Market District in Des Moines Receives .5M in State Funding

Market District in Des Moines Receives $9.5M in State Funding

March 21, 2026 James Parker - Business Editor Business

The Iowa Economic Development Authority (IEDA) has approved $9.5 million in funding from the Iowa Reinvestment Act for the Market District development in Des Moines, a project aiming to revitalize a former industrial area east of the city’s East Village. The approval, made during an IEDA board meeting, also expands the existing Capital City Reinvestment District by 43 acres to encompass the 260-acre Market District site. This infusion of state funds is intended to spur significant private investment and transform a long-underutilized section of the city.

The Market District occupies land previously home to a mix of industrial uses, including a recycling center, scrap metal yards, auto body shops, and facilities operated by the city and MidAmerican Energy. The area is bisected by railroad tracks, adding complexity to the redevelopment effort. The IEDA’s decision follows a December vote by the Des Moines City Council requesting additional funding from the Iowa Reinvestment Act for the project, after the state agency opened a 90-day application window for existing reinvestment districts seeking additional funds. $9.5 million was allocated to the Market District, with the remaining $3.5 million of the available $13 million going to a reinvestment district in Fort Dodge.

Hotel and Parking Ramp Anchor Initial Investment

The $9.5 million will be allocated to two key components of the initial phase of development: a seven-story mixed-apply boutique hotel and luxury condominium project, estimated to cost $50 million, and a 500-space parking ramp valued at over $19.3 million. The hotel will feature 180 guestrooms, two floors of luxury condominiums, a full-service restaurant, retail space, and a rooftop amenity area including a pool and firepit. The parking ramp is intended to support not only the Market District development but also provide parking for the broader public. Construction on the hotel is slated to begin in the second quarter of 2027, with developers not expected to begin receiving tax credits until January 2028.

Broader Development Plans Envision a Mixed-Use Destination

The initial investment is part of a larger vision for the Market District, which ultimately aims to include 2,500 residential units and approximately 30,000 square feet of retail space. Developers, including JSC Properties and Rypma Properties, plan to acquire additional land from the city in a second phase to accommodate potential office space development. Just this month, plans for a six-story, 258-unit apartment building on Southeast Fourth Street were presented to the city’s Urban Design Review Board, representing the first planned construction within the Market District, with an anticipated start in late 2026 and completion by late 2028. Business Record has more details on the proposed apartment complex.

Leveraging the Iowa Reinvestment Act

The Iowa Reinvestment Act, established in 2021, provides tax incentives for transformative development projects in designated areas. The IEDA staff emphasized that the $9.5 million award to the Market District represents a rebate, estimated to be less than 20% of the projected hotel, motel, and sales tax revenue generated by the development. This structure aims to ensure that the public investment is offset by increased tax revenues. The Act has also been used to support other major projects in Des Moines, including the proposed Pro Iowa Soccer Stadium and Global Plaza, which received $23.5 million in prior funding. The IEDA website provides further information on the Iowa Reinvestment Act and its guidelines.

Economic Impact and Regional Attraction

Tim Rypma, president of Rypma Properties, described the IEDA funding as a “tremendous opportunity” for the Market District, hinting at further project announcements later this year. Developers estimate the overall Market District investment will exceed $600 million. Jim Cownie, founder of JSC Properties, and Rypma previously stated that the Market District, combined with the adjacent Two Rivers Park, is projected to attract an estimated 200,000 visitors annually. The Des Moines Register reported on the city’s ongoing efforts to secure additional funding for the parking infrastructure.

Capital City Reinvestment District Expansion

The expansion of the Capital City Reinvestment District to include the Market District now encompasses 116 acres, solidifying its position as a key area for economic development in Des Moines. The district previously included the Stadium District, Western Gateway, and Gray’s Landing neighborhoods. This broader designation allows for continued access to the Iowa Reinvestment Act funds and facilitates coordinated planning and investment across these interconnected areas.

Looking Ahead: Project Timelines and Next Steps

The approval of IEDA funding marks a significant milestone for the Market District development. The immediate next steps involve finalizing design plans for the hotel and parking ramp, securing necessary permits, and initiating construction in the second quarter of 2027. The completion of the first apartment building in late 2028 will further demonstrate the project’s momentum. Ongoing collaboration between the developers, the city of Des Moines, and the IEDA will be crucial to ensure the successful execution of this ambitious revitalization project. Further announcements regarding additional projects within the Market District are expected later in 2026, as developers continue to refine their plans and attract further investment.