Younkers rehab moves forward with Virginia investor
At last night’s meeting, the Des Moines City Council approved a request for city staff to work with New Market Investors LLC on a redevelopment strategy and financing package for the former Younkers building.
The company is expected to close on the purchase of the building from Saks Inc. this month, according to Matt Anderson, the city’s economic development administrator.
Michael Alexander, managing director of Vienna, Va.-based New Market Investors, would not confirm the close date, but said in an e-mail that he is still working on the acquisition. The current plan includes historic preservation of the building at 713 Walnut St. and conversion of the 288,000-square-foot space into apartments, commercial and retail bays and parking. New Market Investors is working with HLKB Architecture and Hansen Construction on the project.
Anderson and Alexander said the project would likely require many financing sources, including historic and low-income housing tax credits.
“You name it and this project is going to need it to move forward,” Anderson said.
The city will try to close any financing gap as a “funder of last resort,” Anderson said, with options such as tax abatements and tax-increment financing, if it is within the city’s means. The city decided in 2006 that it could not cover the $9 million gap in funding for a $40 million-plus project proposed by Chicago-based Joseph Freed and Associates.
“Mike (Alexander) has a better history throughout his career working with different financing mechanisms,” Anderson said. The project also could be cheaper than Joseph Freed’s because New Market Investors is considering creating apartments rather than condominiums, and Saks Inc. slashed its asking price in half to $2.45 million last spring.
Anderson expects it could take four to six months to put financing together with the hope that construction will begin next summer.
“Given the distressed capital markets, no redevelopment plan is assured,” Alexander said in the e-mail, “and accomplishing this mission will take the best efforts of my company working in concert with Des Moines corporate leadership, City/County/State governmental leadership, equity investors and debt providers.”