City of Des Moines City Council Workshop

9/26/2011

Presented by:

Heidi Wessels, Executive Director, Neighborhood Development Corporation

Matt Anderson, Board Treasurer, Neighborhood Development Corporation

To enhance neighborhoods

and combat community

deterioration through

redevelopment efforts

designed to create

opportunities for housing,

small businesses and jobs

for residents of Polk

County, Iowa.

Heidi Wessels, Executive Director, NDC

210 Des Moines Street- Des Moines, IA 50309

www.ndcdesmoines.org

NDC: Project Neighborhoods

• River Bend

• Capitol East

• Drake

• Fairgrounds

• Sherman Hill

• King Irving

• McKinley School/Columbus Park

Sixth Avenue: 601 Forest Avenue Rehabilitation 601 Forest Avenue Des Moines, IA

Building Area:

13,008 sf

Project Cost:

$1,040,167.00

Occupancy Type:

M/B/R-2

Date of Orig. Construction:

1895

Date of Renovation:

2003

Business Mix:

United Market (retail;); Legacy

Business Group (commercial);

DMPD & 7 Residential Units

Sixth Avenue: Wherry Building Rehabilitation and Addition 1600-1610 Sixth Avenue Des Moines, IA

Building Area:

8,061 sf

Project Cost:

$1,030,000.00

Occupancy Type:

M/B/R-2

Date of Orig. Construction:

1887

Date of Renovation:

2005

Business Mix:

Restaurant; Barber Shop

African Market

Restaurant & Catering Co.

4 Apartments

Sixth Avenue: Wherry Phase 2 Building 1612-1618 Sixth Avenue Des Moines, IA

Building Area:

4,800 sf

Project Cost:

$650,000.00

Occupancy Type:

M/B

Construction Start:

Late 2006

Business Mix:

City of Des Moines Offices-

Community Services

East Grand “La Plaza” Development: Beginnings

East Grand Commercial Building 1534 East Grand Avenue Des Moines, IA

Building Area:

6,000 sf

Project Cost:

$520,000.00

Occupancy Type:

M/B/A-2

Date of Orig. Construction:

2006

Business Mix:

Bakery

Beauty Salon

Asian Restaurant

Vacancy

Los Laureles Patio Addition 1518 East Grand Avenue Des Moines, IA

Building Area:

2,500 sf

Project Cost:

$132,165.00

Occupancy Type:

A-2

Date of Orig. Construction:

1923

Date of Renovation:

2006

Business:

Mexican Restaurant

1542 Mixed-Use Rehabilitation 1542 East Grand Avenue Des Moines, IA

Building Area:

7,920 sf

Project Cost:

$317,320.00

Occupancy Type:

M/B/R-2

Date of Orig. Construction:

1885

Date of Renovation:

2006

Business Mix:

Order Express

Salon

Vacancy

4 Apartments

Commercial Building & Plaza 1514 East Grand Avenue Des Moines, IA

Building Area:

4,300 sf

Project Cost:

$550,000.00

Occupancy Type:

M/B

Date of Orig. Construction:

2007

Business Mix:

Insurance, Clothing;

Gift Store

Retail

Tienda Mexicana Façade Improvements 1524 East Grand Avenue Des Moines, IA

Building Area:

3,107 sf

Project Cost:

$140,000

Occupancy Type:

M

Date of Orig. Construction:

1962

Date of Renovation:

2008

Business Mix:

Mexican Grocery Store

1552 Mixed-Use Building Rehabilitation 1552 East Grand Avenue Des Moines, IA

Building Area:

5,600 sf

Project Cost:

$942,000.00

Occupancy Type:

M/B/A-2

Date of Orig. Construction:

2009

Business Mix:

