June 30, 2011

Council turns down Campustown developer request

by Diana Pounds

The Ames City Council declined Tuesday night to extend an agreement with the developer that has been working on plans to revitalize Campustown.

Citing doubts that the city, university and Kansas-City based LANE4 Property Group could eventually arrive at an agreement on the proposed plan, the council opted to turn down the developer's proposed 60-day extension. Council members indicated they were receptive to continued discussions with LANE4, but wanted to invite others, including area residents and developers, to take a role in Campustown improvements.

The council's action came after Ames city manager Steve Schainker and ISU vice president for business and finance Warren Madden revealed several obstacles to moving forward on LANE4's proposed plans.

University concerns

Two key obstacles for Iowa State officials were a required university commitment to a 20-year lease on a new building and the lack of assurance that Campustown development would continue beyond that first building.

The new 60,000-square-foot building is proposed for the southeast corner of Welch Avenue and Lincoln Way. The first floor of the four-story structure was to be leased by a national drug/grocery chain, according to LANE4. The developer's proposal calls for Iowa State to lease all the office space on the upper three floors at $16 per square foot, a rate that Madden said is higher than many rental spaces in this area and Des Moines.

LANE4 would not commit to any additional redevelopment, though developers hoped the initial building might spur a second phase, west of Welch Avenue, to include a suite hotel, restaurant and retail space. Madden indicated the university needs commitment.

"Our desire, if we're going to be a player, is that this is more than just one office building in Campustown," he said.

A related unresolved issue in second-phase development is LANE4's request that Iowa State close its hotel at the Memorial Union.

Council concerns

Council members expressed concerns about financing the work, including adding parking and making improvements to city water and sewer lines.

The first phase plan includes a $3.1 million gap in funding, Schainker said. "Where will that come from? I don't know."

Another council issue is possible difficulties in acquiring the land for potential phase 2 development. Schainker pointed out that purchase options have not been secured for the proposed project and that the city might have to consider eminent domain to obtain land.


"Given the economic situation, which is out of our control, out of the university's control, out of LANE4's control, probably the most feasible solution is to put this project on hold until the economy gets better," council member Riad Mahayni said.

"I don't want the project to go away," said council member Jami Larson, "but I think it's time to start hearing other ideas."

Good vision, unfortunate timing

Madden applauded LANE4 for its overall plan and vision, as well as its strong working relationship with the city and university. He acknowledged that the timing is unfortunate.

"Everyone had good intentions, and for economic reasons, it hasn't all come together," he said.