By 2020, Kansas City's downtown may more resemble a neighborhood than a business center.
"I'd say it already is," says Kansas City, Missouri, City Councilman Ed Ford, whose district once included downtown. "We have more residents and probably less jobs than we did 10 years ago. I think we'll see that trend continuing."
Not probably. Definitely.
Downtown Kansas City lost 16,000 jobs between 2001 and 2011, despite City Hall's pouring billions of dollars into sprucing up the once-seedy core. Much of the employment loss is attributed to an aging stock of office buildings in the south loop, from which companies have fled in large numbers. Parking shortages and outmoded building configurations have made cheaper locales, such as Overland Park's Sprint Campus, or newly renovated buildings like Union Station preferable to stodgy skyscrapers from the 1960s, like Commerce Tower.
But even Commerce Tower's forthcoming redevelopment illustrates downtown's changing nature, from a place where lawyers and bankers work behind oaken desks to one that lures a younger generation with after-work outlets for spending discretionary income.
Last year, Kansas City Sustainable Partners, a consortium of luminaries including BNIM's Bob Berkebile, Screenland impresario Butch Rigby and EPR Properties CEO David Brain, bought the 30-story Commerce Tower, at Ninth Street and Main, which was in foreclosure. Instead of trying to lease the increasingly empty building to office tenants, the group plans to convert vacated floors to apartments, build out retail space and renovate some of the offices.
Commerce Tower's move to residential use reflects a larger development pattern downtown: New construction and old-building rehab are devoted to creating new places to live. This glut of new projects, both proposed and under way, has risen from the need for living spaces in a market in which the existing apartments are virtually all leased. These projects include massive new construction, such as Cordish Co.'s 25-story luxury apartment high-rise in the heart of the Kansas City Power & Light District and the more modest 24-unit complex along Gillham Road near 37th Street.
Longtime River Market developer George Birt is planning something in the middle: a $15 million, 137-apartment dwelling at Fourth Street and Wyandotte. Birt picked the spot in part due to its relative proximity to the start of the downtown streetcar line, which he believes will appeal to 20- and 30-somethings.
"They're going to glom on to mass transit," Birt tells The Pitch.
His thinking reflects that of other transit backers, who insist that the two miles of rail under construction will transform the look of downtown by 2020 and beyond.
Sean O'Byrne, vice president of the Downtown Council of Kansas City, says the streetcar could help fill empty spaces in those old office buildings along Main Street. One example: City Center Square, at 11th Street and Main, home mostly to plaintiffs' attorneys, investment bankers, empty floors and Jason's Deli.
"City Center Square was built severely underparked," O'Byrne says, referring to the two floors of underground parking serving a 30-story building. "Now you're going to have a streetcar that goes a mile in either direction that opens up all sorts of parking options."
Kansas City, Missouri, City Council members are stridently behind the $100 million-plus starter line as a means of catalyzing downtown development. That's $50 million a mile, so they had better be right. The investment has been brandished as a means to lessen the future need for tax incentives on new projects.
"It should," Ford says. "We approved that new downtown hotel without tax abatements."
Ford is referring to the 10-story hotel that Tennessee's Chartwell Hospitality plans to build at 16th Street and Baltimore. Chartwell declined what otherwise would likely have been a hefty incentive package from City Hall, prompting a seemingly incredulous story in The Kansas City Star that marveled at the prospect of taxpayer-free downtown development.
Yet Chartwell's project was followed by Cordish's One Light high-rise, at 13th Street and Walnut, which commanded an $8 million subsidy from City Hall, coupled with a tax abatement. Ford explains Cordish's subsidy as a means to usher in a higher tolerance for downtown rental rates, which would help bridge the gap between land and development costs and income from tenants.
"Next time someone constructs something new, hopefully it can be done without a subsidy," Ford says.
Not everyone is buying that philosophy.
"It's a little tough for some people, especially when you look at the workforce," says Donovan Mouton, once an aide to former Kansas City Mayor Kay Barnes who now works as a housing consultant for prospective developers. "You only have x number of people earning between $40,000 and $60,000, but the bulk of your workforce are those in the $20,000 to $30,000 range — teachers, bank tellers, policemen. Spending $1,100 a month in rent is pretty pricey for some people."
One Light is expected to fetch between $950 and $1,800 in rent, translating to about $1.75 a square foot. In bigger cities, high-end apartments fetch more than $2 a square foot.
"I don't think by 2020 that we become a Chicago or Minneapolis, where you can charge over $2 a square foot," Mouton says.
Still, downtown boosters hope for a more cosmopolitan south loop and Crossroads District by that time. They envision a city core populated less by men in pinstriped suits and women in pantsuits but and more by city dwellers wearing Chuck Taylors and maybe students from a proposed University of Missouri-Kansas City Downtown Arts Campus.
