Des Moines Buccaneers officials are delaying development of their new hockey arena at the Merle Hay Mall.
Executives with the junior hockey team announced in a news release Thursday that they are having trouble securing private funds for the project, which will turn the former Younkers department store into a 3,500-seat arena. The Buccaneers blamed the delay on rising loan interest rates and construction costs, as well as “economic jitters.”
The mall straddles the border of Urbandale and Des Moines, and the two cities sponsored the project in a successful request for $26.5 million of state funding. They have asked the Iowa Economic Development Authority for a six-month extension on a deadline to show that the team has secured enough private money to finish the renovation.
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IEDA officials originally asked the team to show proof of funding by the end of June. The agency’s board will consider the cities’ request during a meeting Friday.
Des Moines and Urbandale officials also have asked the IEDA to delay a deadline to raise private funds for a planned, separate training arena at the mall. The Buccaneers owners currently need to show they have the money by the end of June 2023.
According to the application for public funds the cities submitted in April, the Buccaneers’ owners planned to help fund the main arena project by borrowing $20 million and obtaining an $8.9 million equity stake from an unnamed, private company. Lending interest rates have increased this year as the Federal Reserve’s Open Markets Committee attempts to slow the rate of inflation, increasing the cost of taking out private debt.
It’s not immediately clear whether the delay in fundraising will push back the date of the first game at the mall. One of the team’s owners, Michael Devlin, told the Des Moines Register during a groundbreaking ceremony in May that he planned for the team to start playing in the new arena by next October — the start of the 2023-24 season.
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In its news release Thursday, the team said the project is still “on track for completion during the 2023-24 season.” Devlin later clarified that he is reviewing the construction schedule with the contractor.
Devlin said in a statement Thursday that the team also is struggling to meet its deadlines because it is paying maintenance costs on its current arena on Hickman Road in Urbandale, which suffered major damage to its roof during the August 2020 derecho.
“It’s akin to having one foot on the dock and the other in the boat for a brief moment,” Devlin said, “but we’ll get where we need to be, and the Buccaneers will have a better future and be a better team for it.”
The arena is not the only major planned development in the metro that has been delayed this year. The Krause Group, the parent company of Kum & Go, announced in June it was delaying plans for construction of a downtown soccer stadium by about a year, citing increased construction costs.
The new Buccaneers arena is a focal point in a broader redevelopment of the Merle Hay Mall. Kohl’s is building a new location on the site of the mall’s former Sear store and will vacate its current spot adjacent to the future arena. The Buccaneers then plan to build extra rinks and the training center there.
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Urbandale officials plan to help fund the arena with a tax break. Assistant Economic Development Director Aaron DeJong said Thursday that he doesn’t know when they will present a proposed development agreement to the City Council.
“It is related to the other financing sources, and since those sources need more time to finalize, the Development Agreement will come to Council for consideration after that,” he said in an email.
Merle Hay Investors CEO Liz Holland said in a statement that Kohl’s will finish its new store this fall. She added that new restaurants and other attractions will open soon as well.
“Merle Hay will be a new place when the Bucs Arena opens,” she said.