Still a lot of dirt to turn in Greater Des Moines

It’s a busy time downtown, and across Greater Des Moines. It all begins with land development, whether it’s 1,500 acres of fields and sculpted ponds in Waukee’s Kettlestone area or a former parking lot in downtown Des Moines.

The Business Record gathered a group of experts in the field, pardon the pun, one day in March for a roundtable discussion about development trends, opportunities and challenges. What can we anticipate in 2016 and beyond, knowing that at least one building, fashioned more as a work of art, already is under construction and is predicted to attract gawkers to the city and the region?

Panel participants were Jake Christensen, president of Christensen Development, Phil Delafield, community development director for the city of Des Moines, Chris Della Vedova, principal and co-founder of Confluence Architects, and Joe Pietruszynski, vice president of land development for Hubbell Realty Co.

To a person, they have had a hand in shaping the Greater Des Moines landscape. Some confess to having a pretty good image of the outcome before the first footing is in place.

“The more time I spend doing what I’ve been doing for the last 14 years, the easier it becomes to just drive down the street and imagine something different in a particular location,” Christensen said. “At first ... I’d have a general idea and I’d find a spot where it makes sense. At least for me, personally, with experience now, it’s pretty easy to just imagine.”

In the city of Des Moines, finding a use for that spot and having that use approved by city officials could be easier under a massive reworking of zoning ordinances. Delafield discussed the reasoning behind a move to form-based zoning, in which projects that fit a preferred use for a particular area of the city would go through an expedited approval process. 

It is an interesting concept that some developers will find acceptable and others will oppose. After all, it is unusual to find a municipality where developers can’t find fault with at least one piece of paperwork or review panel.

Delafield, with more than 30 years of development experience in the public and private sectors, is optimistic.

“Our existing development patterns have largely been reactionary,” he said. “The development community comes to us with an idea and then we sort of say, does it fit with what the community character plan currently says, and if not, will you modify the plan. That sort of process, that reactionary process, leads to a lot of angst among the developers and the neighborhoods because there is no predictability whatsoever. Every project is individually negotiated. This process, if we’re successful, envisions a series of detailed areas, plans, form-based documents that will suggest that if you go to a certain form, a certain building model in certain areas of the community, we will then, in turn, pave the way for that development to occur.”

Hubbell’s Pietruszynski said such an approach could be a benefit to downtown developers but could be a challenge in other parts of the city.

“I do know that building in Des Moines in those infill areas is always a challenge to make sure that it is consistent with the surrounding neighborhood, that densities match, that housing patterns match,” he said. “That is more challenging because the margins, the expectations in those areas because of all the complications, are very low and risks are high. I don’t know how form-based zoning is going to play into that type of development in the metropolitan area. I can definitely see it in the downtown.”

Della Vedova’s firm has played a central role in two signature Greater Des Moines projects. One is the Kettlestone area. Confluence Architects helped guide a process in which landowners, city officials and residents determined how they would like development to occur on the 1,500-acre area between University Avenue and Interstate 80.

Confluence also helped Kum & Go LC scout locations and focus on its needs for a new headquarters. The Krause Gateway Center that is under construction in the Western Gateway along Grand Avenue will draw people to the area just to catch a glimpse of the building’s design by internationally known architect Renzo Piano. But how did Kum & Go leader Kyle Krause decide on the location?

“Ultimately it came down to: What was the feeling that they wanted? What is their culture? How do they feel about where they wanted to be?” Della Vedova said. “You know, the greenfield sites, the downtown sites. Then it came down to what can you assemble? Where could they fit? Ultimately their vision was to be downtown. It wasn’t like this site is better than that site. It was understanding really what they were after.”


Panelists:

Jake Christensen – President, Christensen Development
Phil Delafield – Community development director, city of Des Moines
Chris Della Vedova – Principal and co-founder, Confluence Architects 
Joe Pietruszynski – Vice president of land development, Hubbell Realty Co.

Moderator: 

Kent Darr – Senior staff writer

 

Developers, a designer focused on landscapes and a city official deep in the weeds of development participated in a Business Record roundtable discussion in early March to talk about land: some occupied, some prime for construction and some of it programmed for well-defined future uses.