Updates on the potential Downtown Arts Campus have been few and far between since Julia Irene Kauffman, daughter of the late KC business mogul Ewing Kauffman, pledged $20 million for the campus's initial phase of construction, contingent upon UMKC raising $70 million on its own within three years.
Bringing the arts campus downtown, along with its 600 students, is viewed as adding another cultural attraction to a downtown that had virtually none a decade ago.
"For something like the Cordish tower, you get out and you walk and you have your choice of bars, restaurants, cultural attractions and schools," O'Byrne says. "It's worth it to be able to catch a movie or a play and a dinner rather than hop in your car and drive across suburbia to find those amenities that are generally downtown."
Downtown Kansas City
Location: 10th Street and Grand
Project value: About $40 million
Public nut: None so far
Details: YMCA of Greater Kansas City is trying to raise $40 million to build a new facility. UMB Bank donated a parking lot at 10th Street and Grand for the proposed building. Peter deSilva, UMB Bank president, is leading the fundraising charge while also seeking another $12 million to renovate the Linwood Boulevard YMCA and expand the Atchison, Kansas, facility. A downtown Y fits with the city's dream of making the core more like a neighborhood. The local YMCA caught flack for last year's proposal to shutter locations in Independence; Raytown; and Kansas City, Kansas. Only the KCK location was spared.
River Market West
Location: Fourth Street and Wyandotte
Project value: $16 million
Public nut: $2 million from a city bond issue for housing assistance, plus a tax abatement
Developer: Consolidated Development Partners
Details: Downtown's housing boom stretches north to the River Market, where developer George Birt plans to build a 137-unit, high-end apartment project. The building would replace an empty lot near the headquarters of Populous, one of the early adopters of River Market redevelopment. Birt's project has the benefit of being new construction, meaning added amenities, such as outdoor balconies, that historic renovation projects typically can't accommodate.
Location: 13th Street and Walnut
Project value: $79 million
Public nut: $8 million from a city bond issue for housing assistance, plus a tax abatement
Developer: Cordish Co.
Details: Cordish's long-awaited obligation to develop housing in the Power & Light District is finally on track with the Baltimore company's announcement that it will break ground on One Light, a 25-story high-rise. One Light will replace a curious little parking lot at the northwest corner of 13th and Walnut, just east of Cosentino's Downtown Market. Officials anticipate that 450 people will pay top dollar to live at One Light. Cordish is also planning to redevelop the Midland office space, at 13th Street and Baltimore, into high-end apartments. Cordish officials also expect to someday build more living quarters at the Power & Light District's southern edge along Truman Road.
Location: Generally east of City Hall
Project value: $350 million
Public nut: $12 million in blight removal and demolition, $19 million in tax-increment financing for a parking garage
Developer: VanTrust Real Estate, Swope Community Builders
Details: While some parts of downtown's redevelopment have moved quickly, the East Village has languished since the city announced plans to replace an empty bus station and seedy hotel with new buildings. JE Dunn built its new headquarters in 2010 and Swope Community Builders finished the East Village Apartments, a 50-unit affordable-housing project, in 2011. But not much else has happened in the proposed eight-block redevelopment. The General Services Administration once considered the area as a way out of the Bannister Federal Complex, but federal budget cuts killed those plans. However, VanTrust, a developer backed by the estate of late auto-dealer magnate Cecil Van Tuyl, has announced rough plans for a large apartment project and a possible office building.
Kansas City Marriott Downtown
Location: 16th Street and Baltimore
Project value: $46 million
Public nut: None
Developer: Chartwell Hospitality LLC
Details: Kansas City elected officials rejoiced, and some development lawyers groaned, when Tennessee's Chartwell Hospitality turned its back on incentives for a 250-room hotel downtown. The empty lot has long been considered a contender for a hotel, but veteran developer Whitney Kerr Sr. finally made it a reality. It's a far cry from the 1,000-room convention hotel that city officials still covet, but it represents the first new hotel construction in downtown in decades. (The President Hotel and the Aladdin were redevelopments of old buildings.) Land has been cleared at 16th Street and Main for a parking garage and possible retail development associated with the Marriott.
Commerce Tower redevelopment
Location: Ninth Street and Main
Project value: $70 million
Public nut: $3.2 million tax abatement, $23 million in historic tax credits, $600,000 in demolition tax credits and $2.8 million in brownfields tax credits
Developer: Kansas City Sustainable Development Partners
Details: Commerce Tower was left with huge vacancies after the Greater Kansas City Chamber of Commerce and the Kansas City Area Development Council moved to Union Station and KeyBank left for Overland Park's Sprint campus. Commerce Tower's erstwhile Los Angeles owner, who bought the building from the Kemper family, couldn't get the aging, asbestos-laden building leased up or sold, so Hertz LLC let it fall into foreclosure. A new local development consortium wants to refashion the building as a "vertical neighborhood" by converting empty office space into apartments and possibly adding some retail to the mix.