Mexican Ice Cream Store

Mexican Gifts and Piñatas

Restaurant

Vacancy

1552 Mixed-Use Building Rehabilitation 1552 East Grand Avenue Des Moines, IA

1938 SE 6th Street: Beginnings- NDC goes South

B&B Grocery

2011/2012 -1938 SE 6th Street- Mixed Use Project

Schematic Building Area:

12,000 sf on two floors

Project Cost:

TBD

Occupancy Type:

Office/Retail/Restaurant/Residential Apartments

Project Strategies:

Strengthen Historically Prominent Commercial Node (SE 6th & Hartford)

Increase Neighborhood Access to Local Goods/Services

Passive Heating/Cooling Methods Leading to Low Utility Costs for Tenants

Highly Insulated Residential Units

Sustainable Materials

NDC 2010/2011

Successes •Increased collaboration with other developers- Forest Avenue •90% occupancy within all of NDC’s current holdings- very little turn-over in tenant base; very few outstanding receivables •Tenants include 19 locally owned businesses, NBSD, and Des Moines Community Services •Increased outside interest in our project areas (6th Avenue Corridor; East Grand Avenue) •Strong relationships with agencies that compliment our mission: City of Des Moines Community Development; SBA, Anawim, ISED •Public recognition/Community Presence: Community Partner Award from the IA Black Business Summit (2011); 6th Avenue Corridor Board of Directors, Corporation for Economic Development Board of Directors •Strong relationship with neighborhood associations •Financially strong •High Accountability from our Board of Directors and City Staff •Frequently contacted as a successful ‘case study’ for Universities, Professors, Research •NDC has completed projects in the north, east, west and are now expanding into the south neighborhoods •NDC projects pay property taxes of over $100,000 annually

NDC 2010/2011

Challenges: •Re-financing- 3 projects refinanced in 2010 •Evolution of our business model- residential sustains commercial •Uncertainty of future funding(28E) •Limited incentives for building new commercial construction •Small business loans/opportunities for emerging businesses – not available to our typical tenant Addressing challenges by: •Locating a local bank will to lend to NDC; educational efforts with other local banks to broaden our lending pool. •Foregoing residential incentives (affordable housing) to realize full leasing potential. Adjusting to new commercial market rates for NDC areas of development. •Limited duration of our current 28E agreement limits our ability to obtain project funding, requires additional cross collateralization and financial securities in place. Requesting early renewal to our 28E agreement to solidify our future in Des Moines. •Constant evaluation of our operating costs. Have reduced operating costs 35% in the last 16 months. •Collaborating with private organizations to determine the feasibility of new ways to lend to non-traditional small business start ups.

NDC 2012 and Beyond

Projects: •NDC will finalize construction and financing of their 12,000 sf mixed use building at 1938 SE 6th Avenue. The development consists of 5,000 sf of commercial space and 7,000 square feet of one and two bedroom apartments. •NDC will continue to work with City leadership and staff on identifying areas where NDC can play a role in redevelopment. •NDC will update our strategic plan (last plan created in 2009/2010) •NDC will work in conjunction with the City of Des Moines Community Development’s Neighborhood Revitalization Program to identify future development opportunities •NDC will continue to identify development partners in order to leverage their development dollars and mitigate risk •NDC will be involved with new planning efforts (such as the Capital Crossroads and Tomorrow plans) in order to identify additional opportunities and funding sources

Thank you!

NDC 2011 Board of Directors: Matt Marsh, President, Iowa State Bank Jake Christensen, Vice President, Terrus Real Estate Group Matt Anderson, Treasurer, Knapp Properties Matt Brown, Secretary, Wellmark Nadine Hogate, NRB Representative to the NDC Joel Huston, Kum and Go Chris Johansen, City of Des Moines Community Development Cyndi Chen, Neighborhood Representative to the NDC Holly Olson, Neighborhood Finance Corporation Bret Vandelune, Polk County Brian Meyer, City of Des Moines City Council Questions: Contact Heidi Wessels, Executive Director: 244-8600 X 1 or h.wessels@ndcdesmoines.org