Participants were Jake Christensen, president of Christensen Development, Phil Delafield, community development director for the city of Des Moines, Chris Della Vedova, principal and co-founder of Confluence Architects, and Joe Pietruszynski, vice president of land development for Hubbell Realty Co.

 

Watch the Video
Want to watch the roundtable in its entirety? Go to www.businessrecord.com/AREM.


What are the opportunities still downtown? Sometimes it seems as though there isn’t a lot left.

Christensen: I think that everywhere you look, there’s a project it seems. But everywhere I look, there’s opportunity when you talk about connecting the neighborhoods to the downtown. In downtown, I think about connecting the paths of really positive things, and we have big gaps in between. Our downtown is spread out and not to scale. We have a lot of opportunity to fill in the gaps.

Della Vedova: It’s about filling in the gaps. Those are starting to develop. There’s just a lot of opportunity out there in downtown.

Christensen: When you go down two of our most prominent streets, Grand and Locust. When you can bike or get in a car and ride down on that and find vacant parking lots on our two main downtown thoroughfares, and that is more prevalent the farther away from those two corridors that you get, there is a significant amount of opportunity.

Pietruszynski: I think that you’re right. It comes down to whether or not the traffic is there, the dependence is there. It comes down to creativity and making sure that the solutions are in place to build on that creativity. As (with the planned zoning changes in Des Moines), those regulatory changes promote that creativity. It’s what going to allow the community to grow and be successful.


Other than at the big intersections at Kettlestone, how do you kick off development in that big green space? Does office lead the way there? 

Della Vedova: I think it’s going to be chicken and eggs. Who wants to come first. There’s been a tremendous amount of interest. Both local developers and out-of-state developers are looking at that corridor. I don’t think that a lot of people realized before Grand Prairie Parkway went through just how massive of an area was being opened up. 

Pietruszynski: From what we see driving commercial investment, in our own commercial portfolio, as Phil said, it follows the rooftops. You need a diverse mix of housing to support that commercial activity. It is often said that the CEO of the company wants to live near the business. You have to supply homes that drive the retail services that everybody wants in the area. We try to build all our models off of residential first and commercial will follow. It’s shown to be successful in what Johnston is doing along the Merle Hay corridor. The redevelopment through there where they’re inviting density and new residential development to help kick off new retail investment and office investment. Really diversity of housing that hits all spectrum of ability is key for the moment.

Christensen: I heard Kyle Krause speak at the groundbreaking (for the Krause Gateway Center), and one of the goals that they had is their ability to recruit talent, and I know that there are other employers across the metro that are taking a careful look at how their campus is set up and the campus location contributes to their ability to attract and retain talented people. As the millennials come into the workforce, that is a unique shift that we’re all having to manage. Who knows what they will do.

Pietruszynski: Millennials grew up with their baby boomer parents with granite countertops and nice amenities in the home and a lot of opportunities. They want to carry that lifestyle into their own. They’re looking for the trails. They’re looking for bars to walk to. They’re looking for the coolness factor when they enter into your building. They want all the high-grade stuff that their parents have. That’s what’s being offered downtown and in those areas that are drawing the millennials. I don’t know if that came into play with what Kum & Go has done, but we’re seeing the millennial generation gravitate downtown because that high quality is there, that value is there that they’re looking for. It expands not only from what they get in their home, but to the dog park. The ability to walk to the grocery store.


Are 60-somethings looking for the same thing? And, are you starting to see that downtown in particular?

Delafield: I would say yes. I think they’re one and the same almost. I heard an interesting dynamic the other day that intrigued me. A lot of people from outside of the state, instead of buying a second home along a lake or a river, are now buying townhouses in Des Moines because they want to come visit the city. Their second home is in the city.

We have apartment people who are doing the same thing. We’ve got Kent Sovern from AARP; I’ve watched a couple of his presentations, and he actually says what you just articulated. Which is, what does my 65-year-old AARP member want? The same thing as your 17-year-old son or daughter. Freedom, mobility and options.


And the same level of amenities from what I understand?

