No, Kansas City’s new Ferris wheel didn’t get tax breaks — but the development around it might
The new Pennway Point entertainment district, which makes use of space that sat empty for years as industrial storage, is already making some neighbors in the Westside neighborhood uneasy. Developers are building the project without using tax money, but say they plan to seek incentives for the years ahead.
Seemingly overnight, residents and drivers on I-35 awoke to a new addition to the Kansas City skyline: a Ferris wheel.
The 150-foot wheel is how many people found out about the Pennway Point development that’s being constructed on the eastern edge of the Westside — a project that’s been in the works for years but not highly publicized until recently.
The former industrial site will include three acres of family-friendly entertainment with an additional three acres of parking, mostly under the bridges of I-35 and Broadway that surround the district.
Plans for Pennway Point include mini-golf, an alley filled with rescued neon signs, sand volleyball courts, yard games, seasonal ice skating, about 10 restaurants with space for food trucks, and, of course, the massive Ferris wheel.
“When you look from Union Station, you have this actually wonderfully walkable path over to Boulevard Brewing,” says Karyn Wilder, vice president and general manager for the KC Wheel. “We just become an extension of that. And I think that's one of the great things about this project is now when you walk through, you've got this wonderful development to go by.”
The wheel will have 36 fully enclosed, climate-controlled gondolas that each hold six people. The gondolas are wheelchair accessible and can hold over 200 people per ride.
Icon Experiences — which runs the KC Wheel as well as similar wheels in St. Louis and the Washington, D.C. area — says it will operate year-round, with a light package that people can purchase for their own events. In all, Icon Experiences expects to employ between 50-100 people.
When KCUR posted photos of the progress on the Ferris wheel, community members overwhelmingly thought the district was taking tax dollars away from public services.
“I would really just prefer funded public education, safe drivable roads, and a public water system that’s not crumbling,” one Instagram user commented. “No ac in our schools, nowhere affordable to live and we are subsidizing roundabouts for zillionaires and buying literal toys,” another wrote.
As it turns out, no tax dollars went to constructing the Ferris wheel. The KC Wheel is owned and operated separately from the Pennway Point entertainment district and will remain privately funded, Icon Experience told KCUR.
The developer for Pennway Point, 3D Development, has so far not taken any tax breaks from the city but says it plans to.
Vince Bryant, the founder of 3D Development, says that Pennway Point is adding value to an area that would not have been easily developable otherwise. The lot, which was the former home of the Carter Waters industrial building, sat as a sort of construction graveyard for years before Bryant and his team bought it.
Bryant says their goal was to turn the space into a community amenity.
“When people read about things, there are certainly negative questions: ‘Well, is the city doing this instead of affordable housing?’ The answer is just a resounding no,” Bryant said. “The city is not incenting this and not taking money away from affordable housing projects and others.”
Bryant argues that the location of Pennway Point is not conducive to housing.
“It is a site that has barriers on three sides of it,” Bryant said “It's a single access from the south because of the railroad and the roadways. It’s a unique site — I think we’ve been very fortunate to find the right use for it.”
How much will Pennway Point cost Kansas City?
Though Pennway Point developers did not seek incentives throughout the building of the project, Bryant says they do intend to apply for an Enhanced Enterprise Zone abatement and for Pennway Point to become a Community Improvement District.
“We've sought incentives on every project we've done downtown,” Bryant said. “This is the exception. And the reason is there isn't the need and we just felt it was the right thing to do.”
If granted by a city board — comprised of residents appointed by the mayor — the EEZ program gives developers a standard 50% property tax abatement for a 10-year period, meaning that Pennway Point developers would only pay half of their property taxes for a decade. Generally, these abatements are less controversial than more frequently given tax incentives that reduce the percentage developers pay by a higher amount.
After Pennway Point opens, Bryant expects the taxes they pay to rise from $23,000 for the entire three-acre site to about $123,000 — even with the EEZ abatement.
Meanwhile, a Community Improvement District is typically a tool for cities to encourage the redevelopment and future stabilization of neighborhoods — like the River Market or Main Street in Midtown. The CID will pay for improvements to the designated district through a sales tax, real property tax or special assessments.
Bryant plans to apply for a single-property CID that would only encompass Pennway Point and would generate revenue based on a 1% sales tax on income generated in the district.
If approved by the Kansas City Council, the Pennway Point CID would pay for infrastructure and maintenance costs by charging an additional sales tax on money spent inside the district. Developers expect to generate more than $20 million in sales annually.
