Des Moines staff recommends keeping current development-agreement language while council presses for regional fixes and greater transparency

Cody Christiansen, Development Services director for the City of Des Moines, told the City Council at a Feb. 24 workshop that staff recommends keeping the city’s current development-agreement language and relying on state and federal enforcement programs to address concerns about unlicensed contractors, worker misclassification and unsafe job sites. "We recommend continuing to use our current development agreement language," Christiansen said.

Why it matters: the council is weighing whether to add contractual requirements tied to how projects are built — for example, requiring contractors to provide payroll records, lists of subcontractors or apprenticeship commitments — for projects that receive tax-increment financing (TIF) or other city incentives. Proponents say such requirements would raise accountability and help build a local construction workforce; developers and lenders warn about added administrative cost and contract risk.

Christiansen summarized conversations staff held with unions, developers and state agencies. Labor representatives raised recurring concerns about unlicensed out-of-state contractors, subcontractor lists not being available, alleged payroll misclassification (hourly workers treated as subcontractors), workers being paid in cash, uncertified welders and unsafe sites. Staff said the state Department of Inspections, Appeals and Licensing (DIAL) enforces contractor licensing and registration, Iowa Workforce Development handles worker-classification and payroll enforcement, and the state and federal OSHA programs address safety.

Staff also presented local data and policy context. The Des Moines metro issued about $2.34 billion in permitted commercial construction in 2024; Des Moines’ share was roughly $600 million. Permits for incentivized projects in Des Moines totaled about $130 million in 2024, representing about 5.5% of the metro total, staff said. Staff reminded the council of internal guardrails: any development agreement recommending more than 75% of project-generated TIF or longer than 15 years must go to the city debt-review committee; staff generally seeks TIF support of 15% or less of a project’s financing and prefers 10% or less.

On enforcement and cost, Christiansen said state programs already allow audits and complaints, and noted state penalties for contractor-registration violations (cited by staff as roughly $500 for a first violation and up to $5,000 for subsequent violations). He said the city’s building-inspection team and third-party special-inspection firms already monitor quality on larger projects.

Council members pressed for next steps and for practical changes. Council member Mandelbaum said she could not see how simply asking developers to provide a list of subcontractors or payroll information would increase costs and argued such transparency would help the public and state agencies follow up. "I fail to see how the basic requirements are gonna increase cost," Mandelbaum said. Council member Gatto and others urged regional coordination through MAC (the Metropolitan Planning/advocacy group) and the Central Iowa Code Consortium to prevent developers from shifting work to neighboring jurisdictions with looser requirements.

Several council members proposed targeted, limited changes that would include an opportunity to cure violations to address lenders’ concerns about contract defaults. One council member suggested mirroring state fines in development agreements so that a state enforcement fine is matched by a contractual consequence, creating an additional deterrent without requiring the city to duplicate investigations.

Staff cautioned that adding detailed monitoring and auditing obligations to development agreements would increase city administrative workload and potentially project costs; developers quoted to staff an estimated 3% administrative cost increase for reporting requirements and said projects built under apprenticeship requirements in parts of eastern Iowa had been 20–25% more expensive, according to the presentation. Staff also warned of legislative preemption risk and competitive pressures from neighboring municipalities if Des Moines imposes unique contractual layers.

Outcome and next steps: staff recommended continuing to use current development-agreement language, relying on state enforcement for licensure, payroll and safety investigations, and pursuing regional approaches if council seeks broader changes. Several council members asked staff to: (1) post clearer links and complaint forms on the city website, (2) gather the workforce-development and DIAL complaint-and-investigation data promised to the city, and (3) return with follow-up information and legal analysis on specific contract-language options (for example, requiring lists of subcontractors on request, payroll records redacted for privacy, or tying contractual consequences to state fines). The council directed staff to bring the issue back for further workshops and to coordinate with regional partners and MAC for possible collective action.

The workshop did not produce an immediate ordinance or vote. City staff and council members agreed to continue the discussion, collect additional state data, and pursue regional conversations before proposing binding new city-level contractual obligations.

Ending note: staff emphasized the trade-offs involved — increased transparency and local workforce goals versus administrative cost, lender concerns and regional competitiveness — and told the council they would return with more information and legal analysis to shape any contract-language changes.