Urbandale–Des Moines border, Iowa, September 19, 2025
News Summary
A revised plan to build a smaller, multiuse arena at the 66-year-old Merle Hay Mall is advancing as backers seek to retain a $26.5 million state sales and hotel‑motel tax rebate. The project, trimmed to about $41.69 million from roughly $60 million, faces fresh state review and new financing conditions tied to local bond support and tenant agreements. The redesign replaces a lost lead sports tenant with a flexible venue featuring removable ice, an eight‑court volleyball center and event space. Officials must meet several financing and developer deadlines for rebate eligibility amid fiscal and market concerns.
Scaled-back Merle Hay Mall arena seeks part of $26.5 million state rebate amid new tenants and tightened review
A redesigned multiuse arena planned inside a 66-year-old shopping center that straddles the Urbandale–Des Moines border is asking to keep a previously awarded $26.5 million state tax rebate as it moves ahead with a smaller, remodeled plan. The project owner has reduced total construction costs and shifted the arena from a single-team facility to a multi-sport and events venue, but state reviewers have flagged the revisions as significant and set new financing and scheduling conditions.
What changed and why it matters
The arena was originally proposed as a 3,500-seat home for a junior hockey club and included a hotel, with total project estimates near $60 million. The team began ground work in 2022 but withdrew in 2024 after facing rising costs and contract issues. The mall’s owner elected to continue the redevelopment independently and retooled the plan, trimming the construction budget to about $41.69 million and redesigning the space for multiple tenants and uses.
New uses and tenants
The revised proposal converts the former department store shell into a multiuse arena with removable ice and permanent sport courts. Key additions include an eight-court volleyball training facility, expanded gym and performance spaces, and accommodations for community leagues and events. Several anchor users are being negotiated, including a college club and a junior hockey group, plus an existing pickleball operator that has reported strong use at another site on the property. The mall says these tenants and new programming will increase foot traffic and broaden the site’s user base.
How the financing would work
The original state rebate was awarded from a statewide competition that distributed $100 million in sales and hotel-motel tax rebates; this project received a $26.5 million share. Local support under the new plan includes a proposed bond issue from Urbandale in the range of $16.3 million to $20 million, which would be backed by the state rebate. Both Urbandale and Des Moines have also pledged a combined $3 million in tax-increment financing to help the development.
State review and conditions
State economic development staff called the design changes significant and recommended the board submit the modified proposal to a formal scoring process under board rules. Staff proposed appointing a scoring committee that would send results to the board’s due diligence committee before full-board action. Staff recommended conditional acceptance, listing several deadlines the project must meet: secure $41.7 million in financing by the end of March, select a hotel developer by the end of 2027, and close construction financing by the end of 2028. Additional conditions require selection and financing for a planned residential conversion on the site within set deadlines.
Local analysis and debate
Urbandale commissioned an independent study that concluded building the arena alone would not be sufficient to revive the mall. The study found mall sales rose only 1% since 2021 while inflation averaged 4.36% during the same period, and it forecasted lower foot traffic from the arena than mall estimates. Mall leadership disputed those findings and offered its own visitation numbers for 2024. City officials express concern that without new investment the aging mall could fall into disrepair, while others urge close scrutiny of state-backed financing given the repeated changes to scope, tenants and costs.
Next steps and timeline
Local councils have scheduled votes to restart construction approvals; the plan would then return for state scoring and final review. If the modified project wins final approvals and meets the financing conditions, organizers say construction could resume later in the year, with an optimistic completion target that was previously described as fall 2026. Deadlines set by state reviewers extend through 2028 for major financing and developer selections.
Background context
The mall has experienced several tenant shifts in recent years: major retailers relocated or redeveloped lots, and new recreational uses moved in, including a successful pickleball operation that opened in 2023 and reported tens of thousands of unique users. Those changes helped spur the owner’s decision to pivot the arena plan toward a multiuse model intended to increase the “universe of potential users” and support the wider property.
Frequently Asked Questions (FAQ)
What is the funding request?
The project is seeking to retain a previously awarded $26.5 million state sales and hotel-motel tax rebate that backed an earlier version of the arena plan.
How much will the redesigned arena cost?
The scaled-back construction estimate is about $41.69 million, down from an earlier estimate near $60 million.
Who will use the arena?
The redesign is for multiuse purposes: volleyball training and leagues, hockey on removable ice, community sports, and performance and event space. Negotiations are underway with several anchor tenants.
What local support is in place?
Urbandale plans to issue bonds in the range of $16.3 million to $20 million to help pay for construction. Urbandale and Des Moines have also pledged a combined $3 million via tax-increment financing.
What conditions did state reviewers set?
Key conditions include securing $41.7 million in financing by the end of March, naming a hotel developer by the end of 2027, closing arena construction financing by the end of 2028, and advancing a residential conversion project within its own deadlines.
What are the concerns?
An independent city-commissioned study found the arena alone may not reverse the mall’s economic decline and projected lower foot traffic than mall estimates; mall ownership disputes that assessment and cites higher visitation figures.
Key project features
| Item | Detail |
|---|---|
| State rebate | $26.5 million awarded from a $100 million statewide pool |
| Revised project cost | Approximately $41.69 million |
| Local financing | Urbandale bonds $16.3M–$20M; $3M total in TIF from both cities |
| Main uses | Removable ice sheet, eight permanent volleyball courts, gym/performance space |
| Developer/Owner | Chicago-based owner pursuing project independently |
| Key deadlines | Secure $41.7M financing by end of March; select hotel developer by end of 2027; close construction financing by end of 2028 |
| Recent timeline | Groundbreaking by team in 2022; team withdrew in 2024; new plan under review in 2025 |
Deeper Dive: News & Info About This Topic
Additional Resources
- Des Moines Register: IEDA board reviewing Merle Hay arena plan (Sept. 19, 2025)
- Wikipedia: Merle Hay Mall
- KCCI: Merle Hay Mall plans ice rink and entertainment facilities
- Google Search: Merle Hay Mall arena
- WHO13: Des Moines City Council approves changes to Merle Hay mall hockey arena project
- Google Scholar: Merle Hay Mall arena
- Des Moines Register: White Rabbit arcade may close amid hockey arena delays (June 6, 2025)
- Encyclopedia Britannica: Merle Hay Mall
- Business Record: Merle Hay Mall pursuing lease agreements for proposed arena
- Google News: Merle Hay Mall arena
Author: Construction TX News
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