The city is paying to update water lines and move some power lines underground for Pennway Point, but Bryant says that the remaining public improvements — like new sidewalks, underground storm and sanitary infrastructure and a Jefferson Street driveway — will be privately funded.
DaVinci KCwill oversee the food and drink halls inside Pennway Point: Barrel Hall and Talegate. Both of the venues are reclaimed buildings from the original site and boast individual vendors.
Barrel Hall includes a Boulevard Brewing Company taproom, a Viennese sausage stand from the owner of Grünauer, Bull Creek Distillery, and Chef J BBQ. Talegate will be an indoor/outdoor venue that includes burgers made from American Wagyu beef from the KC Cattle Company and drinks from The Brooksider bar
“It's all about delivering the best product for our community and really creating a family-friendly environment downtown where people can come and gather and recreate and enjoy food, beverage and entertainment in one space,” says Dante Passantino, managing partner at DaVinci KC. “It really does a great job of connecting the whole Pershing corridor.”
Kansas City Council member Eric Bunch, whose 4th District includes Pennway Point, says the entertainment district was a creative solution to a difficult-to-develop lot.
Bunch says he’s excited to take his family to Pennway Point, which he sees as “a place where parents can get together and bring their kids along and play outdoor games and they can have a beer or coffee or eat dinner or whatever.”
Despite his personal excitement for the project, Bunch says he does not support Pennway Point becoming a single-property CID.
“I've been in principle almost universally opposed to single-property CIDs,” Bunch said. “If folks are coming in and paying a 1% surcharge on all of their purchases, then that has to show a community benefit. I'm not a fan of CIDs continually being used as just another part of their financing stack. That's across the board. That's not picking on this one particular project. CIDs should not be an incentive for economic development or real estate development.”
Bryant argues that making Pennway Point a CID is a “win-win” way to upkeep the project by covering infrastructure and maintenance costs, while relegating the funding for those things to those who spend money inside the district, rather than the whole city.
“We should be applauded for not asking for longer and deeper traditional incentives,” Bryant said. “Almost every project that creates the type of economic activities that we're going to create would get a percentage of that back. We haven't asked for any of that.”
‘We are a community’
Angelica DeSimio, a Westside North representative in the Westside Neighborhood Association, is happy that the entertainment district made something of vacant land.
She likes the family-designated concept and is excited to take her 1-year-old on the Ferris wheel — but her excitement is dimmed by the fact that she feels her neighborhood has been ignored in plans for the district.
“I think there's a big line between working with the community and just coming in and not caring what they think,” DeSimio said. “There's slowly a pattern emerging of things that are just popping up in our neighborhood that haven't necessarily been in conversation with the neighbors who live here. This is a neighborhood. We are a community. Whether people like developers think so or not, this is the Westside.”
DeSimio’s reservations are shared by many Westside residents.
Lucas Orozco, a Sacred Heart representative on the Westside Neighborhood Association, worries about how the district will contribute to the ongoing gentrification of the Westside while adding parking constraints and traffic issues.
He lives close to the district and says traffic is already terrible during big events. While plans for Pennway Point have been percolating for years, Orozco says that Westsiders barely knew about it before construction began.
“I accept the fact that it's here, so I can only hope for the best,” Orozco said. “I don't want it to fail because then we're going to have a rusted-up Ferris wheel in five years and it's just going to be a eyesore. I do want it to succeed, but I want them to be involved with us. Don't just be there and ignore us and act like we don't exist.”
Both Orozco and DeSimio believe there is still room for productive conversations with the Pennway Point developers, and were quick to extend an invitation for them to join in Neighborhood Association meetings.
Bryant and Passantino both say their companies want to work with Westside residents in establishing Pennway Point, and that they’ve tried to communicate in the past.
Passantino says the timing for meetings with residents hasn’t worked out yet, but that he looks forward to future conversations. Bryant says the developers have a meeting planned with the neighborhood in the next few weeks.
“We think it's a great attribute for residents of the Westside, as we do feel that it's an attribute and amenity for the city,” Bryant said. “It is a central area of tourism, so we feel like the location is ideal. In the Westside neighborhood, we're going to have hundreds of new jobs. We're going to have events that people from kids to grandparents can go to.”
“At the end of the day, they're going to love it,” Bryant added. “It's just a matter of getting it built.”