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New downtown streetcar carries hopes for development

Updated: 2013-11-30T02:52:18Z

By KEVIN COLLISON

The Kansas City Star

If you’re looking for some solid — and tasty — evidence that the city’s decision to build a $100 million streetcar line downtown is prompting spinoff development, order some pho next spring from Jack Nguyen.

Nguyen plans to open a Vietnamese restaurant in a building at 500 Grand Blvd. that’s been empty and overlooked the past couple of years. He is leasing the space because it’s on the two-mile streetcar line linking Crown Center with the River Market and expected to open in 2015.

“People will take the streetcar who live in the downtown area to the River Market for lunch and dinner, and I also expect the streetcar will bring more tourists,” Nguyen said. “We expect more foot traffic in the River Market.”

After decades of trying, Kansas City finally is on the cusp of joining the dozens of other American cities that have invested in rail transit in recent years. And like other places, rail transit is viewed as being as much about encouraging development as moving people.

“We believe one of the single best investment opportunities in the country is transit-oriented development,” said Ed McMahon, a senior resident fellow at the Urban Land Institute in Washington. “The number of cities that have gotten into the rail side of things has grown rapidly.”

In addition to Nguyen’s restaurant, a couple of other developments have been announced in which the streetcar’s pending arrival figured prominently.

Most notably, a Colorado developer wants to build a five-story apartment building on what’s now a surface parking lot at 1914 Main St. And another group of local developers says the streetcar reinforced the decision to redevelop the old Corrigan Building at 1828 Walnut St. into 82 luxury apartments.

Not surprisingly, though, there’s some hyperbole rolling down the track as well.

The Downtown Council has released a map showing more than a half billion dollars of projects that have been announced since serious discussion of a streetcar plan began about three years ago.

They range from the proposed $71 million redevelopment of Commerce Tower at 911 Main into apartments to the opening of Anton’s Taproom at 1601 Main and even a $5 million garage being built in the Crossroads Arts District to serve the Webster House at 17th and Wyandotte streets.

Sean O’Byrne, vice president of business development for the Downtown Council, said the projects were included on his organization’s map because they were aided or prompted by the streetcar discussion.

“On average, we get two or three calls a week from developers, both local and national, inquiring about being located in close proximity to the streetcar line,” he said. “Several have put money down and purchased ground and are going through the process.”

But with some exceptions, many of the projects on the map appear to have little connection to the streetcar other than being within the transportation development district the city established to help pay for it.

And none relies on the streetcar to replace any of the parking required for a project to be successful.

“We weren’t even aware of the streetcar possibility when we put the building under contract,” said Bruce Michael, a Detroit developer who wants to renovate the historic Brookfield Building at 11th Street and Baltimore Avenue into apartments. “Our investors and lenders demand parking even if it doesn’t get used.”

Psychological impact

Like many other downtown developers, however, Michael said the arrival of the streetcar would have a powerful psychological effect, particularly for the younger adults who consider rail transit the mark of a progressive city.

“A streetcar is one of those things that will be attractive to our tenants,” he said. “Younger people these days are very much into being green, driving less and using mass transit more.”

Colorado developer Scott Richardson, whose company, Linden Street Partners, wants to build the apartments at 1914 Main, said the streetcar is what drew his attention to Kansas City. It’s biggest appeal, he said, was the fact hundreds of riders will pass by the $10 million project daily.

“We believe that it’s critical to have eyes on your project,” he said. “That’s why we want to be on the block rather than a block away.”

Richardson said the streetcar also is generating buzz about the Crossroads area. The route will run through the heart of the area of older industrial and commercial buildings that is home to many artists, galleries and residential lofts.

“This project will add a sense of density and a sense of place to the Crossroads,” he said. “It’s on people’s minds, and we hope to be part of it.”

On the other end of downtown, developer George Birt said having the streetcar running through the River Market would be helpful to the 137-unit River Market West apartment project now being built at 228 W. Fourth St.

“Having the streetcar 11/2 blocks away is another reason to rent in the building,” Birt said. “The new generation of millennials likes the rail transit like they like Google Fiber. It’s another amenity, basically.”

