Owners of Merle Hay Mall and the Des Moines Buccaneers’ hockey team were given until June to make significant progress on a lease agreement for a new multipurpose arena or face losing a $26.5 million financial award from the state of Iowa.

The extension came with stern comments from Debi Durham, director of the Iowa Economic Development and Iowa Finance authorities.

“How long do we push this out?” Durham said during a meeting today of the Iowa Economic Development Authority board. “There’s still a lot of moving parts. I don’t know that we should extend this for months. … We have to [see] substantial progress being made [by June].”

If there is little or no progress, “hard decisions” will need to be made, Durham said.

Durham’s comments came after a city of Urbandale official and mall owner Elizabeth Holland provided the board with an update on the progress of a proposal to convert former department store space at the mall into a multi-use arena that would be home of the Des Moines Buccaneers.

Holland announced plans for the 3,500-seat arena and training center in November 2020. In April 2022, the Iowa Economic Development Authority board approved providing $26.5 million in Iowa Reinvestment Program funds to the project, which also included a hotel with up to 150 rooms.

Several changes have occurred at the mall, located on the northwest corner of Merle Hay Road and Douglas Avenue. Kohl’s relocated to a new building that faces Merle Hay Road. Kids Empire, an indoor play center, opened on the west side of the mall. Dinks Pickleball opened an indoor pickleball venue in space that had previously been occupied by Kohl’s. IH Mississippi Valley Credit Union opened a branch on an outlot along Merle Hay Road.

Plans are also moving forward with a stormwater expansion project on the west side of the mall that will alleviate flooding issues, Aaron DeJong, Urbandale’s economic development director, told the board.

“This is a complex project [that] was made more challenging in the context of rising interest rates and construction costs,” DeJong told the board. But, even though several extensions were given to the owners of the mall and hockey team to reach a lease agreement, “financial commitments have not been achieved.”

Holland told the board that several lease scenarios have been explored with the Buccaneers. The two groups are now considering an option in which the mall would own and manage the arena and the hockey team would be one of several tenants, Holland said.

In addition, VenuWorks Inc., an Ames-based company that provides full-service venue management services, is helping develop a plan to operate a multi-tenant arena, Holland said. In recent weeks, the mall and Buccaneers have reached an agreement on an economic term sheet, a nonbinding agreement that shows the basic terms and conditions of an investment, she said.

The Buccaneers have 30 home matches a year, Holland said. “So now we’re contemplating how [to fill] the facility the other 335 days a year. … We are looking very closely at what are the other kinds of events that can be held in a multi-use arena.”

VenuWorks is helping to identify the activities and events that could be held in the arena, Holland said. “We will probably know in the next 30 days what that economic demand looks like for those events and we obviously hope to move forward from there. We continue to be very optimistic.”

Michael Devlin, who is part of the Buccaneers ownership group, did not attend Friday’s state board meeting or join it virtually. Instead, DeJong read a statement from Devlin that said the ownership group was continuing to negotiate a lease agreement.

Other proposed projects tied to the arena and training center have stalled because of lack of progress with the arena, DeJong said. He said the hotel component has been delayed and “mall corridor investments have been delayed until the arena begins construction.”

Also delayed is the redevelopment of the Merle Hay Tower, located on the mall’s west side. However, Holland told the board that she was meeting on Friday with a potential buyer who is interested in converting the tower to residences for older adults.

Durham said she’s hopeful progress on a lease agreement will be made by June.

“Our goal here is to get a good project done and this is a good project,” Durham said.