Krause Group has expanded its real estate holdings in downtown Des Moines’ Western Gateway with the purchase of a century-old three-story brick building immediately south of the popular John and Mary Pappajohn Sculpture Park, Polk County real estate transactions show. The property at 1440 Locust St. (pictured) includes 3,600 square feet of commercial space and 37 apartments. Hubbell Realty Co. bought the building in 2005, redeveloping it in 2013 and 2014. Krause Group, through its 1440 Locust Street LLC, bought the building on Jan. 31. The company paid $6.38 million for the building that was constructed in 1916, records show.
“It’s a great building and the sort of development, redevelopment we want to see in the Western Gateway,” wrote Ariel Rubin, spokesperson for Krause Group, in an email to the Business Record.
In fall 2018, Krause Group, which owns and operates Kum & Go convenience stores and other Krause-affiliated businesses, moved into the Krause Gateway Center at 1459 Grand Ave. As planning and construction of the company headquarters was underway, Krause Group began buying adjacent properties, amassing about 5 acres, Polk County real estate transactions show.
Until recently, company officials had been silent on plans for the properties that had been bought west and northwest of Krause Gateway Center.
“This is an area that can really use redevelopment,” Gerard Haberman, president of Krause Real Estate Group, said about property located roughly between High Street and Grand Avenue on the north and south and 15th and 17th streets on the east and west. “There was not a master plan in place when all of those individual buildings were [constructed] over the decades.
Since 2014, the Krause Group has bought 11 properties near its new corporate headquarters at 1459 Grand Ave. The map shows the properties owned by Krause Group; when the buildings were constructed; the buildings’ value; and how much the Krause Group paid for the buildings. The information was obtained from the Polk County Assessor’s website. To see detailed map information, click here.
“Now we have the opportunity to come in and start fresh with a new master plan,” Haberman told about 50 people at a recent Urban Land Institute-Iowa presentation
Krause official says development ideas are ‘very preliminary’
In all, Krause Group, through several limited liability companies of which it is the sole member and manager, has spent more than $14.47 million to purchase the 10 properties east and northeast of its headquarters, records show.
Rubin, in an email, wrote that a final master plan for the area would likely be completed in 18 to 24 months. The timing depends on the 6,000- to 8,000-seat multiuse sports stadium Krause Group has proposed building along Southwest 14th Street south of Martin Luther King Jr. Parkway.
Haberman, in his recent presentation, provided the first glimpses into what Krause Group leaders are considering including in the nearly 5 acres the company owns near its downtown headquarters. “This project is about the future,” he said, cautioning: “It’s very preliminary.”
The area could likely include housing, boutiques, restaurants, offices and possibly a hotel, Haberman (pictured) said during the presentation. He described developing a new neighborhood that connects with the Sherman Hill Neighborhood to the north and Western Gateway and Pappajohn Sculpture Park to the south.
The new neighborhood would likely have a range of housing options; be pedestrian- and bicycle-friendly; include green spaces; and have architectural designs that are appealing yet sophisticated, Haberman said.
Kyle Krause, chairman and CEO of Kum & Go and Krause Group, wants real estate to be a part of the Krause legacy, Haberman told the group.
The company’s headquarters, designed by award-winning architect Renzo Piano, is an example of the “kind of passion that Kyle has for real estate, for the city of Des Moines and Central Iowa,” he said.
Future of Jefferson, Butler buildings
Among the properties owned by Krause limited liability companies is the Jefferson building at 1519 Grand Ave. The four-story masonry structure was built in 1915 and includes more than 70 one- and two-bedroom apartments. The building could be renovated, Haberman said.
Officials with Krause Group also want to try to keep the Butler building at 1501 Grand Ave. that is home to the popular Gas Lamp music venue, he said.
The building that houses Sherman Williams Paint will likely be razed, he said. In addition, office buildings along the north side of Ingersoll Avenue between 15th and 16th streets will likely be torn down as part of the development plan. Rubin, in an email, wrote that Krause Group is considering various options with the building that previously housed the former Crescent Chevrolet at 555 17th St.
“We are looking at options that include keeping some or all of the Crescent building,” Rubin wrote.
Envisioned in the area have been outdoor green spaces and places to play as well as an “eater-tainment concept,” Haberman said. He said discussions have taken place about ways to use water and art “to draw people through [the new neighborhood] but also have a place for people to stay.
“We want to be connected to the fabric of the city and not just be an isolated development.” Also in the area, “we see anchors, like maybe a hotel, that can also serve [UnityPoint Health – Iowa Methodist Medical Center] but also serve this area,” Haberman said.
Krause Group controls most of the parcels east and northeast of the Gateway Center. Officials are considering acquiring other properties that “will potentially enhance the overall master plan and development,” Rubin wrote.
Krause Group will be the developer of any projects in the area, according to Rubin. He wrote that there is not a definitive timeline for when the first project could get underway or what the project would be.
Asked what the area could look like in five years, Rubin wrote: “It depends on market conditions and stadium timing – but typically on this type of project you would see demolition, grading infrastructure, utilities and initial constructions of one or more buildings.”
