Capitol Letters: With the Wallace Building gone, what happens next?

State Rep. Megan Jones

The view to the northwest of the Iowa State Capitol is much different this summer, as the Wallace State Office Building no longer stands at the corner of East Ninth Street and Grand Avenue. While contractors are finishing their work to clear the site, some are now asking what comes next.

The Wallace Building opened in 1978, housing the Department of Agriculture and other state agencies. While Iowans marveled at the reflective glass used for the façade on Grand Avenue, the building had issues. It was not uncommon for state employees to regularly see an ambulance parked outside the building, with concerns about the HVAC system and its impact on those who worked in the building. Even after state laboratories were moved out of the building, the visits from EMS providers continued.

Discussion about the future of the Wallace Building started in earnest over a decade ago, when it was revealed that renovations to the building could run as high as $80 million. With alternative space available at a much lower cost, the state began shifting agencies to different locations. At the start of the 2025 legislative session, the building’s future became clear. The Governor’s office introduced a bill to allow the Department of Administrative Services to demolish the Wallace Building and then sell the land it was on along with the Capitol Complex parking garage (which is on the west side of Pennsylvania Avenue).

What was legislation necessary to sell this property? Iowa Code gives the director of the Department of Administrative Services (DAS) the authority to deal with state property. But Iowa Code section 8A.321 (8)(a) makes it clear who has the final say on any sale of real property on the Capitol Complex. The Code says:

“With the authorization of a constitutional majority of each house of the general assembly and approval by the governor, dispose of real property belonging to the state on the capitol complex upon terms, conditions, and consideration as the director may recommend. The proceeds of the sale of real property under this paragraph shall be deposited with the treasurer of state and credited to the general fund of the state.”

The Senate passed a bill to authorize the sale of this valuable piece of property during the 2025 session. But the proposed sale faced a lot of questions when the bill came to the House Appropriations Committee. It also generated a surprising amount of opposition from former legislators, who told committee members not to sell such a valuable piece of state property. And thus, the bill allowing the sale died in the Appropriations Committee.

While the Legislature refused to approve the sale of the Wallace Building, DAS decided to proceed with something they could do without legislative approval. In the fall of 2025, demolition began. The cost of the project was paid for with federal ARPA funds. By the end of the 2026 legislative session, the building was down and the clean-up under way. With little over a week to go in the fiscal year, all that is left to do is sodding the vacant property and restoring sidewalks and curbs.

What happens next at the corner of East Ninth and Grand? There are reports that once again, the Department of Administrative Services may be looking to try and sell the property. Without legislation, however, that will be tricky.

Contact Rep. Megan Jones by email: megan.jones@legis.iowa.gov