Della Vedova: Part of that is the student housing. When we went to college, I can tell you it was very different. That’s kind of like what Joe was talking about. With students and employees, it’s about recruitment and retention. You provide these amenities whether it’s to get them to come to your school or you get them to come to your development.

KEY POINT: Millennials = Boomers
It turns out a lot of the same things millennials want with housing -- connectivity, walkability, upscale amenities -- are the same things the baby boomers are seeking.

Pietruszynski: Baby boomers and millennials alike are looking to connect to their community. They want to be part of it, and they want to be active in it. That’s what downtown has to offer.

Della Vedova: When I think downtown, too, also, you talked about the mix of the CEO can live there as well as the employees, and it’s a little bit easier in the downtown environment to bring those things together and not have it be out of place.

Pietruszynski: It does get a little bit more challenging in the greenfield area to try to create diversity of housing, especially in the suburbs, because the only formats are one size fits all or we want all the same. You know, the “don’t you dare mix that lower price point of housing in my neighborhood” type of reaction. That’s a little more challenging. We are doing it through conservation development and integrating trails through using stormwater as features that people can connect with the environment and do something for the community. That’s important to people as well. We’re seeing a migration in these greenfield areas to incorporate more interaction between the built environment and nature.


Did you ever think you’d see a time when stormwater management would be an amenity in a development setting?

Della Vedova: Not to toot our own horn, we’ve always looked at how to make this an amenity. Getting everybody else to buy in has been a little bit of a challenge. Then to take it to the scale that Hubbell has done with their conservation design communities. What they did with Kettlestone is really kind of bringing it to the forefront. I’m going to pick on engineers here. I don’t think it’s a lack of developers wanting to pursue it. I don’t think it’s because planners aren’t promoting it or landscape architects aren’t promoting it. It comes down to engineering specifications and the way we’ve always done things. Water has a “bad, get it out of here” kind of attitude. More infrastructure is better than less. If we take it away from the developer, you’re giving them something-for-free kind of position. That’s shifting now that people are seeing what that amenity can provide. It’s been slow, but I think we’re starting to see that turn.

Delafield: To that point, I think it’s interesting that some perspectives of The Tomorrow Plan and upcoming comprehensive plan are reflected in that way of thinking as well. When we talk about connections, we’re also talking about wildlife connections. There’s been an enormous loop along these waterways, and watershed authorities have now serviced every one of the creeks and rivers in our area. There are discussions on how these natural areas connect. It was the logical extension in my mind of what the trail network started with. You’re using the natural areas as an amenity. It can also be used as a stormwater amenity. It can be this natural undeveloped area. We’re trying to take areas that are previously developed that are at risk in order to be more sustainable. We’re trying to take those out of the areas in the community. Look at an area like Four Mile that historically developed along Four Mile Creek. It makes no sense to rebuild in those areas. We are doing strategic buyouts to push that envelope to its quietest conclusion. Then supporting development on the outside fringe of it rather than continuing to allow risky structures to continue to exist.

If you take Four Mile and you connect it with the areas up through Ankeny and you go all the way up to the reservoir, you have a corridor now that becomes a wildlife corridor where you can now start to introduce some wildlife into the community. We have that opportunity all over the city. We have marvelous corridors. We have the Des Moines River. The Raccoon River. It could be one of our creeks. They’re not a liability; they’re an amenity.

Della Vedova: That’s a shift in thinking. There was a point in time where these things were a liability and you had to channelize it and push the water out. 

Pietruszynski: In our opinion at Hubbell, it’s a better way of thinking to use those open spaces as amenities to regionalize stormwater so that everybody can benefit from it. There are some challenges to other things that play, but I think that when we can create a win-win out of that facility, it just promotes further investment and added value.

KEY POINT: Water, water everywhere
Cities and developers are looking to find ways to incorporate water as an amenity in development areas rather than a liability. But managing stormwater is still a concern for many communities.


Along the lines of runoff, I’d like to give you the opportunity to talk about topsoil. Is that a resolved issue?

