A planned luxury high-rise at Seventh and Walnut streets is getting a new name, enough floors to make it the third-tallest building in the state, and local investors who will fill a void left by a Chicago investment firm that is no longer part of the project.

The new plans are being rolled out by Blackbird Investments, which has spent the last several months rejiggering plans for what is now a 33-story, 336-unit luxury apartment building that will be topped by two floors of commercial space — with tenants already in tow — and a partially enclosed fitness center that will provide panoramic views to folks working up a sweat on exercise machines.

Once called 701 Walnut, the high-rise has been renamed The Blackbird in recognition of the local firm's transition from developer with little equity in the project to principal investor and developer. Project costs are estimated at around $103 million.

Blackbird partner Justin Doyle said one thing the group will not tinker with is a package of tax increment financing and property tax abatements that was approved last year by the Des Moines City Council. The package calls for a 10-year property tax abatement on residential units followed by 100 percent tax-increment financing in years 11 through 20 that carries an estimated value of $4.2 million. The TIF payments are capped based on a minimum assessment for the 26-story tower originally proposed by Blackbird Investments,

By stepping away from $25 million that would have been provided by Chicago investment and development firm CA Ventures, Blackbird has more freedom to develop the high-rise as it sees fit, including the all-important transition to the intersection of Seventh and Walnut, Doyle said. He said a few weeks ago that the developer felt hamstrung by its relationship with CA Ventures on this project only. The Doyle family's Modus Engineering is with the Chicago firm in other projects.

"We can make the right decisions and not have external forces dictating what goes on. ... We're the ones who understand the local community and market dynamics; it wasn't a good fit for them, it wasn't good fit for us, but they might fit better on a different project," Doyle said.

Blackbird Investments launched an informal capital call late last year to find other investors. In addition to the five Blackbird principals, the firm also gained a few local investors who will be silent partners in the project.

Financing remains complicated, with Blackbird now pursuing a loan with the U.S. Department of Housing and Urban Development and providing enough equity that will give Blackbird an estimated 75 percent ownership stake in its namesake building. If that number is not dead-on, it's darn close, Doyle said.

The HUD loan carries a longer amortization and typically lower interest rates that would be available from large institutional investors or real estate investment trusts. According to the HUD website, the nonrecourse loans have interest-only payments over a construction period of up to three years, with a 40-year amortization at fixed rates.

Doyle said the loan process began last summer and could stretch into spring.

The Blackbird high-rise rollout comes just a few days after updated plans were presented for a 32-story high-rise, parking ramp and two-story movie theater at Fifth Avenue and Walnut Streets that is being developed by Mandelbaum Properties. Read more about The Fifth.

Both projects pose big financial challenges, with some observers of the local housing market saying that the city is not ready for a glut of expensive apartments and that investors could shy away from taking a stake in either of them. Nelson Construction & Development also is proposing luxury apartments for the northeast corner of the intersection of Grand Avenue and Seventh.

The Blackbird and Mandelbaum's The Fifth are family affairs. The other partners in Blackbird are Justin Doyle's father, Harry, and brother, Ryan, as well Hugh O'Hagan and commercial real estate broker T.J. Jacobs. Justin Mandelbaum has said he wants The Fifth to be a legacy to the contributions his father, John, has made to Greater Des Moines. Both are partners in Mandelbaum Partners.

Both development teams recognize that they have detractors, especially in regards to securing the financing. The Mandelbaums said earlier this week that investors with excess capital are looking for the right projects for their cash. They are convinced those dollars will find their way to The Fifth.

"Des Moines has grown to a size where it is attracting that investment," Doyle said. "When you look at the other out of town players who have poked into Central Iowa, that's a wonderful compliment to the Greater Des Moines business community. It's still a long ways until it is attracting the institutional equity like Kansas City and St. Louis and Chicago do, but there are people looking for opportunities to invest."

Blackbird Investments had little trouble recruiting additional equity partners, he said.

Just for the record, the two development teams wish each other success in their projects.

"I really want that project to succeed. It's so important for Des Moines to change the tone of the way construction is done," Doyle said.

"The more projects that expose more people to downtown, it's just perpetuating success," Jacobs said.

Why did Blackbird decide to build a taller building, surpassing The Fifth by one floor?

"There was not an economic reason not to go higher," Doyle said. "As we had analyzed the project and put it together before, the height was constrained by an anticipation of what the market wanted, and when we became in full control it was 'Let's re-evaluate all of the presumptions of that. Between our market study, our appraisal and all of the things we have to do to do that, there's definitely a desire to go higher.

"From an economics standpoint, we still have the same amount of land, we still have the same number of elevators, we don't have any more common area, so if we can do this and somehow it makes the project more attractive to move into, my marginal costs go down as I go up, my marginal revenue goes up as my project goes higher, it's simple economics."

Ryan Doyle pointed out that rents will be higher for tenants on higher floors. 

"This project is really no more difficult to finance than one that was a third smaller than it. If we go back to beginning and how make the project better, it's not just building height; the other big thing on the tower is an increase in amenity space," Justin Doyle said.

Jacobs said, "It surpasses everything else on the market."

"It's like designing a cruise ship," Ryan Doyle said.

This is a project that began with a tour of the burned-out site of the former Younkers department store. In February 2014, fire badly charred the west side of the building, which has been renamed to its original Wilkins Building moniker, but Doyle said he was mostly interested in buying the hole in the ground that remained after east side was completely destroyed.

David Voss, a principal with Wisconsin-based Alexander Co., which owned the site at the time, gave Doyle a look at the burned but relatively intact Tea Room inside the Wilkins Building. Doyle said the decision was made to preserve the Tea Room and Wilkins Building, then take on the major infill project that will become The Blackbird.

"It's the right fit for us to own something that is that personal to us," Doyle said.

Beal Derkenne Construction is the general contractor for The Blackbird. Other members of the construction team are Raker Rhodes Engineering LLC, Neumann Monson Architects, Confluence Architecture and Modus Engineering.