The city of Des Moines can purchase a beleaguered downtown parking garage located at Walnut Street and Fifth Avenue, a Polk County District Court judge has ruled.

The structure has been at the center of two court proceedings: a foreclosure petition and a claim by the parking garage’s original developers that the city reneged on its development agreement with them.

Earlier this month, the city offered to buy the 751-space garage for about $40.6 million. The purchase price is dependent on the final tabulation of interest and fees.

Bankers Trust Co., which provided a construction loan for the garage, filed a foreclosure petition in Polk County court last fall alleging that 5th and Walnut Parking Garage LLC and Justin Mandelbaum and Sean Mandelbaum, the project’s developers, were in default of the loan that was due to be paid off on Aug. 31. 

The parking structure was part of a $200 million multipiece development planned by the Mandelbaums that was to include a 40-story tower with luxury apartments and hotel, and a five-story commercial building with a movie theater and restaurant. 

The City Council in 2015 had selected Mandelbaum Properties as the preferred developer of the then-city-owned land located east of Fifth Avenue between Walnut Street and Court Avenue. 5th and Walnut Parking Garage, managed by the Mandelbaums, purchased the property in 2018.

The council on Monday is expected to vote to purchase the garage, a move that would return the property to city hands. A deteriorating city-owned parking garage previously had been located on the site.

In his ruling, Judge Lawrence McLellan also ordered Bankers Trust to dismiss its foreclosure petition once it has received payment for the garage from the city. 

The city previously had asked the court to dismiss the Mandelbaums’ counterclaim alleging the city reneged on its development agreement. The court has denied the city’s request.  

Related articles:
Des Moines offers to buy parking garage property in foreclosure
Developers of the Fifth seek $101 million in counterclaim against city
Bankers Trust files foreclosure petition on parking garage