Movie theater, 32-story tower proposed downtown

Justin Mandelbaum has been looking for a way to bring a movie theater back to downtown Des Moines.

What’s interesting about the local real estate developer’s latest proposal is what he wants to build above the theater.

Mandelbaum plans to construct a 32-story, $85 million mixed-use building at Fifth and Court avenues. It would be the fourth-tallest building in the state, and the tallest built since the 45-story 801 Grand office in 1991.

His plans call for about 200 apartments, a 600-stall parking ramp and a small amount of office space. There would be a nine-screen movie theater, an indoor/outdoor climbing gym and a jazz club on Walnut Street.

It would replace a city-owned parking garage that city officials have been looking to demolish to make way for new development.

“I think it will be a catalyst for downtown,” Mandelbaum said. “It will increase the vitality of downtown and firmly establish downtown as the metro area’s premier place to live, work and play.”

Construction could begin in late 2016 at the earliest, and it would take at least two years to complete, he said.

Behind the project is Mandelbaum Properties, a development firm that includes Mandelbaum and his father and brother.

The plan is coming to light now because the Des Moines City Council on Monday will consider an initial step in the approval process: establishing a 60-day waiting period during which other developers can submit proposals for the site.

The waiting period is a new process spurred by a recent proposal to develop a city-owned parking lot in the East Village. One local developer complained that the city should not sell large, strategically located pieces of city-owned property without opening the process so other developers can make pitches.

If successful, Mandelbaum would build one of the first residential high rises in the city in years.

Developers have been rapidly building five- to six-story mid-rise apartments downtown, but many have balked at the cost of steel construction needed for taller buildings.

A prime example is the Riverfront YMCA site. City officials and downtown advocates have said the two-acre site on the Des Moines River is well-suited to a high-rise apartment or condo building.

But no such plans have materialized.

West Des Moines-based Hubbell Realty has proposed a five-story wood-construction apartment building for the site. Hubbell CEO Rick Tollakson has said the rental rates downtown are too low to make steel-frame, high-rise construction economically viable.

Real estate brokers have said a high-rise development at the YMCA site would require apartment rental rates of more than $2 per square foot, while average downtown apartments rent for about $1.40 a square foot.

Mandelbaum said his apartments would offer high-end amenities and command rental rates at the top of the market. But he said he could not yet pin down a price point.

He previously considered developing the Riverfront Y site, but said the Fifth Avenue property is better suited to a high-end residential tower because it’s attached to the skywalk and sits closer to the Court Avenue entertainment district and major downtown employers.

Another key component is the parking garage. It would be owned, leased or subsidized by the city, providing a key financial building block around which to fund the project.

“I think the city component — the parking garage — changes a lot of the economics,” he said. “I’ve probably looked at the Y site more than anybody, and I think this is a totally different ballgame.”

Mandelbaum is not alone in his high-rise aspirations.

Des Moines-based Nelson Construction and Development has proposed building a 10-story luxury apartment tower above a new parking ramp planned at Seventh Street and Grand Avenue.

CEO Mike Nelson said he thinks Mandelbaum has a good location for a high-rise.

“I think it’s yet to be seen whether we have the (rental) rates to support it, but it’s definitely trending in that direction,” Nelson said.

Assistant City Manager Matt Anderson said he believes a high-rise with high-end apartments is viable downtown.

“There are two schools of thought,” he said. “There are developers who say we’re not ready and (high-end apartments) haven’t been tested, but you don’t know until you test it. It’s a piece of the market that is absolutely not being tested.”

Mandelbaum, a Des Moines native, worked for private equity firms before returning to Des Moines in 2008. He made a splash last year when he announced plans to renovate an empty downtown office building at 900 Keosauqua Way into nearly 200 artist studios.

He previously proposed a movie theater at 420 Court Ave., directly across the street from the site of his new proposal. When the city opted to go with Hy-Vee’s grocery store proposal instead, Mandelbaum vowed to find a new location for a downtown theater.

“When I came to Des Moines it was to have a positive impact through creative real estate projects,” he said.

Bringing movies back downtown

It’s been more than a decade since moviegoers could catch a movie downtown.

Developer Justin Mandelbaum wants to change that. He plans to build a movie theater at Fifth and Court avenues as part of a 32-story high-rise development.

The $85 million project would include about 200 apartments, a parking ramp, a jazz club and other amenities. But the impetus was the need for a downtown theater, Mandelbaum said.

“This first and foremost is a movie theater project,” he said.

Omaha-based Main Street Theatres would operate the facility. Mandelbaum described it as a luxury theater, offering beer and wine, prepared foods and recliner seating, and a lobby bar and restaurant.

Once the place to catch a show, downtown’s last theater —the River Hills-Riviera — closed in 2001 to make way for Wells Fargo Arena.

The landmark Paramount Theater was demolished in 1979 and the Value Cinema 7, a second-run theater at Fifth and Grand avenues, closed in 1998.

Today, the Science Center of Iowa shows IMAX films downtown. The Fleur Cinema & Cafe and the Varsity Theatre are both a few miles from the city’s core, but there are no traditional, first-run theaters within four-and-a-half miles of downtown.

“You basically have a movie theater desert, and at the epicenter of it is downtown,” Mandelbaum said.

Downtown parking could be limited during construction

The plan to demolish a parking ramp at Fifth and Court avenues to make way for a 32-story mixed-use project raises questions about the supply of parking downtown.

The new development would include roughly the same amount of parking spaces, but it would leave a hole in the city’s parking system while being built.

Complicating the matter is the city’s plan to demolish another aging parking ramp at Seventh Street and Grand Avenue. Plans call for it to be replaced by a similar mixed-use development with apartments and parking.

Assistant City Manager Matt Anderson said the city will study the downtown parking supply to determine if there is enough parking for both projects to proceed simultaneously. If not, the Fifth and Court development could be delayed.

“We will not leave downtown in a parking crunch,” he said. “That’s going to weigh very heavily on our decision on the timing.”

The project at a glance