Development

Armour Boulevard apartment building renaissance changes midtown

Updated: 2013-10-17T20:07:24Z

By KEVIN COLLISON

The Kansas City Star

Not long ago a young woman like Rachel wouldn’t have dreamed of living in an apartment building along Armour Boulevard.

A decade ago, Armour Boulevard, a strategic corridor in midtown Kansas City, was home to an oversize concentration of the city’s federal Section 8 housing for the poor. Crime was rampant there, and buildings were collapsing.

These days, thanks to Antheus Capital and its subsidiary, Mac Property Management, out-of-town investors who saw the promise of Armour and went big, the atmosphere has dramatically changed from blight to bourgeois.

Since 2006 the developers have invested well over $100 million to renovate two dozen grand, prewar apartment buildings into a new neighborhood along Armour from Troost Avenue to Broadway.

When completed it will have added 1,500 market-rate apartments to midtown. More than 1,200 new residents live there already.

“Armour, for a long time, had been a dangerous place,” said Kansas City Councilman Jim Glover, who represents the area. “When you go down (there) now at night now, you see young 20-somethings jogging and walking dogs.”

For Rachel, her $618-a-month apartment is her first place after leaving home in Prairie Village.

“It has an urban feel that I really like,” the 24-year-old said. “It’s close to UMKC, and it’s close to the Plaza and downtown.”

Mac Property’s arrival has been a “game-changer for midtown,” said Al Figuly of the Planned Industrial Expansion Authority. The state-chartered agency helped spearhead the public incentives, mostly property tax abatements, supporting the redevelopment.

“You can’t do a little at a time. You need a big commitment to be successful in a neighborhood,” he said.

In the mid-20th century, Armour Boulevard was the place to live in Kansas City for an earlier generation of young adults starting their careers. From World War I to World War II, a grand promenade of apartment-hotels were built along the broad, shady street. Many of them were nine to 12 stories tall.

But the neighborhood began to change dramatically around the 1980s.

“The apartment buildings at some point fell into the category of low-cost housing with very little security, a lot of poor people, a lot of drug issues,” said Maj. Wayne Stewart of the Kansas City Police Department, former commander of the police patrol area that included Armour.

“Of the half dozen things that used to keep me up at night, Armour was one,” Stewart said, “and (now) that’s dropped off the list.”

The remarkable revival that brought hundreds of mostly young adults to Armour began with a slight case of mistaken identity.

Antheus and Chicago-based Mac Property had been redeveloping apartment buildings in the Hyde Park area of Chicago, home to President Barack Obama, when a real estate listing for additional Hyde Park buildings came across their desks about 2005. None of the structures looked familiar though.

Intrigued, Eli Unger, co-founder of New Jersey-based Antheus, learned it was a national search issued by Figuly and Glover to solicit interest in Armour, which borders Kansas City’s Hyde Park neighborhood.

After visiting the properties in 2005, Unger and Peter Cassel, director of Mac Property, were impressed by the buildings but turned off by the neighborhood. They also thought that the asking price for the buildings was too high.

But a couple of years later, after a previous redevelopment effort fell through, Antheus and Mac took a second look. The developers reached an agreement with the Planned Industrial Expansion Authority to help acquire and redevelop five buildings: Park Central; Bellerive, 214 E. Armour Blvd.; Clyde Manor, 350 E. Armour Blvd.; Yankee Hill, 3430 Gillham Road; and an apartment building at 3411 Gillham Road.

But when it came to seeking private financing, there were no takers locally.

“I talked to eight or nine local lenders, and I heard about the same line: ‘Armour Boulevard — have you lost your mind?’” Unger said.

“In the 1980s and 1990s, bankers had lent money to developers who had failed. In some respect, our ignorance of the past and lack of battle scars allowed us to blithely march forward.”

The developer finally obtained financing from CIBC, a Canadian bank out of Toronto. With the help of a 25-year property tax abatement approved by the PIEA — 17 years at 100 percent, eight years at 50 percent — Mac Property moved ahead on 2007 with the first round of redevelopment projects.

Mac quickly discovered it was going to take more than redeveloping a handful of buildings to turn around the perception of the neighborhood.

“When you ignored the reality of Armour, it was a perfect location near the Country Club Plaza, Hospital Hill, downtown, UMKC, Crown Center. … It had all the ingredients and also nice homes nearby,” Unger said. “The impediment was, how to make Armour Boulevard nice.

“Our takeaway was, we can’t just buy one building and make it nice, why not all? It was an audacious starting point.”

So four years after winning the approval for its $30 million plan to redevelop the first round of historic apartment buildings, Mac Property returned to the PIEA with a $60 million plan to redevelop 11 more.

That total has since been increased to include the the Newbern, a twin nine-story building at 525 E. Armour Blvd.; the Ambassador, a nine-story building at 3560 Broadway; and the Richelieu, a 15-unit apartment building at 405-07 E. Armour Blvd.

Figuly said the PIEA was impressed with Mac Property’s record of being a long-term investor in its properties and its ability to manage them well.

“Their philosophy was one that was unique compared to the other folks,” he said. “They didn’t flip properties and had a philosophy of not just investing in the buildings but engaging the neighborhood.”

The PIEA board approved incentives to assist redeveloping the 11 additional buildings, this time a 95 percent abatement for 18 years. Mac was able to do several buildings representing about 25 percent of the apartment total without incentives.

The city also also committed $5 million to help using tax-increment financing revenues generated by the adjoining Midtown TIF District at 31st Street and Gillham Road where Costco and Home Depot are located.