Pietruszynski: It is actually resolved on the state level. The state of Iowa implemented a four-inch topsoil rule for development. As you know, Hubbell Realty Co. is a big advocate of conservation development and using soil wisely in its practices so that stormwater is not only absorbed into the environment, but it’s left in a cleaner state than when it’s received. You see that in our conservation work throughout the metro. What we were wholly against was a regulation that was almost impossible to achieve. All the enforcement that went into it, that layered costs upon costs, because people were fearful of the litigation that would take place if it was not exactly adhered to. The simple practice of respraying a topsoil happens every day in land development. A lot of people think land developers sell topsoil. We absolutely do not. That’s a myth. It costs way too much money to get rid of topsoil. It’s not an economically feasible model. It’s not usable for structural fill; it’s just a top.

Della Vedova: I know a lot of time, we try to figure out how can we use it up.

Pietruszynski: Use it up and use it on site.

Right. Where it’s logical and where it stays fluffy and can handle stormwater. What happens is the state adopted a rule that when it was implemented it had good intent but was very difficult to achieve and very costly to achieve. We want the state more focused on doing exactly what happened at Kettlestone or Glynn Village in Waukee, or Cross Haven in Johnston where you’re taking more of a regional perspective. You’re looking at the whole system. Creating all the amenities, putting soil where it matters, putting vegetation where it matters, and treating and handling the water that’s going to be feasible for construction and do exactly what it needs to do to protect the environment.

We didn’t want to see something that was creating waste in the system that was prohibiting us to do those conservation methods. You just do this four-inch rule and you start layering all these costs in on top of it, it starts putting the wearability to add more prairie grass, to add more walking trails because the cost is shifting to something that doesn’t matter. That’s why we’re more advocates for conservation design.


Are you fighting the fight in individual communities then?

Pietruszynski: The state has reversed what it has done for topsoil. That is not a mandate now. We are still proactive in our conservation. What you see cities like Clive doing is implementing rules where they now want eight inches and they want you to put organic matter into it, thinking that’s going to solve the stormwater problem for the community. 


Clive has a limited amount of development land left. Does the topsoil requirement intimidate developers? 

Pietruszynski: I will say that it will prevent investment from developers to go in with that kind of approach. The magnitude of moving around soil and augmenting that soil with organics is so cost-prohibitive that you’ll see us migrate to areas that take more of a logical approach. Like Waukee uses. We welcome their conservation ideas. It’s an economically feasible model. That’s where we’re going to put our resources versus trying something that we see just doesn’t work logistically in the construction process or makes financial sense for someone who’s trying to achieve a $300,000 home. There are wealthy people who can afford these processes, sure. But when you’re trying to hit where the mainstream buyer is, those cost additions start pushing investment away.


The more time you go over a property with heavy equipment, for example, spreading topsoil again, don’t you get the same issue with compaction? 

Pietruszynski: That was our biggest concern.When you’re applying organic soil, first of all, you have to strip the top and push it away and put it back. Soil will lose density, air, will lose its organics. It will start breaking down. That’s why we keep saying, OK, let’s place soil where there’s least disruption. Let’s put it where it makes sense so that it can absorb and it can stay in its organic condition to the greatest extent it possibly can. Much like a farmer would think about where he wants his soil in his field. Where is it going to produce the most crops? How are you going to get the most organic matter out of it? Where is it going to be able to absorb the water or release water? Let’s put our soil where it makes sense and look at it from a bigger perspective, a more landscape architect view of the development than just simply put it there.

Della Vedova: It all comes down to what that compaction is. Once it’s compacted, it doesn’t matter if it was good topsoil or not. It can’t absorb runoff.

Pietruszynski: You have hundreds of trades on the developments working at any given time. That soil is changing constantly on a daily basis. We need solutions in place that are achievable and that will solve the problem. Again, that’s why we push that more regional perspective.

Della Vedova: I think we’ve seen the buy-in now on the regional perspective. It’s come around. Even what cities are looking at. They didn’t necessarily come in with strong arms; it’s thinking about the regional perspective and it’s not just a one-off. That’s an important part of the process.


Jake, you have talked about breaking the architectural landscape a little bit. I thought: Gee, that’s an interesting thought. What kind of reaction is he going to get from that anyway?

Della Vedova: A pretty positive reaction.

