Invest DSM has purchased 10 residential properties in the Drake neighborhood and plans to make significant upgrades to the homes, an undertaking that fits with the nonprofit group’s goal to strengthen neighborhoods.

The group paid $1.26 million for the properties in the 1000 block of 22nd and 23rd streets between Drake Park Avenue and Day Street in Des Moines. Included in the acquisition was the historic Peak Mansion. The sale of an eleventh property is expected to close at the end of August.

New Life Center, a church located at 1031 23rd St., had owned the properties. It also owns the remaining properties on the block.

“It’s a rare opportunity that you have an entire block owned by one landowner,” said Amber Lynch, executive director of Invest DSM. The nonprofit group wanted to acquire the properties before other investors, particularly those from out of state, purchased them, she said.

“We don’t feel like that would be beneficial to anybody involved,” Lynch said. The acquisition “was really hard to pass it up because of our mission of strengthening neighborhoods.”

The neighborhood in which Invest DSM acquired the properties once extended south to Center Street. In the late 1950s and early 1960s, dozens of houses and other structures were removed south of Day Street, clearing the way for the construction of Interstate Highway 235, also known as MacVicar Freeway.

The freeway “became this thing that people didn’t want to live near,” Lynch said. “Once disinvestment creeps into [a neighborhood], it’s really hard to pull back. It’s expensive and it doesn’t get done. … Not many private actors would have the ability to tackle it in the way [Invest DSM] can.”

Daunting undertaking

Invest DSM, which began in 2019, is a joint effort between the city of Des Moines and Polk County to expand revitalization efforts in the city’s neighborhoods. The venture was launched after a study showed that 22 of Des Moines’ 52 neighborhoods had a higher percentage of “slipping or bad” houses than “good or excellent” ones. The Des Moines City Council designated four neighborhoods, including Drake, as Special Investment Districts, a move that allows the neighborhoods to access revitalization grants. Three other neighborhoods will join Invest DSM as investment districts in 2025.The redevelopment of the properties is Invest DSM’s largest – and most daunting – undertaking.
All of the houses were built 100 or more years ago. Many will likely be gutted to their studs. Electrical wiring, plumbing and mechanical systems will either be upgraded or replaced. Lynch estimated upgrades could cost an average of $500,000 per house.

“Many of the homes are very large and require significant repairs,” Lynch said. “We also want to retain and restore any historic character, and that can add cost as well.”

Invest DSM does not plan on razing any of the houses, Lynch said. Tours of the homes have shown them to be structurally sound, she said.

“There’s always surprises once you get into it,” Lynch said. “But our intent, at this point, is to renovate all of them.”

Three of the 10 houses purchased by Invest DSM are vacant; all are rentals. A majority of the houses have been converted to multifamily residences. A longtime goal of the Drake Neighborhood Association is returning converted structures back to single-family homes.

Nearly 15%, or 201, of the 1,343 residential parcels in the Drake Special Investment District include single-family homes that have been converted to duplexes or multifamily residences, according to information compiled by Invest DSM. Those parcels include 652 units, county assessor information shows.

Since 2019, Invest DSM either has or is returning eight multifamily conversions in the Drake area to single-family residences. Four other restorations have been completed through the entity’s single-family developer program.

Lynch said it hasn’t yet been decided how many of the newly acquired properties will be returned to single-family homes.

“Our goal is to see the block have mixed-income housing opportunities,” Lynch said. “If we can bring some stability into that part of the [Drake neighborhood] and try to retain affordability, I think it positions the neighborhood in a much healthier place in the long term.”

Neighborhood group supports nonprofit’s plans
The Drake Neighborhood Association is supportive of Invest DSM’s acquisition of the properties and restoration plans, said Courtney Ackerson, the group’s president. Improvements were completed in 2022 to the shelter at Drake Park, just west of the properties acquired by Invest DSM. The Drake area’s commercial district, called Dogtown, is expanding, and numerous other homes in the neighborhood have or will be renovated, she said.

“The whole timing of what Invest DSM is doing is really ideal,” Ackerson said. “It’s so sad that some of the houses have been abandoned when we could be having neighbors living in a really great location that is close to downtown, across from a park and near dining and other things. … We think it’s really great to see improvements made to those properties.”

To pay for the purchase, Invest DSM took out a $1.5 million mortgage with Central Bank. The loan will be repaid with proceeds from the sale of the properties, Lynch said.

Any money from the loan not used to acquire the properties will be used to pay for legal fees associated with purchase and design work tied to the properties, Lynch said. For example, Invest DSM is exploring restoring alley access that would allow the addition of garages.

It will likely take three to five years to complete the renovations of the houses, Lynch said. Before any work begins, the group will closely analyze each property to determine specific renovation plans and understand the needs of current tenants.

“We are hopeful that we’ll be able to do something dramatic and impactful in the neighborhood,” Lynch said.

RELATED ARTICLE: Historic Peak Mansion acquired by Invest DSM

Learn more about properties bought by Invest DSM

Invest DSM has acquired 10 properties in the Drake neighborhood and has a sale pending for an 11th. Houses on the properties will be extensively renovated. To view an interactive map that includes photos of the properties, sale price, property values and more, click here or on the map.