A plan to update the Corrigan Building at 19th and Walnut streets got a public incentive boost Tuesday from Port KC board members, who approved a resolution to issue up to $50 million in bonds to finance the property’s acquisition and redevelopment.
The plan makes Port KC the owner, developer and general contractor for the Corrigan Station Project, which has 132,000 square feet of office space and 12,000 square feet of ground-floor retail space in the historic building.
In addition to renovating the existing 10-story office building, the project calls for construction of a three-story building to link the tower west to Main Street and a parking garage of up to 410 spaces across Walnut from the tower.
The arrangement freezes property taxes on the site for 20 years and creates a sale/leaseback structure similar to one the same board recently began considering for a nearby hotel development at 20th and Main streets.
The authority, formerly named the Port Authority of Kansas City, will own the Corrigan property for the 20-year period or until the intended development team takes title after making lease payments that cover the bonds’ debt service.
Corrigan Station was proposed a year ago as a $40 million mixed-use project by partners Copaken Brooks and 3D Development, led by Vince Bryant.
Bryant previously had planned to convert the partly vacant building into luxury apartments, but interest from prospective office tenants prompted a project shift that brought Copaken Brooks into the project.
The cost estimate has risen closer to $50 million, said Port KC president Michael Collins.
Collins said City Hall tapped Port KC to assist the Corrigan project for several reasons — its promise of job creation; its proximity to the new streetcar line, which is supported by Port KC as a transportation-related economic development tool; and the authority’s ability to act fairly quickly given that the building is not located in any existing tax increment financing or other defined economic development area.
Collins said Copaken Brooks and 3D Development technically now are agents for Port KC as the developer. The agents are in negotiation with an anchor tenant in the engineering/architecture industry.
Bryant, with 3D, deferred comment to Jon Copaken at Copaken Brooks. Copaken wasn’t available to discuss the project on Monday or Tuesday.
Kerrie Tyndall, the city’s director of economic development, said creating a TIF district would have required an additional four to six months and the prospective tenant needed to move quicker than that to commit to the Corrigan space.
Collins said the county, school district and other taxing districts will get a total of about $110,000 or $120,000 a year in existing property taxes on the Corrigan site, “but we see a net present value of $3.4 million over time because of the people who will work, eat and spend money and more than make up the difference on the abatement.”
According to Port KC’s information, Corrigan Station will create an estimated 182 construction jobs and 749 long-term jobs, with an average office salary of $55,000 for 662 office jobs and average pay of $30,000 for 88 retail jobs.
The taxing jurisdictions last year had asked for payments in lieu of taxes, but the deal doesn’t include them. Collins said he believed the approved arrangement would be a better deal for the taxing entities in the long run.
“Our job is to bring in jobs, and these jobs will pay into the city’s earnings tax,” Collins said. “We need energy and economic vibrancy. And anyone who thinks the Crossroads doesn’t still need economic development help isn’t looking at the big picture.”