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Sherman and Associates Inc. continues to assemble land tracts downtown for its newly branded Gray’s Landing and Gray’s Lake Office Park development.

“Significant progress has been made in acquiring the land,” said Jackie Nickolaus, vice president of development for Sherman.

She said the Minnesota-based developer has purchased several parcels in the past year, including the Merchants Transfer complex at 1350 W. Martin Luther King Jr. Parkway, the Keck Oil Inc. building at 320 S.W. Ninth St., and two contiguous properties formerly owned by Jen-Weld Inc. at Southwest 14th and Market streets.

Sherman is in the conceptual development phase of the project, which includes a residential and commercial component south of West Martin Luther King Jr. Parkway between Southwest Ninth and Southwest 11th streets downtown.

Sherman was selected as the master developer of the area about four years ago. At that time, several businesses, including Ryan Cos. and Rottlund Home Builders, were considering a partnership with Sherman to handle the land development and residential components. It was thought that the residential element would go up first. As the housing market waned, however, Rottlund’s and Ryan’s involvement in the project faded, leaving Sherman as the sole developer.

A development agreement between Sherman and the city of Des Moines, laying out the contractual requirements of each party, was signed in October 2007.

“We are master developing about 125 acres,” Nickolaus said, including Gray’s Landing, the 70-acre residential portion located west of Southwest 11th Street and south of Tuttle Street, and an approximate 50-acre commercial component, Gray’s Lake Office Park, which runs along Southwest Ninth Street and West Martin Luther King Jr. Parkway.

Formerly known as RiverPoint West, the new development is in the process of being rebranded, Nickolaus said, adding that the Gray’s development has a much different design and “feel” than RiverPoint, which is primarily a single-story office park development.

“The hope is someday it is more commonly known as Gray’s Lake Office Park,” she said.

Hubbell Realty Co., which has long had a presence in the area, sold a 15-acre parcel along Southwest Ninth Street south of Tuttle to Sherman this summer, trimming its stake in the undeveloped property to approximately 12 acres.

Hubbell spokesman Jarad Bernstein said his company has retained about 12 acres of land between Southwest 11th and Southwest Ninth Streets extending north from DART Way to Murphy Street where it plans to build three single-story flex-space office buildings totaling about 145,000 square feet.

Hubbell is in the process of cleaning up the former Pittsburgh-Des Moines Steel Co. plant site in preparation for the eventual development, Bernstein said, adding that the company is waiting for market demand to pick up before getting started.

Though all the land has not yet been assembled, Sherman is working toward buying out the remaining property owners.

“We’re down to a handful of landowners right now,” Nickolaus said, adding that Sherman has several purchase agreements in place and continues to negotiate deals.

The developer also has the option to purchase two parcels the city put together for the Martin Luther King Jr. Parkway extension. The city wanted to make sure the developer was pursuing the acquisition of other parcels in the area that were “more difficult to acquire” before making city-owned land available for purchase, said Matt Anderson, Des Moines’ economic development administrator.

“The next step in dictating when we purchase the land,” Nickolaus said, depends on when a developer is ready to build or a third party comes forward to purchase an office building.

“We will buy the land in advance of a development project on the site,” she said.

Delaying the purchase of the seven acres from the city is beneficial for both parties, Nickolaus said. As long as the property is held by the city, Sherman doesn’t have to pay taxes or maintain the land, and the city can generate revenue by continuing to lease out a surface parking lot.

Nickolaus, who has been working on the development in some capacity for five years, said there has also been some discussion with city planners about an overarching planned unit development (PUD) for the area.

“The first PUD will go hand in hand with the first building development,” she said.

Sherman adopted a cautious approach to the development of the property this past summer due to the economic downturn, but is now considering breaking ground on the site’s first commercial building within six months, most likely a hotel that the company would develop and own.

A corporate campus is also a possibility, said Rob Kost, vice president of Sherman’s commercial division. The site is poised to incorporate a larger office building as well, Kost continued, adding that the amount of space and parking options available “allows that type of product to be downtown.”

Kost said that the primary focus up to this point has been the design of Southwest 11th Street and preparing “adequate development pads” for buildings to be constructed on.

Talks are also continuing with retail, office and hotel developers who might be interested in locating in the area.

“We have had interest from other hotel developers,” Kost said. “It appears there is some traction on the hotel … people are looking at it.”

Another key factor in moving the project forward is the development of the infrastructure, including a master drainage plan. To offset a negative soil balance, Sherman has an agreement with several local excavating companies to store dirt on its site, including soil from the site of the new Wellmark Blue Cross and Blue Shield headquarters.

Construction of the roads is also vital, Nikolaus said, adding that “a major access road is integral to the development.”

Beginning next spring, Southwest 11th Street, which currently extends to Tuttle, will be extended to DART Way.

“There is a cost-sharing agreement between the city, Hubbell and Sherman” for the Southwest 11th Street buildout and the design of a smaller section of Murphy Street, Anderson said.

The basic infrastructure, including some sewer work, will be paid for out of Sherman’s master development budget.

“It is that infrastructure that allows Sherman to develop the land,” Anderson said. “That is really the kickoff of the first part of the development.”