Two factions wage a pricey war for control of the Horace Mann building

The Ivanhoe neighborhood, on Kansas City's east side, covers a lot of ground but contains a small amount of wealth. Vacant land and empty buildings abound. At a city-sponsored workshop some years ago, residents proposed "Forgotten" and "I Hate My Neighborhood" as possible slogans.

From this unlikely setting, an animated property dispute has emerged. The battlefront has shifted from a city agency to the city council's chambers to a county courtroom, where partners at two top-flight law firms sit at opposite tables.

The court case hinges on a somewhat esoteric piece of law, though there have been interesting moments. I've seen a surprise witness, a lawyer get in the face of opposing counsel and an attempt to introduce an edition of The Pitch into evidence.

All this drama for an old school building near a house that recently sold for $12,009.

Let's begin the story in 2007. In the spring, leaders of the Ivanhoe Neighborhood Council, one of the city's most active and astute neighborhood groups, met with Chuck Gatson and Ken Bacchus, partners in a development company, Prairie Dog. Gatson is the former CEO of Swope Community Builders, a tax-exempt development company that works in low- and moderate-income neighborhoods. Bacchus served on the council before running the Housing and Economic Development Financial Corporation, a city agency driven into receivership in 2005 after spectacularly mishandling federal housing dollars.

Gatson and Bacchus talked with the Ivanhoe council about redeveloping the old Horace Mann School into apartments for seniors. The original section of the school is more than 100 years old. The Kansas City, Missouri, School District closed the building in 1979.

A month after Prairie Dog and Ivanhoe met, officials at Swope Community Builders asked the Planned Industrial Expansion Authority, a city agency, to designate a redevelopment area that included the Horace Mann School. (Swope and Ivanhoe had discussed redeveloping the school in 2004.) This put in motion a blight finding and a request from the PIEA for a plan to improve the site.

Swope and Gatson's new endeavor, Prairie Dog, each wanted to partner with the Ivanhoe council in the redevelopment of the school. The Ivanhoers preferred Prairie Dog. But the two sides came to an impasse. Margaret May, the neighborhood council's executive direc­tor, cited the size of Prairie Dog's fees and the company's reluctance to bring in an expert on historic tax credits — a necessity to complete the project.

So the Ivanhoe council decided to file its own application with the PIEA. The neighborhood group hired a consultant and an architect who worked on the Vine Street Lofts. In a letter to the PIEA, May stated concerns about the Ivanhoe council's ability to form a "trusting relationship" with Prairie Dog.

The PIEA awarded the development rights to Prairie Dog. The Ivanhoe council did not recede into the background, however. In April, two months after the PIEA notified the city that it had accepted Prairie Dog's proposal, Ivanhoe reached an agreement to buy the Horace Mann School from the operators of a Christian school, who purchased the building from the district in the 1980s.

Ivanhoe's deal created problems for Prairie Dog. In May, Mayor Mark Funkhouser introduced an ordinance stating the council's support for Ivanhoe's pursuit of a tax break similar to the one Prairie Dog had sought through the PIEA. Funkhouser said Ivanhoe would use the tax break to better the neighborhood. (In addition to being a self-proclaimed champion of "regular folks," Funkhouser, as auditor, had been a withering critic of the housing agency Bacchus and others drove into the ground.)

Gatson asked the city's Planning & Zoning Committee to reject the ordinance. He reminded the committee that Prairie Dog had been awarded the development rights. "We followed the rules like we're supposed to do," he said.

The committee was unsure what to do. Sharon Sanders Brooks said she supported the resolution but encouraged Ivanhoe and Prairie Dog to return to the bargaining table. Terry Riley, the committee chairman, said the resolution was a "clever" attempt to force the city to pick a side. "What it does is just tie your hand to one project or the other," he said.

The committee withheld making a decision. Meanwhile, the PIEA filed court papers in an effort to condemn the school.

Ivanhoe and Prairie Dog had continued to negotiate. But the talks, it was apparent, hit a few bumps. On August 13, the two sides gathered in Judge Justine Del Muro's courtroom and set a date to present evidence. When the meeting adjourned, an attorney for the PIEA, Mike "Fuzzy" White of Polsinelli Shalton Flanigan Suelthaus, hissed at Allison Bergman, who works at Lathrop & Gage, the firm Ivanhoe hired. "Missy, you're a liar," I heard White say. (White did not respond to an e-mail seeking elaboration.)

Ivanhoe is arguing that the PIEA's condemnation procedures have not followed the letter of the law. In one hearing, the Ivanhoe council's attorney suggested that Prairie Dog had benefited from favoritism. Al Figuly, the PIEA's executive director, answered questions on the stand about another city agency, the Industrial Development Authority, for which he is the executive director. Gatson sits on the Industrial Development Authority's board.