DES MOINES — A massive economic development project years in the making has hit the rocks in Iowa’s capital city, with Des Moines officials pulling the plug on negotiations for a proposed professional soccer stadium and surrounding entertainment district after concluding the city could no longer afford the deal.
The City of Des Moines announced Wednesday, August 26, 2026, that it has ended seven years of negotiations with the Krause Group over redevelopment of the former DICO industrial site southwest of downtown (the area in Des Moines is pictured at top).
The ambitious project envisioned a professional soccer stadium, public plaza and a much larger surrounding redevelopment featuring hotels, entertainment, retail, housing and other commercial projects.
City leaders pointed squarely at worsening municipal finances as a major reason for backing away.
Recent Iowa property tax legislation is expected to leave Des Moines facing a $12 million city budget gap in fiscal year 2028, followed by another $5 million gap the next year, according to the city.
Those financial pressures created a funding gap in the stadium proposal that city officials said they could no longer responsibly commit taxpayers to covering.
“The City has been committed to finding a solution to build this soccer stadium at this location for the majority of the past decade,” Des Moines Mayor Connie Boesen said. “Despite the economic opportunities this stadium and surrounding district presented, the terms that the City had been considering at earlier points in negotiations are no longer feasible or responsible to our taxpayers.”
The collapse comes after years of government approvals, fundraising and maneuvering aimed at getting the project across the finish line.
As recently as April, project supporters were describing the stadium as essentially funded. The Iowa Soccer Development Foundation had reported raising more than $90.8 million, including more than $40 million in private contributions. Kyle and Sharon Krause had committed $23 million.
The project had also lined up millions of dollars in public assistance, including money connected to Iowa’s Reinvestment District program, a $5 million Destination Iowa award, Polk County funding and millions in proposed Des Moines assistance.
NIT reported earlier this year that the Iowa Economic Development Authority approved an amended Capital City Reinvestment District plan for Des Moines. The Capital City district included the Stadium Neighborhood, Western Gateway and Gray’s Landing and had previously been approved for a maximum state reinvestment benefit of $23.5 million.
The proposed soccer stadium was intended to anchor redevelopment of the former DICO property, a contaminated industrial property designated as an EPA Superfund site.
Plans called for a stadium capable of hosting professional men’s and women’s soccer, along with a Global Plaza that could host festivals and other community gatherings.
Earlier financial documents described a stadium project of roughly $87 million, while later estimates had climbed to approximately $90 million to $95 million as construction costs increased. The broader Capital City Reinvestment District was much larger, with additional proposed hotels, an entertainment venue, retail operations and other redevelopment projects.
The City of Des Moines had already committed to helping with environmental remediation of the former industrial site and construction of the Global Plaza.
But Wednesday’s announcement makes clear the city’s appetite for additional financial exposure has evaporated.
“In this new environment of fiscal constraints, the City must evaluate every major commitment not only for its economic-development potential, but also for its long-term financial exposure, opportunity cost, and effect on the City’s ability to sustain core services,” Boesen said.
The decision represents a dramatic turnaround for a project that appeared only months ago to finally be moving toward construction.
In December 2025, Des Moines officials approved a $7 million tax increment financing package connected with the stadium project. Supporters at the time characterized the money as a major missing piece needed to finally get construction underway.
The city had also moved forward in June with a proposed 50-year ground lease covering nearly 25 acres of the city-owned DICO property to the Iowa Soccer Development Foundation for construction of the stadium and adjoining plaza.
Now those plans are in serious doubt.
The city said it has not determined what will happen next with the city-owned DICO site.
Economic Development Administrator Carrie Kruse said Des Moines will continue pursuing other public-private development projects and remains interested in opportunities involving professional sports.
The city also indicated that professional soccer itself may not necessarily be dead in Des Moines, saying officials will continue evaluating opportunities to bring both men’s and women’s professional soccer to the city.
But the long-discussed stadium district involving the Krause Group is no longer moving forward under the negotiated arrangement.
The setback comes as Iowa communities continue aggressively competing for state economic-development assistance. Just days ago, NIT reported that the Iowa Economic Development Authority Board approved approximately $7.6 million for economic-development projects across Iowa, including nearly $1.74 million headed to projects in Northern Iowa.
For Des Moines, however, one of the state’s most prominent and long-running redevelopment proposals is suddenly back to the drawing board.