The building is historic, and the story familiar.
Developers seeking to renovate the old Federal Reserve Building at 925 Grand told the 95-year-old tower's tale of woe to the City Council Planning, Zoning and Economic Development Committee on Wednesday.
They described and showed photos of disrepair and water damage in a structure now eight years vacant, lacking a fire sprinkler system and with only one working elevator for which repair parts must be custom-fabricated.
The building could have new productive life as an Embassy Suites hotel, they said, but making that feasible would require a complex package of tax incentives and bond financing.
Among their needs in order to get a 10.4 percent return on investment they listed $52 million in incentives including 20-year tax abatement and up to $135 million in bonds to underwrite financing.
The Colorado-based developer offered payments in lieu of taxes to school and library jurisdictions to guarantee that they would not lose revenue from property taxes that now amount to around $22,000 year.
The Historic Kansas City Foundation testified in favor of the incentives, as did Kevin Masters, who represents the Kansas City School District on the TIF Commission. Masters did qualify his remarks by saying that governing bodies still need to look into future incentive systems for developers that rely less heavily on school and library districts.
Jan Parks spoke on behalf of a coalition of citizens and organizations that successfully stopped the redevelopment of a Crossroads Arts District building that was to become a new BNIM headquarters. Parks said her group opposes the tax breaks in view of the $124 million in deferred maintenance faced by Kansas City schools.
“There has been quite enough of incentivizing hotel projects lately,” she told the committee. “We know your committee has the power to approve this project, but the public has the right to an interest including asking the public to vote on this if necessary. We are the taxpayers.”
Doug Stone, attorney for the developers, said that was a misguided slant on what is happening.
“There's no money that's going to flow out of this building that is being diverted from the school district," Stone said. "If anything, other things are going to happen because of what you're doing that's going to increase the school district's revenue."
Stone and Councilman Scott Taylor both commented that if nothing is done the building would eventually have to be torn down, ending even the meager tax revenues it now produces.
The committee approved the incentives and sent the matter to the full council for immediate consideration. Developers requested the expedited consideration, saying financing arrangements and other factors affecting costs were ripe for finalization.
A similar expedited schedule protected the recently approved major convention hotel adjacent to the Convention Center from an attempt at a forced public vote. In that matter, a court ruled that the vote would be illegal because it would potentially force the city and developers to default on agreements signed before the initiative petition drive was completed.
Steve Bell is afternoon news anchor and business news reporter for KCUR. He may be reached at 816-235-5173 or by email as steveb@kcur.org
