Hubbell decides to buy former Riverfront Y site; development plans uncertain
KENT DARR Sep 2, 2016 | 4:08 pm
3 min read time
687 wordsAll Latest News, Real Estate and Development
Hubbell Realty Co. plans to finalize its planned purchase of the former Riverfront YMCA site, sparking new speculation on future development of what is considered the last piece of prime real estate along the Des Moines River in downtown Des Moines.
Hubbell President and CEO Rick Tollakson said that after months of considering various options for the site, which the real estate giant has had under control for more than a year, the company sent a letter Thursday to the YMCA of Greater Des Moines saying that Hubbell would end its due diligence period and planned to close on the deal.
Hubbell first made an offer for the site at 101 Locust St. last year. That option to buy was extended in January and was set to expire this month. In the intervening months, Hubbell had considered a range of designs, from luxury townhomes to a 10-story luxury apartment building. It had been unable to come to terms with the city of Des Moines on a development agreement. Hubbell has had some support for what many considered a modest townhome development that the company said it could build without city incentives. Others were critical of those plans.
In recent months, word had spread that Ryan Cos. US Inc. was shopping various development sites in Greater Des Moines for an out-of-town office user. One of those sites was the Riverfront Y property, Tollakson said.
However, Tollakson said today that a deal with Ryan could not be finalized in the time frame Hubbell was under. Tollakson has said several times that he was “tiring” of the drawn-out process of negotiating a development deal with the city that would generate the type of iconic development that is preferred by city leaders, and by Tollakson himself.
Tollakson has said several times that his “dream” use of the site would be a glitzy high-rise, but he could not justify the financial risk of such a project.
Tollakson said today that several potential users have come forward recently, suggesting that the company still wants to be the developer for the site, which was originally owned by Hubbell patriarch Frederick M. Hubbell. He donated the land for the construction of the Des Moines Coliseum, which existed from 1909 to 1949.
Since first offering to buy the property last year, Hubbell has paid the carrying costs of a $4.5 million loan to the YMCA from West Bank. It is little secret that YMCA officials, as well as the group of business and civic leaders who make up Des Moines Redevelopment Co., want cash for the land.
Des Moines Redevelopment has agreed to pay $4.5 million for the property if a buyer could not be found.
The YMCA needs to clear the loan from its books as it shores up finances and pushes ahead with efforts to raise nearly $10 million for the construction of a 50-meter swimming pool that has been a featured element of the Wellmark YMCA in downtown Des Moines.
Tollakson takes over this month as chairman of the YMCA of Greater Des Moines board, and he is a member of Des Moines Redevelopment.
Dan Cornelison, chief counsel for Hubbell Realty, said today that is was time to take a break from efforts to develop or dispose of the property.
“We’re just taking a pause,” he said.
Matt Anderson, who leads economic development efforts for the city of Des Moines, said Hubbell had delivered a plan that would have provided an “iconic” structure at the site. However, the cost of that proposal was something that neither the city, by way of incentives, nor Hubbell, by way of equity, could afford. Parking was the complicating factor, he said.
If an office user were found for the site, the city would be able to provide more tax increment finance money for the project, Anderson said.
He also pointed out that it is unlikely that Hubbell would have announced its intention to close on the purchase if it had not found a likely user.
As for now, Hubbell’s decision to buy the Riverfront Y site is “a departure from what we had expected,” Anderson said.
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