.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} A major new office building will open in Des Moines in 2008, at least a few more residents are almost certain to move downtown, West Des Moines hopes to continue its impressive growth and other suburbs have big projects in their sights, too.

On the other hand, factors beyond our control could land a few punches in the next 12 months. The ones we know about include the credit crunch, the election and the farm economy.

Nationally, analysts are cautious but not gloomy. For example:

• Wells Fargo & Co. economists said this month that an economic slowdown is likely, but that credit worries are overblown and that the U.S. economy will not topple into a recession.
• Construction put in place is expected to grow by 5.8 percent next year after a decline of 3.7 percent in 2007, according to the “2008 U.S. Construction Overview” report.
• Forrester Research Inc., a Cambridge, Mass.-based research and consulting company, has lowered its growth expectations for U.S. investment in information technology hardware and software to 5 percent from 8 percent.
• The nation’s restaurants are expected to bring in $558 billion in sales next year, up 4.4 percent over this year, according to the National Restaurant Association. That’s slightly less than the growth rate in 2007.
Local observers like to say that Central Iowa’s economy is insulated from the problems caused by tightening credit elsewhere. However, “nobody’s fully immune from the impact it’s going to have,” said Don DeWaay, CEO of DeWaay Capital Management. “Some banks are going to feel some pain, because they got a little aggressive in their practices. That’s going to happen even in stronger economic areas.

“It’s fairly obvious when you look at residential that things have slowed down quite a bit. Not as many people are deciding to build or upgrade. Generally people are a bit concerned about their futures personally, and that can’t help but have some impact on the local market.”

Commercial real estate has stayed strong here, however, and brokers say they’re confident that the trend can continue. A housing slowdown might tap the brakes on some smaller commercial projects, but “the biggest projects won’t be affected,” said Gerry Neugent, president of Knapp Properties Inc.

“I’ve had some concerns that we were near a bubble in Des Moines in terms of being overbuilt in retail,” said Kevin Crowley, chief operating officer at Iowa Realty Commercial. “The national trend tells me I’m worried about nothing. We’re going to continue to see retail growth, because retail follows where there’s job growth.”

The Davis Brown Tower will add office space, retail and parking downtown at 10th and Walnut streets. Principal Financial Group Inc. is adding a sizable day-care center and parking garage to its campus as it adds staff. Buildings are under construction in the East Village, too, and Hubbell Realty Co. has started to rent apartments in a new building at the intersection of Fourth Street and Court Avenue.

Demolition at the Riverpoint West site is scheduled to begin in ’08, the first step in a project that’s expected to place a suburban-style development at the edge of downtown.

In West Des Moines, Ryan Cos. will start construction of Jordan West Office Park, work will continue at West Glen Town Center and the Village at Ponderosa, and that’s probably not all.

“If we land the projects that we’re working on right now,” said Clyde Evans, director of community development, “we’ll beat $146 million in value.”

Who will win?

As Iowans know only too well, there’s a presidential election coming up next November. There are various theories about how the outcome might affect the economy.

“Typically what happens during an election year is the economy usually gets better,” Evans said.

The question is, will Americans be reassured? “When you get to an election year, sometimes people get nervous and sit tight,” said Steve Franklin, chief planner for the city of Urbandale. “My gut feeling says people are going to sit tight and see what’s going to happen with the election.”

The ethanol factor

The state’s economy remains tied to the fortunes of agriculture, and a lot could happen in that sector this year. As ethanol and biodiesel plants have proliferated, prices have soared for grain and farmland, creating good news for crop farmers, problems for livestock producers and possibly an unstable situation.

“I grew up in Rock Rapids,” DeWaay said, “and I still remember banks around the state lending aggressively in the late 1970s and early ’80s,” which led to a farm crisis. “At the end of the day, the kind of things people were saying back then are the same things they’re saying today.”

Iowa farmland has sold for as much as $8,000 an acre in recent months, and DeWaay said, “I think it’s not rational, to say the least. Anybody who pays that much for agricultural ground, at best their returns are going to be modest, at worst they’re going to lose a lot of money. But there hasn’t been such an aggressive use of debt in this latest price run-up. In some cases people are paying ridiculous prices for farmland, but at least they’re not using wholesale amounts of debt.”

Transportation plans

The Des Moines Area Metropolitan Planning Organization will spend much of the year planning future projects. “We won’t see any major (transportation-related) construction in 2008,” said Tom Kane, executive director of the MPO. “I think this go-round we will be evaluating adding lanes, roads and interchanges, but I think there will be a more balanced view of the transportation system. We need to ask, how do we take care of our existing system? Government here is in the same situation as state DOTs across the country, simply looking for money to maintain the system, plus how much more new infrastructure can you build?

“In the future, it’s going to be much more rigorous to get new interchanges on the interstates,” he noted. “In the long-range plan, and I’m just speculating here, I do not suspect we’re going to have more interchanges than we currently have proposed.”

Central Iowa’s growth has put its project proposals into a new category, Kane said.

“We’ve reached a new threshold,” he said. “The Federal Highway Administration is going to expect improvements to interstate capacity at the same time as the building of new interchanges. It’s the first time we’ve run into this in the metro area.”