Power & Light Building
Location: 13th Street and Baltimore
Project value: $60 million
Public nut: Unclear. May ask for historic tax credits and tax-increment financing, according to the Star.
Details: The Gotham-style Power & Light Building is one of the city's most unusual architectural displays and most compelling sights on the downtown Kansas City skyline, but it has housed only an architectural firm on the first floor and pigeons on the rest. New York owner Gailoyd Enterprises has tried to sell it several times in the last three years, but each time the deal has fallen through. NorthPoint has announced plans for turning the building into apartments, contingent upon the city's help.
Thomas Corrigan Building
Location: 18th Street and Walnut
Project value: $22 million
Public nut: Unclear so far
Developer: Alan Waterman
Details: Thomas Corrigan and his brothers were streetcar developers in Kansas around the turn of the 20th century when fixed-rail transit was fashionable. Some years later, streetcars went out of style in Kansas City. Now streetcars are back in vogue with a two-mile downtown starter line under construction, just a block from a building named after Corrigan. Developer Alan Waterman has told reporters that the forthcoming streetcar line helped inspire him to buy the Corrigan Building — whose previous tenants have included the U.S. Postal Service and the Veterans Administration — and refashion it into 80 loft-style apartments.
Location: Troost Avenue, from 22nd to 27th streets
Project value: $50 million-plus
Public nut: Kansas City has committed more than $5 million to spruce up several blocks along Troost and has directed $250,000 in Community Development Block Grant funds for the Colonnade apartments. The Missouri Development Finance Board has approved $5 million in tax credits for a parking garage.
Developer: Beacon Hill Developers
Details: Sixteen years ago, the Beacon Hill neighborhood was supposed to become a harbinger of downtown redevelopment with the city using federal housing money to gobble up parcels of land along Troost. But money was misappropriated, and Kansas City's housing program, which had been entangled in federal receivership, couldn't get the project started. A joint venture among JE Dunn, Zimmer Real Estate and Taliaferro & Browne has gotten Beacon Hill's act together. Last year, the University of Missouri-Kansas City started building student housing there to serve the Hospital Hill campus. More apartments are on the way, along with townhouses.
Location: Seventh Street and Broadway
Project value: $30 million
Public nut: Historic tax credits and tax abatement
Developer: O'Reilly Development Co.
Details: Downtown lost one of its more charming aspects when Folgers Coffee shut down its roasting plant on Broadway, thus cutting off the sweet odor of roasting beans that occasionally wafted over the city. A Wisconsin company bought the roasting complex with an eye toward a residential conversion but couldn't garner support for the affordable-housing component of the plan. Now Springfield, Missouri's O'Reilly Development wants to turn the former coffee plant into market-rate lofts and apartments to offer more rental space to downtown's northwest quadrant.
Location: 12th Street and McGee
Project value: $20 million
Public nut: 25-year tax abatement
Developer: Arghom LLC
Details: Louis Curtiss, born in Canada the year that the Civil War ended, became an architect in the Midwest. His work earned him the moniker "The Frank Lloyd Wright of Kansas City." Among the buildings to his name that still stand are the Folly Theater and the Boley Building. While the Folly thrives as a playhouse and the Boley as an office building, Curtiss' Argyle Building across the street from the headquarters of Kansas City Public Schools has languished in the hands of several developers who failed to refashion it. Parking was always problematic for a residential conversion until City Hall sold developer Jim Wiss a small surface lot behind the Boley and leased 150 parking spaces in a parking garage that municipal employees use. That should help the boarded-up building become about 120 market-rate apartments.
Location: Between Third and Fifth streets, from Gillham Road to the Heart of America Bridge
Project value: $70 million
Public nut: $18 million from the Land Clearance for Redevelopment Authority
Developer: Columbus Park Developers
Details: It's rare to see single-family housing pop up in a downtown core dominated by apartments and condos, but Columbus Park Developers (a consortium that includes Kite Singleton and Zimmer Real Estate) has designs on a 20-acre redevelopment that would turn into a neighborhood within a neighborhood. Plans call for 360 market-rate single-family and multifamily housing units, plus some senior housing and commercial development.
