Merle Hay Mall to replace vacant store with multipurpose arena

Abbell Associates shifts Merle Hay Mall arena plan to new build, IEDA advances amended proposal

Key takeaway: Mall owner Abbell Associates unveiled a revised plan to demolish the former Younkers building at Merle Hay Mall and build a new multipurpose arena. The Iowa Economic Development Authority (IEDA) board voted to send the amended proposal through a new scoring process, while attaching financing and timeline conditions before final rebate backing can be confirmed.

What the new plan would do

Abbell’s new proposal replaces an earlier idea to reuse the shell of the mall’s former Younkers store with a purpose-built arena. The Younkers building, vacated in 2018, would be demolished to make room for a new structure designed for multiple uses beyond hockey, including soccer, concerts and an eight-court volleyball training center, plus an accompanying hotel on the site. Abbell’s leadership says tearing down the existing structure should speed construction and reduce costs compared with extensive retrofit work that would have been required to raise roofs and remove much of the old building.

IEDA action and conditions

At a board meeting on Friday, Sept. 19, the IEDA voted to forward the amended district plan to a panel that will rescore the project under current rules. The board described the changes as significant and directed the IEDA director to appoint a committee to evaluate the revised plan. That committee will present its scoring to a due diligence committee, which will then recommend action to the full board.

The IEDA’s acceptance of the modified proposal came with specific conditions. Abbell must secure approximately $41.7 million in financing by the end of March (year unspecified in materials), select a hotel developer by the end of 2027, and close on construction financing by the end of 2028. The board also required Abbell to select a developer for a residential conversion of an on-site office building by the end of 2026 and to close financing for that residential conversion by the end of 2027.

Financing and local support

Under the revised plan, the city of Urbandale plans to issue between $16.3 million and $20 million in bonds to help pay for construction; those bonds would be backed by a sales and hotel-motel tax rebate if the IEDA rescores and reapproves the rebate. Urbandale and Des Moines have both pledged support for the project and together have committed $3 million in tax-increment financing (TIF). The board has also granted an extension of the original 2024 deadline to start construction while the revisions proceed through evaluation.

Cost adjustments and timeline

Abbell previously scaled the arena budget down to a less-ambitious $41.69 million after the original partner pulled out. Company leadership says building a new multi-use arena will not increase the cost compared with that revised figure. The organization cited higher steel prices and elevated interest rates as reasons that demolition and new construction are a prudent path.

Abbell’s timetable calls for starting demolition of the former Younkers building in late winter and opening the arena in fall 2027, with an estimated construction period of roughly 18 months if approvals and financing fall into place.

Background and project history

The Merle Hay Mall is 66 years old and sits on the Urbandale–Des Moines border. The arena plan traces to a 2020 statewide competition that awarded the original proposal a $26.5 million state rebate from a $100 million pool. That award was the largest in the competition at the time.

The original concept involved the local junior hockey team renovating the Younkers shell to replace a dated Urbandale facility. After inflation and pandemic-era cost increases made fundraising difficult, that team broke ground in 2022 but withdrew from the project in 2024. Abbell decided to pursue the arena on its own, shifting toward a narrower, lower-cost plan.

Local studies, debate and competing projects

Urbandale commissioned an update of sales tax projections that concluded the arena alone would not be enough to revitalize the mall. That study found mall sales rose only about 1% since 2021, well below inflation during the same period, and estimated foot traffic from the arena would fall short of owner projections. Abbell disputes those conclusions, citing its own research estimating 3.5 million mall visitors in 2024. Des Moines city leaders have expressed concern that the mall could deteriorate without new investment and remain publicly supportive of redevelopment steps.

The IEDA also awarded a separate $5 million tourism grant to a different plan for a roughly $40 million, 3,000-seat arena and convention center at another metro site. The two projects are similar in size and cost, but the Merle Hay proposal’s supporters say the location and programming will serve different parts of the region.

Next steps

The appointed scoring panel will review the amended plan and report to the IEDA’s due diligence group. The project must meet the financing and timeline conditions set by the IEDA before the sales and hotel-motel tax rebate can be used to secure bonds for construction. If milestones are met, demolition could begin late this winter and construction could move forward toward a fall 2027 opening.