Christensen: I think that when you go to interesting cities, usually the most compelling thing that happens, whether people realize it or not, is the unique experiences. I think in this particular case at East Fourth and Court, there happens to be a Quonset hut hidden behind the fake front of a building. I think that when we’re done with that building, people will be surprised that it’s there and it has been for a long time. Chris and I actually did a building a long time ago, 2004, that all we did was remove the paint from and people asked, “How did you make that building look so old?” Well, it was 100 years old, that’s how. They didn’t realize it was there. I think the similar thing will happen. Maybe a little more profound on the Quonset hut because we’ll remove the fake front and put a really cool tenant in there, and it’ll be something different that you don’t see every day.

Pietruszynski: Our colleagues out there are risk takers. They are researchers. They are always looking for the next good idea, the next opportunity. Traveling around the country saying, hey, that’s cool. That would look great in Des Moines. To give the consultants credit, we rely heavily on some very creative minds. From the staff level to the private sector to help generate those ideas. It’s the dynamic of bringing together people who know how to work the finance from the investors, who have that mindset like Jake has and bring it all together and just push an idea through and see how the puzzle all fits together and keep moving in that direction.


Final thoughts for 2016 going forward?

Pietruszynski: 2016 is going to continue on the success of 2015. I do see it as a vibrant year. I’m going to talk mostly about single-family townhome development in the metro. What we’re seeing is, across the western side of the metro, a very low supply of land development opportunities for new housing. We’re going to see 2016 build out most of that supply. There’s going to be a need to replace that supply going into 2017, 2018. That’s going to have some challenges associated with it. We’ve seen a lot of speculation in the marketplace. People offering way too much money tying up land for too high costs. As I mentioned before, we all play by the same rules. Some things that are happening just don’t make economic sense and they can actually slow down that engine, which then leads to cost inflation, and we’re starting to see home prices escalate, mostly in the western suburbs, because of that.

2016 provides an opportunity for Des Moines, especially in its infill areas, to seek out solutions for affordable housing in infill. We have very low mortgage rates right now. We have the most opportune time for people to buy into housing, and it provides an opportunity to reinvest in those areas

Christensen: I think 2016 is going to be interesting because over the last five years, we’ve increased the supply year-over-year of residential rentals in downtown and yet the vacancy rate has actually tightened. This year, with the number of units that are coming online, is yet another increase and the most significant increase to date. I think it will be interesting to see if we finally get some actual vacancy. If we don’t, then that’s going to be an incredible signal that we are nowhere close to obtaining what’s possible for downtown. It will be compelling to see what happens. I think that’ll be a great indicator of how much runway is left on the downtown housing scheme. I believe it’s going to be strong, but this will be the year to test that. Regardless of how that comes out, the other thing I think is going to happen in 2016 is you’re going to see more retail in downtown, and I think you’re going to get the inclinations of the first national retailers that have for the last 30 years only been in the suburbs.

We’re starting to get looks. I like to call them at-bats from people who have not considered locating downtown in the recent past at all. We’re going to land some. I think every retailer is going to make their own decision honestly. I think that some of them are starting to look at the urbanization trends that have been going on for a long time. Some of them have a business model that fits in well with that. Those are the kinds of tenants that we’re going to be able to look at.

Della Vedova: You’re right, they do want to stand out and there’s some national people we heard looking around. They want to stand out in downtown Des Moines. That’s after making this town a destination. From our perspective, 2016 is really strong. There’s a lot of stuff happening. I think the big thing will be how much we can actually get done to that time initiative. We talked about there’s a shortage of labor we can get to get stuff built to move things through. We have some ... I’m not going to say ridiculous, but above-market rates that tie up single-family ground out there. That’s going to take some time to balance out. I feel good.

Delafield: I think we’ll continue to see demand for diversity in housing types and diversity of income flows. I also think that retail, boutique shops will remain strong. I think we’ll see a little bit of new product. Perhaps this is what you mean, Jake; the big-boxes are now starting to embrace a new model. It isn’t the big-box anymore; it’s a brick-and-mortar with a retail component. Having that brick-and-mortar component nearby that you can then deliver that product from in a neat environment will remain attractive, and I think that is especially true for urban areas. I am anticipating that sort of growth.