WB Realty Co. and West Des Moines Water Works have reached an agreement that will allow water service to be connected to an industrial building in the developer’s South Branch Business Park, which is located near Purple Martin Lake.

The lake has been identified as a potential future water source for the utility, and the utility is taking action to protect it. At the same time, water quality and conservation have become a “hot-button” topic among the development community as it looks to navigate water quality issues with the continued growth across the metro.

Negotiations

The West Des Moines City Council approved the site plan for the 78,000-square-foot WB Realty warehouse in December with discussion of possible conditions placed on the site and potential easements to protect nearby water sources.

Talks between WB Realty and the West Des Moines utility had been underway but appeared to hit a snag during a March 23 meeting of the West Des Moines Water Works board where utility leaders outlined the requirements the developer would need to meet in order for water to be connected, including the creation of easements to protect Purple Martin Lake.

During that meeting, Ryan Wiederstein, owner of WB Realty, said he paid a $224,000 connection fee to have water brought to the site at 42nd Street and Army Post Road, and he called it a “reach” for the utility to tie land use restrictions to providing water service.

“We step into these deals with the city with full belief that we’re going to be serviced by the city when we come in with a development,” he said at the meeting. “The fact that we’re here today sets almost a precedent for every other developer that steps into the city to do work that they could be in the same position if they’re near a water source.”

“I’m frustrated,” he said. “This is going to be a $65 million development by the end of 2028. We have another project planned next year [on the site] and a project after that, so this has to move forward.”

He said the first building was constructed in the business park in 2023 without any issue.

“What we are building here is the exact same building that was right next door,” Wiederstein said. 

He called the delay in providing water service a “hurdle” that could have an economic impact on the development if water was not connected by April 1.

Wiederstein said those “damages” included additional costs that WB Realty would incur if contractors were not able to do their job because water had not been connected to the building, Wiederstein said.

He also said a prospect for the warehouse wants occupancy by June or sooner, if possible, but that signing a lease could be affected by the delay in connecting water to the site.

“If that lease is impacted by my ability to get water to the site, that is going to be a massive amount of capital that’s going to be lost on this project if I can’t fulfill that lease demand,”  Wiederstein said at the March meeting.

During the March 23 meeting, Christina Murphy, general manager of West Des Moines Water Works, said easements were necessary to protect Purple Martin Lake.

“We don’t want to jeopardize a potential backup water supply or one that can be used to offset nitrates,” Murphy said. “We need to have all options available to use for water supply to our customers, so we’ll continue to work toward a resolution.”

The agreement

Subsequent meetings resulted in the agreement that was signed April 1 by Wiederstein and Murphy.

According to the agreement, WB Realty agrees to three easements to help protect Purple Martin Lake.

The first easement will grant West Des Moines Water Works the legal authority as required by the Iowa Department of Natural Resources to create a 400-foot setback from the edge of the lake inland. The easement addresses restrictions on the application of lawn chemicals and the posting of “no spray” signs in the easement.

The second easement grants the utility access to build, install and maintain storm water improvements within the current or future retention ponds.

The third easement restricts certain uses of the entire 41-acre site by WB Realty and tenants of the buildings.

According to the agreement, restricted uses are the mixing, manufacturing, packaging or storage of fertilizers, the manufacturing of rubber and plastic parts, although storage and distribution of finished rubber and plastic parts that are manufactured elsewhere will be allowed.

Other restricted uses include fuel storage and production, farm supplies production, although supplies used in the operation of a business will be allowed in limited quantities. Restrictions identified in the agreement also include convenience stores, garment pressing and agents for laundries and dry cleaners, and golf courses.

Murphy and Wiederstein both emailed statements to the Business Record after the agreement was signed saying they appreciate the ongoing dialogue that resulted in a deal being reached.

“The productive conversations with WB Realty will ensure that we can continue to protect Purple Martin Lake as a future water supply source for Central Iowa Water Works and WDMWW customers as well as provide a path forward for WB Realty’s development,” Murphy said in her statement.

Wiederstein said WB Realty was continuing to work “through the easement language while awaiting appraisals from WDMWW to better understand the potential impacts and ensure any agreement is fair and balanced.”

Wiederstein said the steps outlined in the agreement are important, but that it’s critical that the agreement reflects responsible water protection and “the fact that South Branch Business Park is an already approved and vested project.”

He said WB’s focus continues to be supporting “thoughtful and effective” water quality protections, ensuring easements are reasonable and appropriate, and the continued economic development benefit to West Des Moines.

“We remain committed to working collaboratively and in good faith, and we are optimistic that a solution can be reached that serves both the community and property owners fairly,” Wiederstein said.

In emailed responses to additional questions, Murphy said a proposed development in the area in 2024 raised awareness about potential uses and their ability of the lake to be a water source and the ability to protect it. Those concerns caused the developer to choose another location.