Despite that affection for mass transit, however, Birt is not pulling back on another important amenity to apartment dwellers — adequate parking.

He will provide the same ratio of parking spaces to tenants as he would have if the streetcar didn’t exist, one car per bedroom.

That’s the same practical approach being pursued by Michael on his Brookfield redevelopment proposal. He is seeking to lease parking in two nearby garages to serve his potential apartment residents.

“The only cities in the United States that you don’t need parking is New York and probably San Francisco,” he said. “In the Midwest, even Chicago, when you develop in the Loop, the city requires parking, and most people still need a car.”

A surge in interest

Gib Kerr, a vice president at Cassidy Turley, specializes in the downtown real estate market. He said the pace of inquiries had picked up considerably since the streetcar plan became real.

“Any property downtown that’s under consideration, at some point the streetcar comes up as a big positive,” he said.

The developers behind the proposal to convert the 30-story Commerce Tower into a “vertical neighborhood” of 265 apartments along with office and retail space were drawn to the fact a streetcar station was planned at its front door. They also are buying its accompanying 249-space garage.

“Our decision to commit to residential and other services for millennials and other folks is tied to that streetcar,” said architect Bob Berkebile, one of the development partners involved with Commerce Tower.

And while the developers of the Corrigan Building also noted its proximity to a planned streetcar station at 19th and Main, their development deal calls for buying two parking lots at 1805 Main and 1823 Walnut that will provide 91 spaces for apartment residents.

One of the important reasons the city chose Main Street as the primary route for its first streetcar line was its economic development potential, said Councilman Russ Johnson.

“We did do a lot of studies to optimize development with the alignment,” said Johnson, one of the most vocal streetcar advocates. “When you look at economic development, Main Street was the best corridor in downtown.”

Factors contributing to that choice included opportunities to redevelop the many surface parking lots along the route and to replace smaller buildings with larger ones.

The city’s planning director, Bob Langenkamp, understands the appeal of streetcars to developers.

“One of the significant advantages of fixed-rail transit is permanence,” he said. “That makes it conducive to supporting real estate development.”

The city is preparing a transit-oriented development plan to encourage investment. It already has guaranteed to process in half the normal time any development plan within the boundaries of the district established to fund the streetcar.

“We’re hoping for a seamless experience,” said Rick Usher, assistant city manager and coordinator for downtown projects.

To accomplish that goal, the city has designated staff to be the equivalent of a “concierge” for developers, walking them through everything from getting building permits to obtaining a liquor license.

Birt’s River Market West project is the first to receive the red carpet treatment under the new approach.

“We’re the guinea pig project that’s going through the expedited process,” he said. “So far, so good. The cooperation is much better with the departments and code administrators, and they get back to you quicker.”

Langenkamp said the city also had eliminated its requirements for off-street parking in a zone roughly two blocks on both sides of the streetcar route. Providing off-street parking often has been a big hurdle for retailers, restaurants and other businesses wanting to open downtown.

Still, Langenkamp acknowledges it will take some time before businesses will be able to take advantage of those more liberal parking standards.

“I think that until the streetcar system becomes more of a system, there will still be a market demand for parking, regardless of what the zoning requires,” he said.

Looking for extensions

Most people agree that until the Kansas City streetcar becomes something more than a shuttle between Crown Center and the River Market, its full development potential won’t be realized.

The city already is contemplating extensions south on Main Street as far as the University of Missouri-Kansas City and eastward for several miles on Independence Avenue and either 31st Street or Linwood Boulevard.

“On the first two miles, we went through a learning curve when it comes to economic development,” said Johnson, the line’s big proponent on the City Council. “We made the right choice, and now we’re expanding that knowledge with our choice for future alignments.”

Councilman Jim Glover, who also has had a significant role encouraging the economic development side of the streetcar project, said ultimately a more walkable, pedestrian-friendly development pattern will emerge as the system expands.

“You’ll see people living and working on the streetcar line, and it will diminish the need for parking,” he said. “I think developers will eventually see that.”

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

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