A minimum assessment agreement between the city of Des Moines and Wells Fargo for property at 801 Walnut St. is expected to be terminated by the City Council at its meeting on Monday.

Termination of the agreement was requested by a buyer who is under contract to purchase five of Wells Fargo’s downtown properties, according to information provided to the council. The request was made as part of the prospective buyer’s due diligence review of the properties. The agreement must be terminated before the property can be sold. 

The minimum assessment agreement is part of a broader development agreement that was reached between the city and Wells Fargo before the office building was constructed. Under the agreement, the property’s minimum assessment has been $36.69 million. The agreement was set to expire on Dec. 31, 2026.

In January 2023, Well Fargo announced that it was relocating most of its downtown workers to the company’s Jordan Creek campus in West Des Moines. Several weeks later, Wells Fargo listed for sale four downtown office buildings and a parking garage. In early 2024, Wells Fargo sold properties at 7001 Westown Parkway and 1725 68^th St. in West Des Moines and 13733 University Ave. in Clive.  

For the past couple of years, the national financial institution has been downsizing its workforce and shedding its real estate properties. This week, the Wall Street Journal reported that Wells Fargo plans to sell its headquarters in San Francisco.

The properties the prospective buyer has under contract in Des Moines, according to a city document, include:

·        801 Walnut St., which includes a 10-story, 298,882-square-foot office building with about 80 underground parking stalls. The building’s construction was completed in 2005. The property is valued at $36.69 million.

·        800 Walnut St., which includes a nine-story, 328,495-square-foot office building with 50 underground parking stalls. The building’s construction was completed in 2002. The property is valued at $38 million.

·        207 Ninth St., which includes a three-story, 53,868-square-foot office building that was constructed in 1910 and remodeled in 1986. The property is valued at $2.5 million.

·        206 Eighth St., which includes an 11-story, 188,769-square-foot office building constructed in 1984. The property is valued at $12.7 million.

·        800 Mulberry St., which includes an eight-story, 1,625-stall parking garage built in 2002. The property is valued at $10.2 million.

The city document does not include the name of the buyer. Justin Lossner, senior managing director with JLL’s Des Moines office, is the listing agent for the properties. He declined to provide information about the buyer or the buyer’s plans for the property.

A Wells Fargo spokesperson confirmed that the company is working with a single buyer on the purchase of the Des Moines properties. The spokesperson said the company is “making good progress” toward closing the deal in 2025. The spokesperson declined to identify the buyer or say whether the buyer is from Iowa or outside the state.

The city document stated that the buyer’s acquisition of the properties is expected to close in January. The document stated that the city’s economic development office “will work with the buyer to find solutions for reoccupying the office buildings and assess the feasibility of potentially converting two of the four office buildings to other uses.”

Also Monday, the City Council is expected to extend the construction timeline of a $22 million, 108,000-square-foot mixed-use development project proposed on the southeast corner of 25^th Street and Carpenter Avenue across from Drake University. The project was first announced in 2019 and construction was supposed to begin in 2020. Rising construction costs and other pandemic-related issues delayed the project that is being developed by Cedar Falls-based Merge Urban Development.

According to a city document, construction of the project was to be completed by Dec. 31. However, construction has not yet begun because of delays in obtaining construction materials and higher interest rates, the city document stated.

Construction is now expected to begin by March 31 and be completed by Dec. 31, 2026, according to information provided to the council. The project is proposed to include 10,000 square feet of commercial space and 116 apartment units.

The council meets at 5 p.m. Monday in the council chambers at 400 Robert D. Ray Drive.