Friday, October 16, 2009

Potential hotel site has churned with litigation

Posted by David Martin on Fri, Oct 16, 2009 at 10:00 AM

This week's Martin column notes the similarities in the arguments for a new convention hotel and past discussions that led to unprofitable investments in Bartle Hall and other tourism bubbles.

click to enlarge The oft-contested surface lot near 12th and Broadway
  • The oft-contested surface lot near 12th and Broadway
One of the sites that's being contemplated for a new hotel sits west of Bartle Hall and south of 12th Street. The property is not much to look at -- surface parking lots rarely are -- but it has a tumultuous history.

A California-based investor named Allan Carpenter and a partner, Dale Fredericks, bought the property in 1985. In the early '90s, they tried to convince the city it was an ideal spot for, yes, a convention hotel.

The Carpenter-Fredericks team had competition in the form of Texas billionaire H. Ross Perot, who controlled a partnership that sought to develop a convention hotel at the south end of Bartle Hall. City officials mulled the Perot proposal for years before concluding that it relied too heavily on taxpayer support.

Carpenter and Fredericks, meanwhile, began to fight among themselves over a purchase offer. The disagreement has played out in various circuit and appellate courts, even outlasting one of the interested parties. Carpenter died several years ago. His widow, Theodora, soldiers on in his stead.

In 1999, the City Council passed a redevelopment plan for a section of downtown that included the Carpenter-Fredericks property. The redeveloper, DST Realty, had hoped to build an office building on the site. (DST built a new headquarters for Kansas City Southern on adjacent land.) 

DST was unable to wrest the parking lot from its warring owners, however. Ultimately, the Kansas City Tax Increment Financing Commission filed a condemnation suit.

In 2005, a Jackson County judge approved the "taking" and awarded the Carpenter-Fredericks partnership $3.23 million. But by this time, six years had elapsed since the plan was created. Missouri TIF law says property cannot be acquired by eminent domain after five years from the date the redevelopment plan is adopted.

The case went all the way to the Missouri Supreme Court. In 2006, the justices ruled for the Carpenter-Fredericks partnership, nullifying the forced sale.

So there it has sat, collecting oil drips.

Rhonda Smiley, Carpenter's lawyer, says she is hopeful the Carpenter-Fredericks litigation, which has complicated redevelopment efforts, may finally be coming to an end. Earlier this year, her side received a favorable ruling from the Court of Appeals in western Missouri. "We're really close," she says.

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