General Growth had a different idea for Iowa River Landing

(copyright 2011, The Gazette)

General Growth Properties made a late-inning bid to bring the Von Maur department store to its Coral Ridge Mall before the store ultimately went to the city of Coralville's Iowa River Landing.

A conceptual site plan from late summer showed how the deal might have freed up space for Von Maur. It would have released several non-retail tenants so that they could relocate at Iowa River Landing.

Presented in a meeting with the city, the plan showed Iowa River Landing adding three current Coral Ridge Mall tenants - the Iowa Children's Museum, cinema and ice skating rink - but not the Von Maur department store that was announced as the retail anchor tenant for the landing project later in the month.

The plan, obtained by The Gazette from the city under an Iowa open records law request, did not get far with the city, which announced a deal to bring Von Maur to Iowa River Landing on Sept. 22.

“We were simply proposing an alternative that maximized the use of both properties,” said Doug Gross, a Des Moines attorney representing General Growth, in the company's only remarks to address the subject.

The plan was reviewed by members of the city's Iowa River Landing Committee that includes council members Mitch Gross and John Weihe. It was presented in the context of changes General Growth was considering in the mall.

“We met with Doug Gross, and said we'd work with them on the mall, but they wanted us to work with them on the mall and give them the Von Maur deal also,” Weihe said.

Coral Ridge Mall provides the bulk of the tax increment financing revenue that the city is using to develop Iowa River Landing, one possible reason General Growth could expect the city to take its interests to heart.

The city's development deal with Von Maur, which by some informed estimates exceed $15 million, was all but concluded when General Growth presented its offer, however.

“I think what this boiled down to was that General Growth wanted Von Maur,” said Coralville City Council member Mitch Gross, who did not meet with General Growth's representative. “It was a relationship that wasn't mutual.”

While General Growth offered to release the tenants from their mall leases, Mitch Gross said the company did not offer to build facilities for them at Iowa River Landing and they could potentially have relocated elsewhere.

“I don't know, to be honest, how realistic that plan was,” Coralville City Administrator Kelly Hayworth said. He said the entities General Growth proposed for relocation to Coral Ridge were mostly non-profit, and the discussions did not include any relocation payments.

The Iowa Children's Museum is a non-profit organization. The ice skating rink at the mall is operated by General Growth, and the 10-plex cinema at Coral Ridge Mall by Marcus Theaters.

Hayworth and Weihe both said the city is interested in bringing a cinema to Iowa River Landing, and council member Gross said he thought the Iowa Children's Museum would make a good addition if its building was funded.

Marcus Theaters spokesman Carlo Petrick said the company recently has invested a lot of money in its Coral Ridge 10 cinema and is not interested in relocating.

Iowa Children's Museum Director Deb Dunkhase said she was told in general terms that the relocation of the museum to Iowa River Landing was discussed in the context of Von Maur. The children's museum, which brings about 140,000 visitors per year to the mall, receives free rent worth about $700,000 from General Growth, and is “thrilled” to know that General Growth and the city are interested in preserving it as an asset to the community, Dunkhase said.

A structure identified in the General Growth site plan as “big box” retail was not a specific retailer, Hayworth said, but only was intended to indicate space that could be used to attract a retailer.

Von Maur is considered the linchpin of efforts to attract specialty retail tenants to Iowa River Landing. By promoting heavily and offering a large selection, department stores attract customers who then patronize smaller specialty stores.

Legislative threat

The Von Maur deal has added fuel to discussions in the Iowa General Assembly that Iowa should restrict use of tax increment financing. It remains unclear to what extent that discussion is being spurred along by General Growth.

“He (Doug Gross) pretty much said that if we didn't accept General Growth's deal, he was going to make it a legislative issue,” Mitch Gross, the Coralville City Council member, said.

Doug Gross declined to discuss the role of Von Maur in their Iowa River Landing discussion.

Weihe had several explanations for his lack of sympathy with General Growth.

The city of Coralville asked General Growth to be the primary developer for Iowa River Landing five years ago, he said, but General Growth declined.

Von Maur contacted General Growth about two years ago when it began to look west for another store location in the community, Weihe said, but General Growth - at that time in the midst of a bankruptcy reorganization - wasn't able to provide a clear answer.

Weihe also said covenants between the city and General Growth at the time Coral Ridge Mall was developed might be violated by removing the entertainment attractions.