After that, West Des Moines Water Works began a water source protection plan for Purple Martin Lake and other source water lakes in West Des Moines. Murphy said that study is almost finished and will outline uses that are of the most concern and action that could help mitigate the concerns and protect water sources.

“What we are doing with the easements with this development follows those guidelines,” Murphy said.

She said the current warehouse development is within the 400-foot distance where the DNR requires restrictions.

Matt Dvorak, source water protection coordinator for the Iowa Department of Natural Resources, said the 400-foot setback around a water supply is “pretty restrictive on what you can do within that 400-foot zone of control.”

“That is required by law and anything within that zone is very restricted as it is considered the most sensitive area,” he said.

Dvorak works with communities to develop source water protection plans to identify and help mitigate potential risks to the state’s water supply.

While he sat on the group that helped West Des Moines Water Works develop and make recommendations for its source water protection plan, the utility hired a third party to write the plan and Dvorak said he has not seen a final draft of the document.

He said source water protection plans may contain recommendations for ordinances that local communities could enact to mitigate potential risks to a water supply, but the plans themselves are not legally binding documents.

“It depends on what the plan is and what they have in it, but what’s in a source water protection plan requires cooperation, but it’s not a regulatory document,” Dvorak said. “If you’re working with private landowners you have to get their consent. They have to want to work with you and you have to convince them to work with the community on what’s in the plan because there’s no regulatory push to force people to do it.” 

The city of West Des Moines has ordinances that protect groundwater wells, but not for surface water sources, such as Purple Martin Lake, Murphy said.

She said West Des Moines Water Works hopes to petition the city in the future to make changes to protect source water lakes in the community, Murphy said.

Murphy said the intent of the restrictions is to allow development and water protection to co-exist, and to create an environment of cooperation to protect water sources that are vital to the community.

Other provisions contained in the agreement require WB Realty to work with West Des Moines Water Works and the city of West Des Moines to establish zoning requirements for the property that are similar to the terms granted in the easements.

West Des Moines Water Works will compensate WB Realty for the easements, and install water lines to the property and install a permanent water meter on the site. The utility will also work with the city to build and maintain stormwater retention improvements on the property at no cost to WB Realty.

What others are saying 

While the development community supports the protection of the state’s water supply, developers acknowledge it can create additional costs that can make it challenging to get a project across the finish line.

Chris Costa, president and CEO of Knapp Properties, describes the issue as a “hot topic” that creates challenges from the “cost side of the equation.”

“I am [of] the school of thought that says these issues need to be compromised through public-private partnerships,” he said. “That’s easier said than done, but there’s not a lot of appetite for developers to pick up a lot more on the cost side as it relates to water quality and conservation. I think part of the equation is that a city needs to work in a cost-efficient way with developers.”

Costa, who sits on the West Des Moines Planning and Zoning Commission and the Great Outdoors Foundation board, said too often water detention requirements fall upon developers. He said developers do their best to reduce runoff from their properties and provide cleaner runoff than has been required in the past.

“The biggest challenge from developers is we’re trying to make the numbers work on land development,” he said. “I’ve been doing this for 25 years and this is as challenging an environment as it’s been, not just interest rates, but construction and labor costs, so it isn’t developers crying wolf. It’s a reality when there are extra costs associated with conservation issues.”

Costa said cities and developers can do more to work together to address water quality rather than put up obstacles.

“I think as a developer community we have to recognize that what we’re doing has some long-term costs to water quality, so we need to do what we can within reason,” he said. “I’m an eternal optimist and I always think there is a path forward. It’s just going to be more challenging.”

Chris Murray, president and CEO of the Denny Elwell Co., said placing land use restrictions on projects near water sources would be discouraging for developers, but that it’s a duty of everyone involved to ensure no conflicts exist before a site plan for a project is approved. That includes resolving any questions about access to water, he said.

He said if a community becomes too restrictive, it could push development away.

“These deals are big enough that if there isn’t resolution, the long-term site selection could shift away from that area and may never come back,” Murray said. “It could potentially set a precedent that developers would watch moving forward, and that maybe other communities watch. That precedent could be that a community either becomes difficult to deal with or get a project through, and then you start to see a shift in interest levels by developers.”

Ryan Moffatt, director of community and economic development for West Des Moines, said once the water source protection plan is complete it will help West Des Moines Water Works and the city give developers a heads up of possible issues if a development is proposed near a water source.

“I think we certainly would want to avoid this happening again,” he said of the dispute with WB Realty. “We strive to be as business-friendly as possible, so we don’t like it when things like this happen, but we are trying to hear out both parties and juggle this the best we can. That’s why we made a decision that even though this hadn’t been completely satisfied we did let the building permits go out the door and let them start construction.”

Dvorak said he anticipates the conversation about protecting water sources and the impact on development will continue.

“I could definitely see it becoming more of an issue as population growth increases and as water quality and water quantity issues in the state pop up,” he said. “You’re going to see more of these sorts of things. I would anticipate that.”