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After Threat Of Demolition, Kansas City Council Approves Tax Breaks To Redevelop Historic Katz Drug Store

katz project 3.jpg
Lux Living
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Kansas City Council approved tax breaks Thursday for a project turning the historical Katz Drug Store building into an amenity center for a luxury developer.

The building and its iconic clock tower in Westport will become a luxury amenity center for upscale apartments nearby.

After weeks of debate, the Kansas City Council on Thursday approved tax breaks for a project to turn the historic Katz Drug Store in Westport into an amenity center for luxury apartments.

The move came just three weeks after the council rejected a development deal over disagreements about tax incentives. But a threat from the property owner to demolish the iconic building — plus some shuffling of money — ultimately pressured the council to reconsider the deal.

Threat of demolition brings the deal back to council

Initially, St. Louis-based Lux Living wanted a 15-year tax abatement — 10 years at 75% abatement and five years at 50% — to turn the building into a fitness center, pool, audio studio, coworking spaces and other amenities for residents of the accompanying upscale apartments.

Most of the amenities will be available only to residents except for a bistro café, which will be open to the public.

But a last-minute amendment from Councilman Eric Bunch reduced the term to 10 years and set requirements for affordable units and public parking. After objections from the developer, the council sunk the deal.

Following the council’s June vote, Redeemer Fellowship church, which owns the historic property, filed an application with the Kansas City Historic Preservation Commission to demolish it. According to the church’s website, it never wanted to tear down the building, but to put pressure on city council to restore the building.

“We do not have plans, hopes, or desires to demolish the Katz Building: we have taken many steps over the years toward its preservation and hope that City Council will work with the buyers to see this project completed,” the church stated.

After the church filed for the demolition permit, Bunch dropped his changes.

The council shuffled the project’s funds and brought it back for a second vote. The city will give the developer a 10-year, 75% tax abatement plus a $600,000 payment.

Councilwoman Katheryn Shields said the $600,000 will come from her district’s Public Improvement Advisory Committee fund, a program that allocates sales tax dollars for infrastructure in each district. Shields said the $600,000 will be refunded through tax revenues from the Midtown Tax Increment Financing District.

Public benefit versus historic preservation

Critics argue that the project will displace residents and increase rent.

Clay Marcusen told a city council committee Wednesday that the project only benefits wealthy Kansas Citians.

“[This is] just another tax abatement for high-end property development of housing that lower income persons cannot afford, which adds to the ongoing racial and economic injustice in our city,” Marcusen said.

Supporters argue that it’s important to preserve the historical building.

Laura Burkhalter is a member of Midtown KC Now, an organization that champions development projects in Midtown. She said this project will not displace any residents.

“This has been a vacant property for 10 years which hasn’t developed or created any tax revenue for the last 10 years and really underperformed the 10 years before that,” Burkhalter said Wednesday.

The developer plans to construct a six-story, 192 multifamily unit building behind the Katz building at Westport Road and Main Street. The project will cost $37.6 million.

This story was produced through a collaboration between KCUR and Missouri Business Alert.

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