A proposed mixed-use development on a narrow strip of land near City Hall will not move forward after city staff and the development group mutually agreed to end negotiations on a development agreement for the project.

In February 2024, the Des Moines City Council voted to enter into talks with Des Moines-based Sidekick Development, Wade Investments and Gold Cap Development, who partnered on a proposal for the site that sits along Robert D. Ray Drive between East Grand Avenue and East Locust Street.

The city issued a request for proposal for the less-than-half-acre site — 17,168 square feet — in December 2023 with a Feb. 1, 2024, deadline for developers to submit proposals.

The proposal by Sidekick Development, Wade Investments and Gold Cap Development  called for a five-story, mixed-use development. The early concept included 75 apartments with 9,000 square feet of retail and restaurant space.

But even at that time, members of the development group said it was far from a done deal and that the proposal was conceptual and would likely change.

Last week, officials with the city and the development group confirmed that the project would not be moving forward.

Cody Christensen, director of the city’s development department, said city staff and the development team worked through the details that would be needed for the project to move forward.

“After estimating construction costs and financing options, and receiving an appraisal for fair market land value of $1.29M, city staff and the development team mutually ended negotiations for the proposed project,” he said in an email.

Angie Pfannkuch, president of Sidekick Development, said in an email that “the land cost along with the current interest rates ultimately led us to walking away from the project.”

“We still think the site has potential, but it is not feasible for us at this time,” she said.

Last year, Pfannkuch said the site’s proximity to other downtown amenities makes it attractive. It’s also one of the last pieces of the East Village before the river to be activated and could add to the vibrancy of the East Village, she said.

It is also near other city-owned properties — City Hall, the Armory Building and the police station  — an area that the city hopes to redevelop in the coming years. There is also anticipated development along the river as ICON Water Trails sites begin being activated in 2026 and 2027.

Christensen said it’s not unusual for a project not to proceed because there are many variables at play, including land cost, material, labor prices, interest rates, available incentives and the amount of rent a project might be able to generate.

“For every project that is completed, there were many others that did not proceed beyond the conceptual design phase,” he said.

He said in an email that the city will not issue another RFP for the site and is not actively marketing the property but is open to “developer-initiated proposals.”

“It is available for a project when the time is right and variables align to allow a project to move forward,” he said in an email.