Another purchaser has emerged for the building that housed the Des Moines Social Club — this time, a group of buyers with local ties and a vested interest in the building.
The Des Moines City Council, which has final say over the sale of the building, historic Fire Station No. 1, 900 Mulberry St., will consider the purchase agreement at its meeting Monday. Prospective buyers Todd Millang and Paul Rottenberg, who have ties to the Malo restaurant long housed in the building, and Tyler Dingel will pay the Firehouse Transition Board $2.3 million for the property, according to city documents.
The new offer comes about a month after Matt Abbott, a Kansas City, Missouri, developer, backed out of a deal for undisclosed reasons.
The new buyers are conducting due diligence on the complex, which includes the Kum & Go Theater building, and do not have immediate plans for its renovation, said Deputy City Manager Matt Anderson.
"But we feel good," Anderson said. "It's a good local operator, with a good track record in hospitality and we think they'll be a really good neighbor."
Millang co-owns RōCA and Johnny’s Hall of Fame in downtown Des Moines and both he and Dingel market commercial real estate as senior vice presidents for CBRE l Hubbell Commercial. Rottenberg is founder and president of Orchestrate Hospitality, which in addition to Malo, the Latin restaurant that anchors the Social Club building, owns or manages several other notable downtown dining establishments, including Bubba, Centro and Django.
Millang joined the ownership of Malo in 2019, the year it underwent a menu and interior refresh.
The purchase agreement comes more than two years after the folding of the Social Club, an innovative arts and culture nonprofit that acquired the building from the city in 2012.
"When they closed their doors, we did see a little bit of a dip in some sales, and then shortly thereafter COVID hit," said Millang, adding that, as the anchor tenant since 2014, the Malo owners have unique insights into the complex.
"We understand what seems to maybe have worked and what definitely hasn't worked. We understand the hurdles with the property — and we also recognize the opportunities," he said.
Founded in 2008, the Social Club acquired the art deco-style building from the city for $600,000. It spent $6.9 million to renovate the building, where it hosted hundreds of community classes, staged festivals and showcased local artists, theater and bands.
The Social Club charged cut-rate prices for use of its events and work spaces in order to make arts and cultural programs accessible to the community. But in June 2019, its board announced it had been unable to find a sustainable funding model.
A transition board of directors made up of Des Moines business and civic leaders took over, with a $7 million plan to turn the building into a year-round indoor farmers market. It abandoned the effort after a consultant advised it would be too expensive, and instead decided to put the building on the market.
Abbott offered in September to buy the 84-year-old building for $3.1 million. He said he would renovate the first floor as commercial and retail space and the second floor as an upscale events venue, and convert the Kum & Go Theater into a boutique speakeasy.
Abbott backed out of the sale during his due-diligence period, and the building was put back on the market.
The new buyers have their own 60-day due-diligence period, but Millang said they "know the property really well." They are exploring several options and tenants for the main building and are looking to find a renter to operate the theater.
"Today we don't have a firm 'this is our plan and this is what we're going to do,'" Millang said. "We know the courtyard needs a financial investment and reboot to make it more user friendly.
"We're going to look at a lot of different options," he said.
The City Council, when selling the building in 2012, reserved the right to approve any changes in use or ownership within 10 years.
The council's goal was not only to preserve the structure, but to ensure the Social Club wouldn't get a windfall if it ended up selling it for more than it invested in renovations, Anderson said.
"Having a known entity like those guys puts everyone’s minds at ease," he said of the new buyers. "From the city’s standpoint, that being the historic Fire Station No. 1, somebody that will respect the architecture and its place in history is very important to us."
The city won't receive any of the proceeds of the sale, but it is owed $15,000 in payment-in-lieu-of-taxes installments that it had waived in exchange for the Social Club's removal of an antenna — work that was never carried out.
Anderson said that although the new purchase price is about $800,000 less than Abbott's offer, the Firehouse Transition Board would still be able to cover the building's mortgage. The board chair could not immediately be reached for comment.
This article originally appeared on Des Moines Register: Malo owners offer to buy Social Club complex in downtown Des Moines