Crossroads battle pits hotel vs. billboard

04/04/2014 5:40 PM

04/04/2014 6:11 PM

A developer’s plan to build a $16 million hotel in the Crossroads Arts District is bumping into a longstanding tenant on the property — a billboard erected in 1992.

Jason Swords is working on the 110-room Hilton Home2 Suites deal on behalf of Overland Park-based True North Hotel Group. The five-story hotel is being proposed for the almost vacant southeast corner of 20th and Main streets along the downtown streetcar route.

Towering in the way, however, is a billboard owned by Lamar Advertising. The sign is protected by a “perpetual” visual easement that says nothing can obstruct its view.

“Our intent is to build an extended-stay Hilton hotel and invest a lot of money on that spot,” Swords said at a Kansas City Council committee meeting last week. “A billboard is not something we want on a piece of property we’re going to make that investment on.”

It also doesn’t help that the closed Walnut Street ramp off the Main Street viaduct runs through the development site, but the developer said the city plans to remove that structure.

“We are looking at options as far as removal of the (Walnut) flyway,” said Sean Demory, a spokesman for the Public Works Department.

Lamar is challenging the city’s effort to declare the billboard blighted and acquire it through eminent domain.

In a hearing before the council’s Planning, Zoning and Economic Development Committee, attorney Jim Bowers, who is representing Lamar, referred to the 2005 U.S. Supreme Court decision Kelo v. City of New London, Conn.

In that decision, the high court reaffirmed it was proper for local governments to acquire private property for development if it was part of a “carefully considered economic development plan” that did not benefit a particular business but the entire community by creating jobs and tax revenues.

“This is very much a property rights case in the vein of the Kelo Supreme Court decision,” Bowers told the committee. “The city is taking a property from one owner and giving it to another for the purpose of economic development.”

Bowers also said Lamar wasn’t informed about the city’s condemnation plan until March 3. The city made a $250,000 offer for the billboard and its easements in a letter dated March 12 and gave the firm 30 days to respond or face eminent domain.

The council committee decided to delay consideration of the condemnation plan for two weeks, but in a follow-up interview, Bowers, an attorney with the White Goss law firm, said he was still “perplexed” at the city’s effort.

The visual easement for the billboard was negotiated in 2006 with Hereford KC Realty, owner of the former Hereford House restaurant that occupied the northeast corner of 20th and Main. It was destroyed by an arson fire in 2008. The property, except the billboard, is now owned by Great American Bank.

“In our view, it would appear the billboard could remain and the hotel could still go up,” Bowers said. “I don’t know if there’s a conflict. I also think they could build it without violating the easement.”

But Brad Wiens, executive vice president of True North Hotel Group, said it would not be possible to build the hotel with the billboard there, particularly because the city has asked the developer to reorient the project.

“The sign is an eyesore, and the city doesn’t want it there,” he said.

The original design called for the hotel to face 20th Street. The city wants an L-shape building that would front both 20th and Main. That orientation would give the project more visibility from the streetcar route along Main.

“We love the Crossroads and the availability of amenities, including its restaurants and shops,” Wiens said. “The revitalization of downtown is great, and we want to be part of it.”

The city also is planning a $4.2 million overhaul of a five-block stretch of 20th Street between McGee Street and Southwest Boulevard. The project, expected to begin this spring, calls for reducing the traffic lanes, adding a bike lane, widening sidewalks, installing benches and planting landscaping.

True North owns two other hotels in the city, the Fairfax Inn at 30th and Main and the Country Club Plaza Residence Inn at 46th and Broadway.

Wiens said this would be the first Hilton Home2 Suites in the area. The brand is billed as having contemporary extended-stay suites with kitchen areas.

At the council committee meeting, Swords told members the developer had hoped to close on its acquisition of the property April 28. The delay in considering the condemnation plan will require that date to be renegotiated.

The hotel proposal also will be seeking tax incentives from the city. Swords wants to use the tax increment financing program, but the project is being reviewed by the city’s new AdvanceKC economic development evaluation process.

Under AdvanceKC, development applications are reviewed by a committee that determines whether the project needs financial help and which incentive program would be appropriate.

If the billboard issue is resolved and the necessary incentives approved, construction will start late this year, with completion in about 12 months.

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