Arena builders

Final funding approval pending for Bucs’ Merle Hay Mall Hockey Arena

The Iowa Economic Development Authority Board of Directors will decide on Friday whether to approve millions of dollars in public funding for renovations to the Merle Hay Mall that include the construction of a new arena. Des Moines Buccaneers junior hockey.

Authority staff considered an application to create a special tax district, sponsored by the cities of Des Moines and Urbandale. The state will pay cities additional revenue from sales tax and tax on hotels and motels in the so-called Reinvestment District, which can use the money to help developers renovate and build around the shopping center, located where the city limits meet.

If the board approves the request at a Friday morning meeting, the state will award them $26.5 million in tax increment funding, or TIF, over several years. In addition to building a 3,500-seat arena in the grounds of the mall’s former Younkers department store, the developers plan to build three more hockey rinks, locker rooms, a practice hall, classrooms for players and new stores.

Elizabeth Holland, CEO of Merle Hay Investors.  the Merle Hay Mall ownership group, where the Des Moines Buccaneers are planning a new hockey arena.

“We’re very excited to get started,” said Liz Holland, CEO of Merle Hay Investors, who began planning changes to the mall with city officials four years ago when she learned Younkers would be closing.

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Including the mall, the IEDA board initially granted $100 million to six reinvestment district projects last year. The cities submitted final applications to the authority in February, and IEDA staff have been reviewing the projects ever since. Holland told the Des Moines Register that among the information state officials had requested from him were additional details about when each part of the mall renovation would take place.

In addition to the Merle Hay District, the IEDA Board of Directors will decide on Friday whether to approve $17 million for the renovation of Crossroads Mall in Fort Dodge. The developers plan to renovate commercial spaces and build a plaza and event venue.

The planned Buccaneer arena at the Merle Hay shopping centre.

Another major development in Des Moines, a professional football stadium south of downtown, is still awaiting final approval. The board previously approved public funding of $23.5 million for the project last year.

IEDA spokesperson Staci Hupp Ballard said in an email that the board had asked staff to present developments “in batches” over the next few months. She added that officials of the authorities had not asked any city to change elements of their final applications.

Holland said builders will first focus the mall’s renovation on the former vacant Younkers location, where contractors will build the arena and one of the additional hockey rinks.

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Des Moines Buccaneers owner Michael Devlin, who did not return a call for comment Thursday, previously told the Register that builders are expected to complete the arena by fall 2023. Devlin said that the team wanted a better arena and practice area to help recruit the best high school. talent for the Buccaneers. The team is often a transitional stage for teenage players looking to prepare for college or the pros.

Kohl’s, meanwhile, will begin construction on a new store where the mall’s Sears used to be. When complete, the Kohl’s store will move there and the builders will build two more hockey arenas on the current Kohl’s site.

The former Merle Hay Mall Sears store was demolished to make way for a relocated Kohl's store.  It will in turn be replaced by a pair of hockey rinks, part of the Des Moines Buccaneers development focused on building a hockey arena in the shell of the mall's former Younker store.

If the IEDA board approves funding for the mall’s renovation on Friday, Urbandale officials plan to issue a bond to provide developers with upfront funds for construction expenses.

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City officials estimated earlier this year that after paying costs such as attorneys’ and bankers’ fees to help issue the bond, the loan would net them $22 million for the development. With the Federal Reserve raising interest rates in an effort to curb inflation, the bond might fetch less money now.

Aaron DeJong, Urbandale’s deputy director of economic development, told the Des Moines Register in an email that the city does not yet know how much the interest rate hike will affect the bond.

“We will do this further analysis closer to when funds are needed,” he said in an email.

The Iowa Legislature created the Reinvestment District Program, setting aside $100 million in public funds to fund eye-catching projects that make towns around Iowa more attractive places to live.

In a reinvestment district, the city receives a portion of the sales tax and hotel and motel tax revenue generated from new projects that the state would otherwise obtain. Iowa officials determine the amount of revenue generated by new projects beginning with a “base year” – the period just before development ends.

In the case of the Merle Hay Mall, DeJong said, the state will review the amount of sales tax and hotel and motel tax revenue the area generated in the year prior to IEDA approval. of the reinvestment district. Any amount over that figure in future years will go to the city, which will use the money to repay the bond.

Urbandale’s director of economic development, Curtis Brown, said the town would start receiving the money in early 2024.

Tyler Jett covers jobs and the economy for the Des Moines Register. Contact him at tjett@registermedia.com, 515-284-8215, or on Twitter at @LetsJett.