, condominiums, single-family residences, and commercial space. Gray’s Landing, a development by Minnesota developer George Sherman, includes residential, office, commercial and hotels.
“Redeveloping the Dico site into a useful area will be a much-welcomed sight and will only benefit the redevelopment of this region of downtown,” said Claire Brehmer, Hubbell spokeswoman. “This project has the potential to be a fantastic local, regional and national draw to downtown Des Moines for visitors, employers and Iowans.”
Ownership of Dico land
The city of Des Moines doesn’t yet own the former Dico site. It likely won’t take over ownership until after the site is cleaned, Anderson said.
If Krause Group does develop the multiuse stadium and accompanying amenities on the former Dico site, the city would likely enter into a long-term lease agreement with the developer, Anderson said.
“That’s one of the things we haven’t figured out yet,” he said.
Anderson said Krause Group hasn’t yet determined how much land they need for the development. Any remaining acres could be used by the city for parking, green space or other uses, he said.
“Due to ongoing monitoring, maintenance and reporting requirements, we will likely not sell any portion of the site,” Anderson told the Business Record. “Never say never, but that’s not our intent at this point.”
The City Council at its Monday meeting is expected to receive and file the letter from Krause Group and direct the city manager’s office to begin discussing details of the proposed project with the developers.
View an aerial drone video of the former DICO site
Krause Group offers to help city redevelop contaminated site south of downtown Des Moines
City officials growing impatient over slow pace to clean up contaminated 40-acre site