UnityPoint Health has pulled out of a project to convert a retail plaza at the heart of the Ingersoll Avenue business district into a day care for seniors amid questions about owner and prominent developer Jake Christensen’s finances, leaving the property’s ― and Christensen’s ― future unclear.
Christensen has partnered in dozens of projects across Des Moines since starting Christensen Development in 2003, and before that as an executive with Nelson Development. He also is a member of former chair of the Des Moines Airport Authority.
Working with a team of other local developers including Jim Cownie and Tim Rypma, Christensen played a highly visible role in the transformation of the East Village, with projects including the iconic Raygun store and headquarters, the Iowa Tap Room and the former home of Peace Tree Brewing, now Fong’s Pizza.
But stalled projects and a lawsuit alleging Christensen owes at least $6 million in overdue loans and accusing him of attempted fraud have led city development staff to signal caution to the City Council about the plan for the Ingersoll plaza. The proposal called for UnityPoint to use the building for its newest Program of All-Inclusive Care for the Elderly, or PACE, facility.
An attorney representing Christensen declined to comment due to the ongoing litigation.
Christensen previously touted a more glamorous future for the plaza. In 2023, as the expiration of leases for tenants Dollar General and OfficeMax loomed, Christensen told the Des Moines Register that the shopping center, home of a Hy-Vee supermarket from 1957 to 1997, was drawing “honest interest” from Trader Joe’s.
The California-based gourmet grocery chain currently has a lone metro location in West Des Moines, and speculation about whether it might add another has been a subject of wide interest. A drawing card of Christensen’s 2700 Ingersoll Ave. property is that it has one of a limited number of large, streetside parking lots on the popular thoroughfare.
But a deal with Trader Joe’s never materialized, and according to the city permit database, the PACE center has been the only development to file for project permits involving the 32,437-square-foot building.
The architect withdrew the PACE site plans July 31, Cody Christensen, Des Moines’ director of development services, told the Register. UnityPoint spokesperson Kevin Kirkpatrick confirmed the company terminated its lease for the building July 24.
Kirkpatrick did not say why UnityPoint withdrew.
“Our commitment to expanding PACE services for seniors in central Iowa has not changed,” he said in an email. “We are actively exploring other locations and remain focused on finding the right site to support the long-term health care needs of the communities we serve.”
City staff opposes incentives for 2700 Ingersoll, citing risk
The proposed reuse for the shopping plaza had been on the verge of receiving city incentives, with five of the seven Des Moines City Council members voting to approve a preliminary development agreement to provide $850,000 in tax increment financing to offset an estimated $8.2 million in renovation costs. One council member voted no and Council member Joe Gatto abstained due to a potential conflict of interest, according to council minutes.
The June 8 vote came despite the warning from city staff about Jake Christensen, who was the primary developer at the time. He also is listed as the principal and registered agent of Ingersoll Properties Group LLC, which owns the building.
In a June 4 email to City Council members that the Register obtained through a public records request, city economic development administrator Carrie Kruse expressed concern about defaulted loans, delinquent taxes and the litigation involving Christensen.
The council originally had been scheduled to consider preliminary terms for the TIF at its March 9 meeting, but City Manager Scott Sanders withdrew the item, council minutes show. Before the item appeared on the council agenda in June, Christensen sought information from Kruse on how to advance the incentive deal for council consideration, according to Kruse’s email to the council.
“At the time, I had advised Jake that the circumstance described above materially affected the city’s ability to recommend additional real estate development incentives for the project,” Kruse wrote.
Shortly after, J. Elder, president of Elder Corp., a general contracting company, was named managing member of Ingersoll Properties Group LLC. But the change failed to assuage the city staff’s concerns about Christensen’s involvement, Kruse told the Register in an email July 30.
“The combination of pending litigation, prior development agreement defaults, outstanding obligations to the city, delinquent property taxes, and unresolved questions regarding the project’s sponsorship and authority presents a level of risk that, in my view, does not support the provision of additional public financial assistance at this time,” Kruse wrote in the June 4 email.
Council member Mike Simonson, himself a veteran developer, nevertheless voted for the project. He said he was swayed by a provision in the development agreement under which the developers, in exchange for the TIF, agreed to designate 50 parking spots on the property for public use for 15 years.
“That’s huge,” Simonson said, noting Ingersoll’s struggles with parking. He pointed to the recently constructed Star Lofts across Ingersoll from the plaza, which offers commercial space and apartments but has little parking.
“Parking is a premium, so that’s why I was excited and I really wanted to see that go,” he said.
Council member Carl Voss told the Register he voted in favor of the project because he felt the PACE program was a “good fit” for the plaza.
Council member Josh Mandelbaum cast the lone no vote. In an interview, Mandelbaum said he not only shares the staff’s concerns but he also believes public funds should incentivize developments that the area’s market is struggling to deliver, such as grocery stores and child day care centers.
