econboy wrote:If Wellmark chooses WDSM over DSM then Des Moines proper will know what it has to do to keep bringing large employers downtown: 'Make it less espensive.'
Bottom line is, the city of Des Moines is WAY too expensive to build in for a city it's size. Some will be willing to pay the costs, but some also won't and for good reason.
Norwalker wrote:DMRyan wrote:Today is the day.
Based on the Wellmark memo, or do you know of an announcement?
Wellmark to build downtown
$175 million headquarters planned; incentives lead company to reject W.D.M. site
BY S.P. DINNEN AND DAVID ELBERT
REGISTER BUSINESS WRITERS
September 15, 2007
COPYRIGHT 2007, Des Moines Register and Tribune Company
Wellmark Blue Cross and Blue Shield will build a new $175 million headquarters in downtown Des Moines, rejecting a suburban location, executives said Friday.
Group Vice President Cliff Gold said the health insurer signed a deal Friday to gain control of 6.5 acres on the north side of Grand Avenue between 11th and 14th streets, most from Iowa Health-Des Moines.
The project includes a 2,000-car parking garage between 11th and 12th streets, and a 500,000-square-foot headquarters in either one or two buildings between 12th and 14th streets.
Wellmark wrestled for months over whether to remain downtown or move to West Des Moines with its 1,600 workers. The company purchased 66 acres of land there early this summer, but in the end decided to stay downtown.
"We have gone through a rigorous selection process, weighed all the options and determined that remaining in downtown Des Moines made the best sense," said John Forsyth, Wellmark's chairman and chief executive.
City and state government units still need to approve zoning and incentive packages. And the site needs clearance from environmental regulators before construction can begin in the spring of 2008.
Des Moines will provide a number of incentives consistent with what the city did for Wells Fargo Financial and Allied Insurance when they built new headquarters in recent years, said City Manager Rick Clark.
He declined to put a dollar amount on the incentives before the actual package is presented to the City Council at a Sept. 24 meeting, but Gold said the combination of state and local incentives is more than $10 million.
He said that, with the incentives, the cost differential between downtown and West Des Moines was "about a wash."
The city's incentives will be in four areas, Clark said.
- The city will shoulder the burden of straightening out High Street to provide a little more room for the project.
- Eventually, the city will help extend the downtown skywalk to the building. That may take some time because the nearest connection now is at Ninth Street and Grand Avenue.
- Some type of mass transit encouragement for Wellmark employees to take the bus will be included.
- Tax increment financing will be use to rebate some property tax money to Wellmark. Clark declined to say how much TIF money might be involved.
Among other things, he said, TIF money will be used to make the new building LEED certified, a designation for buildings that are energy-efficient and use environmentally friendly building technology.
The city could also use TIF money to pay some of the cost of removing chemicals from the property now occupied by a dry cleaner.
The city will work with businesses located in the area to find new locations within the city, Clark said. City officials also helped negotiate the sale of parcels of land on the building site not owned by Iowa Health Systems.
Clark described the Wellmark decision as "an extraordinary deal," because of the number of landowners involved and the fact that Iowa Health Systems had at one time planned to use the land for its own expansion.
"This is a home run," Des Moines City Councilman Chris Coleman said. "This is a homegrown corporation that is one of the most prestigious in the country, and they have a vision for downtown development that is green and has healthy lifestyles."
Wellmark's decision puts Des Moines at 1-1 this summer on retaining insurance company head offices. Aviva USA decided last month to leave Des Moines in favor of a 71-acre tract of land in West Des Moines. The annuities and life insurance company said it selected West Des Moines in part because it needs land flexibility as it bumps its employee count from 800 to perhaps 1,200.
Wellmark has more modest growth plans - perhaps as many as 100 new employees in the next few years, according to Gold. But just like Aviva, it was operating from several buildings and wanted to consolidate operations.
Siting a 21st-century office proved to be as difficult as designing one. As employees were asked about how they would lay out their work space, they also were quizzed on a preferred location. Two-thirds of them voted for downtown.
Advantages to a downtown site include a central location, access to transportation and sticking to a 68-year history with the central business district, Gold said. But it costs more to build downtown, and it's tougher to assemble needed land, he said.
Iowa Health-Des Moines came through with property that it has been acquiring south of Iowa Methodist Medical Center. It and Wellmark reached a deal on Friday for the land.
Gold said that Wellmark has adequate resources to pay for constructing the building and equipping it.
"We don't think we'll need to borrow," he said. The insurer won't expect customers to pay any extra for the building, and he said Wellmark is merely swapping rented space in five buildings for purchased space.
RDG in Des Moines and HOK in Kansas City will design the project, Gold said.
RDG is the architect for another major downtown project, the Davis Brown Tower, a 13-story mixed-use building now under construction on 10th Street across from the Hotel Fort Des Moines.
HOK is the firm that designed downtown's 801 Grand, Iowa's tallest building.
DMRyan wrote:Were you waiting up all night for that news Ingersoll?
dogbo wrote:Wellmark to build downtown. The Cyclones win. All is right in the world again.
doMORE! wrote:Anyone know any history behind the townhouse that will be torn down? Anyone ever been inside? Is it currently used as a commercial or residential space? I'm all for downtown development, but it makes me really sad to this building go. I'm always intrigued when I drive past it.
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