Embassy Suites & Conference Center
Location: Ridgeview Road and Kansas Highway 10
Project value: $51 million
Public nut: $20 million through tax-increment financing and a community improvement district
Developer: Heart of America Group
Details: Workers recently broke ground on Olathe's long-coveted conference center that's set to open in 2015. The 200-room hotel is one thing for the city, but the adjoining 1,000-person conference room is something that Olathe officials tried to get hotel developer John Q. Hammonds to build on the city's southern edge. Hammonds couldn't come up with the money, but Illinois-based Heart of America Group saved the day for Olathe leaders hungry for a place to host seminars, conferences and other large-attendance events. City officials defend the 40 percent public subsidy for the project, saying the city itself won't own the project. (Overland Park owns and subsidizes its much larger convention center.)
Location: 135th Street and Nall
Project value: $575 million
Public nut: $30 million community improvement district, $81 million sales tax (STAR) bonds, $58 million private activity revenue bonds
Developer: Merrill Companies
Details: Every city, it seems, pines for a type of outdoor, all-inclusive lifestyle center. These pricey projects typically include high-end apartments, several blocks of shopping centers, entertainment venues, and on and on. Prairiefire might be one of the largest such projects in the metro area, on 60 acres of land in south Overland Park. In order to obtain STAR bonds — the powerful Kansas inducements that plow state sales taxes back into projects that fetch out-of-town tourists — Fred Merrill Jr. decided to build a museum that would furnish traveling exhibits from the American Museum of Natural History. Other tenants include REI and a Cinetopia Theater abutting Nicklaus Golf Club at LionsGate.
Location: 135th Street and Metcalf
Project value: $270 million
Public nut: $30 million transportation development district, $26 million community improvement district
Developer: Mike Schlup
Details: Corbin Park was supposed to become the big retail development along 135th Street. But in 2010, Omaha developer Cormac Co. plunged the project into bankruptcy after getting tagged by a long line of mechanic's liens for unpaid contractor work. Mike Schlup, a developer who went to prison in the 1990s for loan fraud and was busted again in the mid-aughts for not withholding taxes on worker paychecks and employing illegal immigrants, bought the bankrupt retail center in 2011. Corbin Park has been slow to fully develop after anchor tenants Von Maur and J.C. Penney opened their doors. Forthcoming tenants include Scheels and Off Broadway Shoe Warehouse.
Location: U.S. Highway 69 and College Boulevard
Project value: $350 million
Public nut: $7.2 million transportation development district, $6 million community improvement district
Developer: Ken Block
Details: Despite all the vehicle traffic traversing the area where College Boulevard, Highway 69 and Interstate 435 roughly meet, one big swath of land has sat empty. A developer back in the 1980s wanted to put an office complex and a hotel there and call it the Galleria, but the project never took off. Like a lot of Overland Park projects, City Place will be an amalgamation of office space, apartments, parking garage, retail and senior housing.
New sanctuary for United Methodist Church of the Resurrection
Location: 137th Street and Roe
Project value: $90 million
Public nut: None
Developer: United Methodist Church
Details: In three years, Leawood's Church of the Resurrection drummed up $63 million from members to improve the church in Leawood.
Location: Interstate 35 and Johnson Drive
Project value: $80 million
Public nut: $20 million in tax-increment financing
Details: Kansas City's strange obsession with IKEA, fueled by the Swedish furniture retailer's exclusivity, had locals barking at officials across the metro to get a big-box storefront here fast. Merriam landed the seller of meatballs and cheap, build-it-yourself furniture. Good thing for Merriam, too, which prior to landing the massive retailer had developed a reputation as a place where strip-mall dreams go to die. IKEA replaces the embarrassing Merriam Village project: a strip mall built upon a massive retaining wall whose anchor, Circuit City, couldn't open before the electronic retailer's 2009 bankruptcy and liquidation. IKEA says it will produce $80 million in sales for Merriam. Completion date: later this year.
South Kansas City, Missouri
Cerner campus at Bannister Mall
Location: The old Bannister Mall site at Blue Ridge Boulevard and Bannister Road
Project cost: $4.3 billion
Public nut: $1.6 billion
Developer: Cerner Corp.
Details: Bannister Mall was once a nice attraction in southeast Kansas City but became dilapidated when people stopped shopping there. The blight spread to the surrounding area, becoming a portrait of what dead malls can do to a community. The then-Kansas City Wizards (owned by Cerner principals) were supposed to build a new stadium there, but KCMO officials couldn't get their act together, and KCK lured the franchise away with a hefty tax-incentive package. But the type of incentive that has Sporting Kansas City playing in KCK is fairly minor compared with the offering that KCMO and Missouri have lent Cerner to build another office expansion at the Bannister Mall site. At least these incentives will clear up the hard-to-remove blight that Bannister Mall left behind. And if Cerner can produce the promised 15,000 jobs, the incentive may pay off.