Kruse said that with the senior day care site plan withdrawn, the city no longer expects to consider financial assistance for the project.
Christensen sued for allegedly defaulting on $6.1 million mortgage
Among concerns the city staff cited about Christensen was a lawsuit filed against him April 15 in Polk County District Court. It accused Christensen of fraud and failure to repay loans on other properties he is associated with in Des Moines.
Plaintiff Maddox Leasing LLC asked the court to approve foreclosure of a $6.1 million mortgage for three downtown Des Moines properties, all owned by LLCs associated with Christensen.
The mortgage listed 301 Grand Ave., home to multiple tenants including RDG Planning and Design, and a neighboring two-story office building at 516 Third St., according to the Polk County Assessor’s Office. A third building named in the suit, at 304 15th St., is home to Fitch Gallery, located in the Western Gateway of downtown.
In lieu of foreclosure, Christensen and Maddox Leasing representatives signed a forbearance agreement on March 10, setting a new repayment timeline.
Maddox, however, also alleges in the suit that Christensen committed fraud by “playing keep-away” with the mortgage for 304 15th St., failing to file it with the Polk County recorder while he tried to obtain financing from a third party. Christensen denies the allegation, according to court filings.
After Christensen failed to meet two payment deadlines and execute the 304 15th St. mortgage, attorneys for Maddox Leasing asked Polk County District Judge Heather Lauber for summary judgment, allowing foreclosure on the three downtown properties, according to a July 15 court filing.
An attorney for Christensen responded in an Aug. 3 filing contesting the request. It said there were “significant and substantial issues of material facts” with the obligations asserted by Maddox. The motion remains pending.
Investors attempt to retain funds from Christensen developments
Next door to the plaza is another troubled Christensen property: a 52,400-square-foot site with three vacant structures that he has had under on-and-off development, with city incentives, since 2019.
The centerpiece is a former Howard Johnson’s Motor Lodge, one of a chain of leisure hotels with restaurants and ice cream parlors that dotted the nation during the 1960s and 1970s, known for their bright orange roofs. Built in 1962 on a lot facing Grand Avenue and stretching to Ingersoll, the hotel was a local landmark until it was converted into apartments in 1988.
Christensen in 2019 launched a historic restoration aimed at converting it and a vacant medical office into an 85-room boutique hotel and restaurant dubbed The MoLo, leaning into the original structure’s mid-century style. The estimated $21.3 million renovation received approval for federal and state historic tax credits and would have generated $1.5 million in hotel/motel taxes during the duration of the development agreement, according to a city memo.
As the hospitality industry took a downturn during the COVID-19 pandemic, the project went on hiatus until 2023. To aid with increased construction costs from inflation, the Des Moines City Council increased the project’s overall TIF benefits to $2.9 million from $2.5 million.
Despite some alterations to the 2525 Grand Ave. property in the last four years, the project stalled again. The city issued a notice of default and the development agreement was terminated by mutual agreement, according to the email Kruse sent the council June 4.
Christensen also failed to complete a sidewalk improvement project along Grand Avenue, leaving it to the city to shoulder the $26,400 expense, Kruse’s email to the council noted. And she told the council Christensen owes nearly $47,000 in overdue property taxes on the property.
Maddox Leasing also is trying to recoup $600,00 related to what it calls “Ingersoll Molo,” along with investments in other Christensen affiliated LLCs, according to the forbearance agreement.
On May 15 this year, Christensen paid a partial installment of $314,725 to Maddox Leasing that was due at the start of the month. Even with the payment, interest on the debt has brought the total Christensen owes Maddox to more than $7 million, according to court documents filed July 17.
Attorneys representing Maddox Trust and Christensen declined the Register’s request for comment, citing the ongoing litigation. The future of the hotel property, about a block west of the Iowa governor’s mansion, Terrace Hill, is unclear.
Does Christensen Development have any ongoing projects?
Despite its troubles, Christensen Development remains active as co-partner in an ongoing project to build an apartment complex south of the East Village known as Foundry Lofts. The four-story structure planned for 509 SE Sixth St., the former home of Electric Motors Corp., received financing support from the City Council during its March 9 meeting, the same one in which the city manager pulled from the agenda the development agreement for 2700 Ingersoll.
The council approved $400,000 in Home Investment Partnership Program Funds for affordable housing at Foundry Lofts and a development agreement with Christensen Development and partner Gratus Development, based in Indiana.
The $15 million project would receive $625,000 in project-generated tax increment financing over 15 years, according to a memo accompanying the development agreement. The expected completion date for Foundry Lofts is late 2027.
Kate Kealey is a general assignment reporter for the Des Moines Register. Reach her at kkealey@registermedia.com or follow her on X at @Kkealey17.
This article originally appeared on Des Moines Register: UnityPoint ends Ingersoll project amid developer’s woes I Exclusive
Reporting by Kate Kealey, Des Moines Register / Des Moines Register
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By Kate Kealey, Des Moines Register | USA TODAY Network
