Construction of the Fifth, a $200 million project planned at Fifth Avenue and Walnut Street, includes a 40-story residential and hotel tower and movie theaters and restaurant. Construction of a parking garage is underway but work on the tower and five-story commercial building have not yet begun. The project is depicted above at center right, with the sloped top. Architectural renderings by Solomon Cordwell Buenz

Construction of Des Moines’ newest skyscraper – a 40-story tower with luxury apartments and hotel - was scheduled to begin more than six months ago.

Instead, Justin Mandelbaum, the developer spearheading the project called the Fifth, has missed numerous deadlines dating back to last October.

Without evidence that the project is moving forward, city officials in early April gave Mandelbaum until April 24 to accept proposed changes to a development agreement, said Erin Olson-Douglas, Des Moines’ economic development director. Officials had hoped to gain City Council approval of the changes at a May meeting, she said.

Olson-Douglas said the city has not received a formal response from Mandelbaum and now must decide what steps to take next, which include giving Mandelbaum notice that he is in default of the original development agreement.

If that happens, the city could take control of the parking garage under construction at Fifth Avenue and Walnut Street as well as adjacent property where two other pieces of the project - the high-rise and a five-story commercial building - are planned.

Mandelbaum, on Tuesday, said his team is working on putting finishing touches on architectural renderings and construction documents and that he’s been in contact with City Manager Scott Sanders about proposed changes to the development agreement.

"Nobody wants this project to move forward quicker than me," Mandelbaum said.

Redevelopment plans for the southeast corner of Fifth and Walnut began moving forward in mid-2015 when the council selected West Des Moines-based Mandelbaum Properties as the preferred developer for the city-owned land where a dilapidated parking garage once stood.

Mandelbaum gained various city approvals to move forward with the $200 million project that includes an 11-story parking garage, the skyscraper and a commercial building with a multi-screen movie theater and restaurant.

While work is progressing on the parking garage, construction on the tower and commercial building have not begun.

Before the early April correspondence sent to Mandelbaum, the city had sent at least four other letters warning of a possible default and seeking settlement to remedy the delays.

In a letter dated March 24 to Mandelbaum and his development team, Sanders, the city manager, expressed his ongoing frustration that Mandelbaum was continuing to seek changes to a development agreement "that I cannot support."

Sanders wrote that an amendment to the development agreement was being drafted that would "operate as a negotiated settlement agreement to resolve and remedy the Developers’ ongoing noncompliance with their obligations under the Agreement."

The proposed amendment to the development agreement was sent to Mandelbaum and his team in early April.

A copy of the proposed changes to the development agreement was provided the Business Record. New deadlines include:

July 1 – Gaining city approval for a new conceptual development plan.
Nov. 2 – Submission of documents showing that financing is in place for the tower and that construction plans for the project exist.
Nov. 30 – Completing construction of the parking garage.
Jan. 15, 2021 – Finalizing financing and executing a construction contract for the tower.
April 1, 2021, or April 1, 2022 – Beginning construction of the tower with a completion date within 34 months. The later construction start date is in place if certain conditions are met.
Nov. 30, 2021 – Showing that financing is in place for the commercial building. The deadline would be extended by one year if construction has started on the tower.
April 1, 2021, or April 1, 2022 – Beginning construction of the commercial building with a completion date within 24 months. The deadline can be extended by one year if construction has started on the tower.

Last fall, Mandelbaum unveiled plans to replace a screen wall on the west facade of the parking garage with 435 colorfully lit windmills that move with the wind. The city’s response to the proposed artwork has been tepid, at best.

Included in the proposed changes to the development agreement is a stipulation that if Mandelbaum is unable to gain city approval for the proposed artwork, the original vertical slate screen wall design, previously approved by the city, will be used.

Mandelbaum said he was close to completing architectural renderings and construction documents for the tower. He also said that he has a signed agreement with 21c Museum Hotel, which "has been actively involved in the design of the hotel."

While the outbreak of the novel coronavirus hasn’t affected the ability to compete the renderings or construction documents "the lending market is shut down because of the crisis," Mandelbaum said. "If you are a lender, would you want to lend on a hotel right now or do you want to wait and see how things play out. That’s where we are."

Mandelbaum said he was working diligently to complete everything possible so when markets stabilized "we’ll be ready to go."

Added Mandelbaum: "I’m confident that when the markets reopen, the project will move forward."

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