Sep 1, 2023 - Business

The teetering future of a downtown soccer stadium

The Pro Iowa Stadium project would include an events plaza that could reduce street closures. Rendering: Courtesy of Pro Iowa

The future of a $95 million professional soccer stadium proposed downtown remains uncertain after about two months of financial renegotiations with local governments.

Why it matters: The 6,300-seat stadium is part of a larger redevelopment plan of an area where steel wheel and pesticide factory buildings were left vacant for decades following the discovery of environmental hazards.

Driving the news: There's a financial gap of "somewhere less than $20 million," Kyle Krause, CEO of the Krause Group and the soccer project's key backer, tells Axios.

The other side: Polk County Supervisors Chairperson Tom Hockensmith tells Axios that he doesn't support a request to allocate any more than the $7 million his government has already approved for the project.

  • City manager Scott Sanders tells us that "productive conversations" continue but also noted that DSM can't cover the project's budget gap.

Catch up fast: Krause announced a campaign four years ago to build what was then estimated as a $60 million stadium and home for a soccer club in the USL Championship, a second-tier soccer league.

  • Project advocates anticipated breaking ground as early as 2020 with the team beginning play in March 2022, but the pandemic contributed to a series of delays and increased costs.

Of note: The 2019 estimate did not include $20 million in the environmental cleanup work the city will need to cover before any development takes place on the site.

  • Those costs are included in recent project estimates.

State of play: The Krause Group finalized the sale of Kum & Go, their flagship company, to Maverik β€” Adventure's First Stop this week.

  • Krause tells Axios he now plans to shift more of his attention to the soccer project, which he and his wife, Sharon, have personally pledged $23 million towards.

Details: The stadium would be owned by the nonprofit Iowa Soccer Development Foundation, of which Krause is the president. But its financing is entwined with roughly $400 million in other downtown projects planned by the Krause Group.

  • If the soccer project doesn't move forward, the Krause Group will continue with its other redevelopment plans β€” which includes renovation of the former Gas Lamp building β€” but they may take longer, Krause says.
Buildings left vacant for decades near Martin Luther King Jr. Parkway and 15th Street were demolished in 2021, the site of a proposed soccer stadium project. Screenshot: Courtesy of the City of Des Moines

Zoom in: The Krause Group received nearly $11 million in tax incentives from the city payable over 20 years for the Krause Gateway Center (KGC) β€” the $151 million, six-story downtown office building constructed about five years ago.

  • Incentives are paid over 20 years and require KGC maintain 275 full-time employees at the site.
  • About 100 will remain at the KGC once employees are relocated in coming weeks following Tuesday's sale of Kum & Go and Solar Transport, Krause tells Axios.

The latest: Negotiations include the KGC tax incentives.

  • Roughly 100 associates of the soccer team would work out of the KGC if those are successful, Krause says.

What's next: A timeline for final renegotiations hasn't been established.

  • It's too early to speculate about any possible loss of tax incentives previously awarded to the KGC, DSM finance director Nick Schaul tells Axios.
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