At home with old or new
Mike Nelson’s historic renovations and new construction are feeding the downtown renaissance
Friday, June 27, 2014 6:00 AM
When you talk with Greater Des Moines developer Mike Nelson, you get a blend of the old and the new, whether the conversation is about real estate development or hiring practices.
• Rehabilitating the Partnership Building after it was damaged by the Younkers building fire.
• Historic renovation of the Omaha Federal Building into a 152-room hotel with 22-room configurations.
• Construction and development of the East Village’s e300 building, a mix of residential and commercial space.
• Considering a senior housing and memory care facility in Nebraska. Recently completed Baker Creek Senior Living in Des Moines.
• Getting ready to start another large historical renovation in St. Paul, Minnesota, where the company will convert a U.S. post office to a hotel.
That shouldn’t be too surprising. Nelson has gained a reputation for working within a “historical fabric,” as he calls the renovations his company has led on notable structures in Des Moines and the Midwest. But he’s also not afraid to cut some new cloth.
Nelson Construction & Development has worked with a range of partners over the years to boost the downtown housing market by renovating old buildings and creating new ones.
His company was involved with the $11 million conversion of the former Hawkeye Transfer building on Southwest Fifth Street into AP Lofts, a 70-unit market-rate apartment building that was recognized by the city of Des Moines as a centerpiece of historic preservation.
His work also played out at the historic Liberty and Fleming buildings downtown. Nelson and Foutch Bros. LLC hope to complete work this fall on the historic renovation of the Des Moines building to a mixed-use project that will have a pocket park for residents and the public.
As for the new, Nelson recently received approval from the city of West Des Moines for a 30,000-square-foot office building called Ashworth Plaza at Ashworth Road and Jordan Creek Parkway.
With a foot in the past and one in the present, Nelson also is taking a unique approach to staffing his firm, which is located in an airy office on the second floor of the Fleming Building.
As the recent hire of musician-author Danny Heggen as development project manager demonstrates, “you need to fish in different ponds” to find the right people, Nelson said.
“Most progressive firms include people who have worked outside a given industry,” he said. “Different frames of reference provide problem solving from different angles.”
Nelson figures that people with a big and creative view of the world and specialized skills can be trained to be project managers or leasing managers or marketers. That is especially true with the construction industry facing a shortage of experienced workers, he said.
Nelson says his company is more than a construction firm.
“Every real estate deal has seven to 10 levers you can pull: lease contracts, loan financing, equity, how long is the lease,” he said. The company offers solutions in all of those areas, and when clients walk through the door, Nelson is looking for the ones who are looking at the overall configuration of a project.
“What I tell people is the firm is like a fulcrum, and the number of people you interact with determines the length of your lever in the company,” Nelson said. “They might start talking about construction and end up talking about the project as a whole.”
And that’s just the way he wants it.
Nelson also turns to tenants for suggestions that might help him improve future projects.
“The good developers don’t drink their own Kool-Aid,” he said. “Each project is an opportunity to ask your tenants what you could have done better, then incorporate that into your next project.”
For example, Nelson and Foutch Bros. will not finish work on a pocket park that will be a key element at the Des Moines Building until they receive feedback from tenants and the community on uses for the area, Nelson said.
Nelson said his company made it through the recession with the help of lenders and investment partners who understood the business sense of restoring old buildings and extracting value from them.
“We survived because of great partners and flexible lenders who understood it was smarter to work hard and continue to invest in these buildings as opposed to selling them at the bottom of the market. We’re grateful for their faith,” he said.
They also shared his ability to take risks and believe in positive results.
“You’ve got to be able to swallow rocks to do this stuff,” Nelson said.
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