(This article was updated because an earlier version included an inaccuracy.)
The usually busy downtown Des Moines construction site for what would be Iowa’s tallest residential building has fallen silent, its massive tower crane lowered and at a standstill.
Delays in obtaining a loan to pay Beal Derkenne Construction, the contractor for 515 Walnut, forced work to halt on Monday, Oct. 27, as first reported by KCCI-TV. Lead developer Joe Teeling told the Des Moines Register on Wednesday the loan was initially supposed to close in early October. Now, it looks like the deal should be settled by the end of the month, he said.
“It just took a lot longer because it’s really a complicated project,” Teeling said of the loan process. “We just held off because the construction loan is going to pay the builders. It’s just been delayed, and they have all been waiting. After a certain period of time, they have to quit working. So they’re just taking a pause until we get this loan closed.”
The $148 million project is being financed through equity and a loan of more than $100 million. Financing hit a snag while finding “the right lender” and finishing documentation, Teeling said.
The 33-story tower would be the largest in Des Moines’s central business district since 2007, housing 390 apartments.
If all goes well with financing, Teeling believes work could restart by Monday.
Cody Christensen, developer services director for Des Moines, said the city expects the pause to be temporary.
“The city’s development agreement requires the project to be completed before any public incentives are issued. The developer and contractor anticipate only a brief pause in construction, and the substantial private investment already committed provides significant financial motivation to complete the project,” said Christensen.
Despite the pause, Teeling still sees 515 Walnut, which has reached more than one-third of its anticipated height, achieving its scheduled completion date of spring 2027.
“Our builders have been phenomenal,” he said. “I don’t have a lot of concerns about completion right now. They are doing extremely well.”
Before the pause, construction crews completed about one floor each week, most recently pouring concrete for the 13th level ahead of schedule, Teeling said.
“We’re feeling really good,” he said. “It’s been great to get the financing wrestled to the ground, and we’ll be closing (on the loan) by the end of the week. I feel strong about that. I have been on the phone all day long with all of the parties involved.”
What is going inside 515 Walnut?
The tower initially was proposed by Blackbird Investments, which began designing it in 2015. Teeling was briefly an executive of Blackbird, but he said he was not involved directly in the project, which stalled amid litigation in 2020.
In 2022, after buying the plans for the building from Blackbird, Teeling and his St. Joseph group revived the project demolishing the empty eastern section of the Kaleidoscope at the Hub shopping mall that occupied the site. But with interest rates up and inflated prices for materials, groundbreaking didn’t occur until late last February, when Teeling said he had obtained financing from a Boston firm.
If completed as planned, 515 Walnut will contain a mix of studio, one-bedroom and two-bedroom apartments. Ten percent of the units will be priced to be affordable to households that earn 65% of the area median income, or $51,415 for a single person.
The first floor will house the apartment lobby, a grab-and-go food spot, bike storage, a dog wash area and a mailroom for tenants. The second floor will include a workout facility and will be linked to the downtown skywalk system.
Floors three and up will house apartments, with an open-air space at the top of the building.
The building will stand 347 feet tall, ranking among the hundred tallest in the country that are under construction or recently completed. It will be Iowa and Des Moines’ fourth-tallest building, slotting into the narrow height gap between the Financial Center and the downtown Marriott Hotel. The Ruan Center and 801 Grand round out the city’s top five.
CORRECTION: An earlier version of this article incorrectly stated the cost of the project. It is $148 million.
Kate Kealey is the growth and development reporter for the Register. Reach her at kkealey@registermedia.com or follow her on Twitter at @Kkealey17.
This article originally appeared on Des Moines Register: 515 Walnut construction temporarily pauses due to financing delay
Reporting by Kate Kealey, Des Moines Register / Des Moines Register
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