An aerial view of the proposed redevelopment of Valley West Mall in West Des Moines. The view is from the southwest looking to the northeast. Architectural rendering by Shive Hattery Architects and Engineers

Owners of an aged West Des Moines shopping center have created a redevelopment plan to transform the site into a vibrant hub of activity with new residences, outdoor gathering places and a hotel with event space, the Business Record has learned.

The redevelopment of Valley West Mall, which opened at 1515 Valley West Drive in 1975, would include an estimated investment of $262 million by owner Watson Centers Inc., located in Minneapolis. Infrastructure projects, including the development of retention ponds surrounded by walking paths, are estimated to cost an additional $15.5 million, according to a West Des Moines document.

The city of West Des Moines is requesting $30 million from the Iowa Reinvestment District Program, which allows communities to use new state hotel-motel and sales tax revenue generated by a development to be reinvested in the area in which the development is located.

The deadline to apply for the program was Thursday. West Des Moines is one of several communities vying for a portion of the $100 million designated to the program from newly generated tax revenue. Others include Des Moines, Urbandale, Johnston, Newton and Fort Dodge.

“There’s going to be tough competition for these dollars,” said Clyde Evans, West Des Moines’ community and economic development director. “Maybe with all the good projects coming forward, maybe the state will renew the program for another year.”

Regardless of whether West Des Moines secures funding through the program, portions of the Valley West Mall redevelopment proposal will likely move forward, Evans said.

Specifics of the proposal include:

• Demolition of the former Younkers department store building that has been vacant since 2018. In its place would be the development of 18,000 square feet of new restaurant space and a four-story, 240-unit apartment building. Also proposed are five new retail outlots for stand-alone buildings and development of outdoor gathering space around a new stormwater retention pond. 

• Development of a 65,000-square-foot entertainment complex with nearby surface and underground parking. The complex, also planned on the former Younkers site, would include a movie theater and an outdoor recreation area.

• Demolition of the building that now houses a J.C. Penney department store. The remainder of the mall would be refurbished with tenant spaces reoriented to face the center’s exterior rather than interior. The change would create nearly 300,000 square feet of newly remodeled office and retail space.

• Development of a 60,000-square-foot, three-story office building with underground parking proposed on the site’s northwest corner.

• Development of a second apartment building, also with 240 units.

• Development of a five-story, 130-room hotel with 130,000 square feet of event space that would be located on the north side of the center.

In recent years, the area surrounding Valley West Mall has increasingly become deserted as retailers either closed or moved closer to Jordan Creek Town Center, which also is in West Des Moines. The area’s decline prompted the cities of West Des Moines and Clive to begin work on a redevelopment plan for the 650-acre area located between University Avenue and Interstate Highway 235 and between 22nd Street/Northwest 86th Street and Interstate 35/80.

The area includes the Valley West Mall site.

“I think you’re going to see reinvestment in that area regardless of what happens with Valley West Mall because it’s so well located,” Evans said. “But I think if people see a lot of new redevelopment activity occurring on the Valley West Mall site, I think that will inspire more confidence of the [area] property owners to look at doing something with their property.”

In the past 16 years, the assessed value of the shopping center has plummeted 60%, data from the Polk County assessor shows. In 2005, Valley West Mall’s assessed value was $109.4 million; in 2019, its value had dropped to $43.6 million.

According to a city document, redevelopment of the mall site is expected to increase its assessed value to $100 million, which would generate an additional $3.5 million in property taxes annually.

Much of the mall’s decline in value can be attributed to vacancies at the center. The closure of Younkers left a gaping vacancy on the south side of the mall. Younkers, an anchor tenant, had leased more than 200,000 square feet of space. Von Maur, which anchors the north end of Valley West, announced plans in late 2019 to relocate to Jordan Creek Town Center.

The mall’s other major tenant, J.C. Penney, recently emerged out of Chapter 11 bankruptcy under new ownership and it’s not known how many of its 600 stores nationwide will remain open.
Other national chain tenants at the mall have struggled financially, with some, like Christopher & Banks, permanently shuttering their doors.

Before the pandemic, consumers were increasingly turning to e-commerce to buy goods such as shoes and athletic wear. The pandemic accelerated consumers’ move to e-commerce, further making shopping centers like Valley West irrelevant to many consumers.

“Malls in general are on a rapid decline, and markets really are capable of supporting maybe one,” said Rachel Wacker, West Des Moines’ business development coordinator.

While Jordan Creek, which opened in 2004, appears to have weathered the economic adversity of the past year, the pandemic has further highlighted the need to look at redevelopment ideas for Valley West, Wacker said.

The proposed redevelopment area, which totals 70 acres, includes the mall site as well as 12 acres south of the mall.

Mall owners are proposing to redevelop in two to three phases over a three-year period.

What is the Iowa Reinvestment District Program?
The Iowa Reinvestment District Program, overseen by Iowa Economic Development, allows cities to create special districts where money from sales and hotel-motel taxes can be set aside to help pay for projects that spur economic development. In place since 2013, the state reinvestment act has provided key financing to several high-profile Iowa projects, including the $101 million convention hotel in downtown Des Moines. The state this year is providing up to $100 million in newly generated tax revenue to qualified projects, which will be scored on such things as uniqueness, economic impact, capital investment and geographic diversity.