One of the keys to bringing back the street, the developers said, was reaching out to the Police Department and the Jackson County prosecutor’s office. Police were informed about construction progress so they knew which buildings were occupied and which were not, and building managers got to know officers patrolling the area. Mac Property also hired off-duty cops to augment security, and installed a rooftop surveillance camera on one building.

The department also implemented a foot patrol program along Armour between Gillham and Troost that lasted about three months when the redevelopment push began in earnest three years ago. Police also worked closely to improve the landscaping around the buildings to reduce hiding places

“It’s fair to say crime dropped once we had that partnership with Peter and Mac Property,” Maj. Stewart said. “The area has more of a community feel to it.”

Rachel said she’s relaxed much of the time outside her building.

“I feel it’s gotten safer,” she said. “There’s a lot of people walking on the street.”

Unger said the first buildings to be completed on Armour caught the attention of people living in Westport, who were used to being urban pioneers.

“They weren’t put off by some of the social impediments and recommended us to others,” he said. “It happened faster than it might have.”

That first wave of interest was followed by a stroke of luck when a group of recent college graduates in the Teach for America program discovered the neighborhood.

“The Teach for America kids were attracted to our buildings because of their deep involvement with social justice issues,” Unger said. “Over the next few years, the next year’s class came through word of mouth.”

Josh Boehm, 22, a planner at BNIM Architects, was drawn to the Armour redevelopment because of the sweeping urban landscape created by the tall, ornate facades of the old buildings.

“It’s dense, comfortable to walk down, and it’s one of the Kansas City boulevards with big trees, grass and nice historic tall buildings,” he said. “I feel like I’m walking in a different city when I’m walking down Armour Boulevard.

“It’s nice to see new life poured into those older buildings, and having a company that recognizes the value of these buildings is great.”

Although Rachel and Boehm are part of the new generation discovering Armour, the work that Mac Property has done is impressing longtime residents as well.

“They did every single thing they promised,” said Aggie Stackhaus, a resident of the area for 34 years and a Kansas City councilwoman in the 1990s. “I walk that boulevard almost every day, and I’m seeing older people returning to those buildings, too.

“In all my years I never thought I’d see how they have changed that boulevard.”

With the recent opening of the Bellerive, the developers have noticed they’re starting to attract tenants from the Plaza as well. Monthly rents in the 150-unit building range from $950 for a one-bedroom to $1,200 for a two-bedroom. Its amenities include a club room, movie theater, coffee bar, pool and exercise room.

People in the Hyde Park Neighborhood Association welcome the new energy on Armour Boulevard.

“We really enjoy the fact the buildings are well-maintained and managed, and it’s bringing active new members to our community,” said Angie Splittgerber, president of the association.

Not that all challenges have disappeared on Armour. There are still a couple of buildings being used for Section 8 housing that have proven to be a problem, notably the Bainbridge at 900 E. Armour Blvd. The city is trying to push the owner of the Bainbridge, Eagle Point Enterprises of Maine, to do a better job managing the building.

“Midtown should be a diverse neighborhood, but to concentrate low-income people in one building doesn’t work,” Councilman Glover said.

Eagle Point officials could not be reached for comment.

The area also remains short on parking and neighborhood services. Right now there are about 500 parking spaces to serve the 1,500 apartments now in the works. That might work in Chicago, where Mac Property said about one-third of its tenants are willing to pay for parking, but it’s a struggle in Kansas City.

That’s why the company recently decided to purchase the Gillham Plaza, a five-story office building at 301 E. Armour Blvd. It’s the first office building to be acquired by Mac Property, and it includes a 300-space garage that can furnish parking for nearby apartment residents.

The developer also plans to redevelop the office building to provide services for its apartment residents, including a cafe, grocery store and studio space for artists and musicians.

The developers welcome the potential of a streetcar line being extended someday along Main Street from downtown to the Plaza and UMKC, saying that transit will only help make the apartments they’ve been developing more attractive.

“Lots of our folks work downtown, Crown Center and the Plaza. To have a transportation artery that connects those things is critical,” Cassel said.

Although Mac Property’s influence continues to grow in midtown, there have been setbacks.

Last month a plan to demolish several derelict buildings at 100-118 W. Armour Blvd. and replace them with a 40-unit apartment project was turned down by the City Landmark Commission.

Mac Property had wanted to redevelop the smaller apartment building and three duplexes on West Armour as a historic preservation project but determined that the cost was prohibitive. The plan to replace them with a new apartment building was opposed by the Old Hyde Park Historic District and Historic Kansas City.

Unger said that though his company was disappointed by the neighborhood’s opposition, it was encouraging that people living near the West Armour properties in question were so passionate about their area.

“It’s both frustrating and reassuring,” he said. “I think we’ve tried to be good stewards of buildings, and I think we’ve established our credentials as developers.

“The critics say it can be done for this amount, but we’ve done it and know it can’t. We can’t be financially irresponsible.”

At this point the developers are evaluating their next move. The action by the Landmark Commission puts a hold on any demolition for three years.

As for whether Mac Property might want to push their redevelopment of Armour farther east across Troost, the developer has an open mind.

“We’ve looked at buildings east of Troost, and there is some beautiful architecture there,” Unger said. “We won’t rule it out, but it won’t happen tomorrow.”

As for now, Glover is pleased with how Antheus and Mac Property have turned around the perception of Armour.

“It goes beyond restoring buildings,” he said.

“They’ve shown to the investment community there’s a market for market-rate apartments in the core of the city and the best strategy is not to do just a little but concentrate their investment and do the whole area.”

To reach Kevin Collison, call 816-234-4289 or send email to kcollison@kcstar.com. Follow him on Twitter @kckansascity

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