Council selects White Lotus Group to advance redevelopment of 602 Robert DeRay Drive, members call for strict due diligence

The Des Moines City Council voted 7-0 on Dec. 8 to direct staff to begin negotiations with White Lotus Group to pursue rehabilitation and redevelopment of the armory at 602 Robert DeRay Drive, with a provision to reissue a request for proposals if negotiations do not produce acceptable terms.

Councilmembers who questioned the selection emphasized the early stage of the process and urged legal and financial safeguards. One councilmember said staff should require buyback provisions and other protections "to make sure that we are not in a situation where... we can reclaim the property" if the developer fails to complete the project. Another cited reporting about related projects elsewhere and asked staff to confirm there are no legal or financial issues in other jurisdictions.

Staff explained the vote authorizes the city to negotiate preliminary terms only; any final development agreement and use of historic tax credits would return to the council for approval. Staff noted the proposals were not apples-to-apples: one bidder proposed bringing equity and asked for the building, while a competing bidder proposed purchasing the building but did not show equity. Councilmembers said staff must compare proposals on equivalent terms.

The motion approved by the council directs staff to pursue the White Lotus proposal and, if negotiations fail or undisclosed legal issues arise, to either shift to the alternate proposal or reissue an RFP. Council discussion stressed the complexity of rehabilitating older, historically designated buildings and the need for robust protections in any agreement, including addressing the uncertain availability of historic tax credits.

Next steps: Staff will continue due diligence and return with recommended terms and, if appropriate, a development agreement for council consideration.