Des Moines City Council OKs downtown Hy-Vee proposal

The preliminary plans and financial package for a Hy-Vee and Knapp Properties project downtown got the green light from Des Moines City Council on Monday, without any public opposition.

Council members applauded Hy-Vee and Knapp for the mixed-use project that will create roughly 80 apartment units and the city's first full-service grocery store in the heart of downtown.

The $30 million project will receive a 100 percent tax abatement for the first 10 years, plus a rebate of $3.3 million for the land acquisition anticipated at $3.57 million, according to a proposal approved unanimously Monday.

"I think we can't be anything but really proud as a city that we have an all-star lineup interested in downtown," Councilman Chris Coleman said.

Matt Anderson, assistant city manager, emphasized Monday that the bulk of the local incentive was granted for the residential and nongrocery components of the mixed-use project.

"Hy-Vee is about a third of this project," Anderson said. "We wouldn't bring a stand-alone grocery into this. It's the density of the project that's important to us ... and bringing extra residents downtown."

Anderson said Knapp's residential plans grew from 60 to 81 market-rate apartments units since the initial proposal.

The latest plans also eliminated a larger public parking garage that was originally planned. Plans now include a two-story garage with about 200 spots for residents and Hy-Vee customers and employees. Some of the spots will likely be open to the public in the evening.

The grocery store with a Market Grill restaurant will employee about 100 people, according to city documents.

The only spark of opposition at the Monday meeting came from at-large Councilman Skip Moore, who voted against the preliminary proposal from Hy-Vee early last year.

Moore voted in favor of the item Monday, but said he still disagrees with the proposal process that prompted his no vote last year.

He asked Anderson why the Hy-Vee-Knapp project was recommended to the City Council from among five project proposals from different developers. Moore said all five concepts should have been presented to the council with a ranking determined by city staff.

"The feeling other people are receiving is that we have staff directing council what to do instead of council directing staff," Moore said.

Anderson said the City Council had access to all five concepts submitted to the city for the property at 420 Court Ave.

Hy-Vee and Knapp's concept was selected after a thorough process, he said. "We created a staff team to review those, and we made a recommendation to you based on what we thought was the most viable project, economically, from a market standpoint."

Anderson worked as vice president of asset management for Knapp Properties in 2011 and 2012 between an eight-year stint as Des Moines' economic development administrator and his current role as assistant city manager.

Hy-Vee representative Peter Hosch said the downtown store, a first for the company, is a developing concept that started many years ago but gained traction in the past five.

"We've always been receptive to the idea, it's just having the critical mass from a residential perspective to have it make sense," said Hosch, group vice president of Hy-Vee store development.

With a little less than 10,000 downtown Des Moines residents, the store's initial success will depend on vehicle traffic.

"It's still going to have to be a facility that's utilized by the commuter traffic downtown, until more density takes place," Horsch said.

Since the project's announcement, parking concerns have been a key talking point for some who publicly opposed the project.

City staff said the issue is primarily an educational one for the public, with access and plenty of space in nearby parking garages, some regularly at 25 percent capacity.

"The Fifth and Walnut garage and the Science Center garage are severely underutilized," Anderson said, noting that additional signs for traffic may be needed.

"We have parking assets that are sitting idle at peak times."

Construction is expected to begin on the Hy-Vee-Knapp site in early spring for a tentative opening in spring of 2016.