At Hubbell Realty Co., there is more fight than fold in a conflict with the federal government over what many believe is the prime piece of development ground in all of Iowa, and certainly in Des Moines.

Problem is, as a legal expert points out, it’s difficult to beat the feds when they’re intent on a land grab. The turf war, judging by a similar conflict over location of an annex to the federal courthouse in Norfolk, Va., is for the price of the land.

“I don’t see any impediment to them getting the property if they really want it,” Jerry Anderson, dean of Drake University Law School, said. He points to the Norfolk case in which the feds got the land as evidence. 

Still, Jim Hubbell, chairman of the company’s board of directors, and Rick Tollakson, its president and CEO, say the company will fight for the right to develop the two acres at 101 Locust St., former home of the Riverfront YMCA and in the early 1900s a piece of land that company patriarch F.M. Hubbell gifted to the city for development of a coliseum.

“We’re developers,” Hubbell said, adding that the company will take its case to federal courts if need be, where, he acknowledged, the fight could be in vain. “But you should talk to Rick, he’s more quotable.” 

“We’ll fight them tooth and nail,” Tollakson said.

The company is committed to a $75 million condominium project, Tollakson said, conceding that it will be difficult to win development rights, given that the U.S. General Services Administration has said twice that it is committed to building a $140 million courthouse on the same spot.

Other than a few emails, Tollakson said there has been little real negotiation with the GSA over a purchase price for the land, although some mention was made of the $5.2 million for which Hubbell has agreed to sell the property to the city just in case it did not come up with a development plan. 

As it is, Hubbell unveiled plans Monday for three seven-story buildings with room enough for 115 condominiums priced between $500,000 and $1.5 million. The average unit would touch 1,400 square feet, but Tollakson said the potential condo buyers he has talked to are more interested in a minimum of 2,000 square feet.

One thing to like about the plan, though the renderings for the site are eye-pleasing as well, is that a Hubbell development would generate property tax revenue. A federal courthouse will not.

If 115 million condos are sold at a price of $1 million, they would generate a touch more than $3 million a year in property tax revenue. For the time being, the property has been back on the tax rolls since Hubbell bought it in October 2016. To date, Hubbell has paid $97,702 and is on tap to pay $197,422 in 2018-2019 taxes. The property has increased in value since Hubbell bought it, rising in value to $4.4 million from $3.2 million, according to Polk County property records.

Those numbers, as well as a private development’s presumed ability to generate additional economic activity, have many downtown observers scratching their heads about the GSA’s commitment to — some might say obsession with — the site.

One the other hand, who can blame the GSA and the federal judges it represents for wanting a site with riverfront views? Click here to read the 158-page GSA analysis of the Riverfront Y location and three other potential sites for the federal courthouse. 

This is where the GSA’s ability to use eminent domain to seize development ground it fancies comes into play. Drake’s Anderson pointed the Business Record to a ruling in a federal court case out of Norfolk.

Before the Great Recession, a Norfolk developer announced plans for a 31-story luxury condominium tower near the city’s federal courthouse. The government said it was not interested in the property. The developer started pre-sales of the units, secured preliminary financing, hired Turner Construction to manage the project.

After pilings to support a high-rise were in the in the ground, the GSA changed its mind, started condemnation proceedings, and the case went to court in 2010 as “U.S. v. 1.604 Acres of Land, More or Less …”

A pretrial ruling in 2011 made it clear that the property owner would have little luck fighting the condemnation. However, a jury trial resulted in an award of $13.4 million for the value of the land. The GSA’s final offer had been $9.4 million.

When asked this week about taking the Riverfront Y property through eminent domain, the GSA responded only that it remained in negotiations.

Don’t expect those talks to be easy. Both sides plan to start construction in the spring.