Drake University is selling land it owns east of its campus for a $63 million development that would include apartments, townhomes, commercial/retail space and a remodeled Varsity Theatre.

It's the latest piece of Drake's long-term plan to redevelop the neighborhood around the Des Moines campus that includes new buildings for the Boys and Girls Clubs of Central Iowa and Harkin Institute for Public Policy & Citizen Engagement, an extended stay hotel, and streetscape improvements along University Avenue.

The four-acre development "supercharges" the university's plans, Drake University President Marty Martin said during a meeting with the Des Moines Register. It would completely revamp the block between 24th and 25th streets from University to Forest avenues.

"We're an urban campus without all the amenities that you’d want to find in an urban campus," Martin said. " ... We want more people, more life, more vitality, more amenities for the campus and our neighbors, more jobs for the campus and our neighbors.

"This rising tide lifts all boats."

Plans include up to 300 apartment units in several five-story buildings along University Avenue. The developer, Merge Urban Development Group, also plans 30,000 square feet of commercial space on the lower levels and in a free-standing commercial building on 25th Street.

Buildings that are currently home to a Great Clips, a branch of U.S. Bank and Gazali's Mediterranean Grill would be demolished. The former Varsity Theatre building would remain, but it would be remodeled and reopen as a movie theater.

A parking garage would replace a surface parking lot between Carpenter and Forest avenues. It would have room for 600 to 900 parking spaces, and serve as a lot for new residents, students, faculty and visitors to campus.

Plans for townhomes around the perimeter of the parking garage are in the works, Martin said.

This would be the first Des Moines project for Merge Urban Development Group, a team focused on real estate development in federally designated opportunity zones throughout the Midwest. Approved nearly two years ago by the federal government, opportunity zones — identified as low-income communities in need of investment — offer developers several layers of tax incentives.

Portions of the Drake neighborhood around the university and Drake Park in Des Moines have been identified as opportunity zones.

Merge Urban Development Group plans to bring market-rate units to the area, although the size and price would be attainable to existing neighbors, Merge partner Brent Dahlstrom said. Eighty percent of the units would be a mix of studio and one-bedroom apartments. The remainder would be two-bedroom units.

The units are expected to range in size from 400 to 900 square feet. Rent prices have not been set, Dahlstrom said.

"We size them in a way to make them attainable across multiple income levels," Dahlstrom said. "So you could see a teacher and a student living there, but you could also see a doctor living in the building."

The group plans to negotiate with existing businesses — which lease their spaces from Drake — with the goal of moving them into the development's new commercial spaces. Merge would look for retail businesses, neighborhood services or restaurants to fill the remaining space, Dahlstrom said.

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Merge plans to work with a local vendor who hopes to take over operation of the Varsity Theatre, which closed last year after 80 years in business as a neighborhood movie theater. It would likely undergo some upgrades, including a possible bar or restaurant connecting it to the new development, Dahlstrom said.

"All of this development and interest in the neighborhood, I think all of it together will bring a lot of people here," said Jennifer Sayers, president of the Drake Neighborhood Association.

The university did not disclose the properties' sale price. It has entered into a memorandum of understanding with Merge to give it a say in the development plans.

Martin said the university has a vested interest in what develops around Drake, for recruitment purposes. Conversely, Drake wants to see development that brings more people to its art shows, lectures and sporting events, he said.

"We'd love to have more people come on to our campus and participate in the life of the place," Martin said.

Construction on the unnamed development is expected to start in summer 2020 and be fully complete in 2023.

Kim Norvell covers growth and development for the Register. She can be reached by email at knorvell@dmreg.com or by phone at 515-284-8259.