Local developers are proposing converting an extended-stay hotel in Clive to multifamily housing. Photo courtesy of Google

An extended-stay hotel in Clive would be converted to multifamily housing that, if approved by elected officials, would provide much-needed workforce housing to the area, the project’s developers say.

The Clive City Council at its meeting tonight is expected to approve the final reading of a proposed ordinance that would change the zoning of property at 11428 Forest Ave. to allow multifamily rental housing. The parcel’s current zoning allows a range of commercial uses, including hotels. The council has approved the first two readings of the proposed zoning; the Planning and Zoning Commission has also approved the rezoning.

Developers Tina Smothers and Jason Grove said they have a contract to purchase the 3.5-acre parcel on which a 112-unit extended-stay hotel is located. The units are spread over 14 buildings and each unit has its own entrance from the outside.

“We want to create workforce housing, and this is a great location to do that,” Smothers said. “Clive doesn’t have a lot of multifamily residential units, and this will fill a need.”

A study of the Des Moines area’s future workforce showed that by 2038, Polk County will need 57,000 new housing units to support the increasing number of new workers. About 40% of the new housing, or 23,500 units, should be rental units, with a majority offering monthly rental rates below $1,250, the study said.

According to the U.S Census’ American Community Survey, 23%, or 1,615, of Clive’s 6,900 housing units are rentals.

Smothers said rental rates for units in the Clive project will start at about $800 a month. “There’s a lot of jobs in this area, and people want to live near where they work,” she said.

The area includes several medical clinics, restaurants and retail stores.

The Clive property was originally developed as a Marriott Residence Inn, according to information provided to Clive’s council members. About 12 years ago, Marriott began moving away from townhouse-style extended-stay hotels to structures that resemble traditional hotels. At the same time, it began selling its townhouse-style properties.

In 2013, DMB Investments LLC, located in West Des Moines, purchased the property and continued to operate it as an extended-stay hotel under the names Chase Suite Hotel and now Sterling Inn and Suites, according to information provided to the council.

“The current property owner has struggled to maintain success as an independent operator due to limited marketing budgets, no nationwide reservation system, declining capital improvement resources and staffing challenges,” according to the council information. “Similar to the other hotels in the area, these older facilities are finding it increasingly difficult to compete with contemporary offerings constructed in nearby locations in West Des Moines and Urbandale.”

The property is valued at $2.5 million, a 30% drop from 2019 when its assessed value was $3.6 million. The drop is due to the pandemic’s effect on the hospitality industry, according to council information. If the property is converted to multifamily, its value is expected to be about $7 million.

Redeveloping the property isn’t financially feasible, according to the council information. Instead, the property’s owner believes finding a different use for the property is the best alternative.

Smothers and Grove have experience in converting property into apartment units. In 2019, the business partners purchased the former AIB College Business campus southwest of downtown Des Moines. Smothers’ background is in rehabilitating and managing multifamily properties. Grove has a background in finance and buying and selling properties. The two renovated what was known as Fenton Hall East and West, converting the former campus housing into apartment units, all of which are now leased.

Smothers said that if all the necessary city approvals are received, work will begin on updating the interiors and exteriors of the units.

“We’ll do one building at a time, get the occupancy certificate and then move on to the next building,” she said. Hotel furniture in the units will be donated to local charities, she said.

According to information provided to the council, the swimming pool will be removed and the space converted to an outdoor gathering area that will be furnished with grills, yard games and seating.