The mostly empty New England Life building at Ninth and Wyandotte streets will become the New England Lofts building under an apartment conversion plan presented Wednesday to Kansas City’s Land Clearance for Redevelopment Authority.
The redevelopers asked for a 10-year, 100 percent property tax abatement to make the $8.7 million project feasible. Redevelopment authority commissioners agreed to the abatement request, coupled with an agreement to pay $12,000 a year in payments in lieu of taxes in years six through 10.
The seven-story red sandstone building at 112-120 W. Ninth Street, constructed in 1886 and 1887, is expected to become 32 market-rate apartments. The plan calls for a mix of studio, one- and two-bedroom units plus 20 parking spaces. Office use is planned to continue in a newer one-story Wyandotte annex that is included in the plan.
Developer John Bennett Jr. estimated monthly rental rates on one-bedroom units at about $1,100.
The historic U-shaped building, built in the Renaissance revival style, originally cost $450,000 to build on a downtown street corner property that was purchased for $100,000.
The redevelopment team is New England Lofts LLC, a business entity affiliated with Embassy Properties Inc. and the Bennett family, which has been involved in about 30 downtown rehabilitation projects.
According to tax records, the New England property had a 2015 property value of $1.1 million and an assessed taxable value of $352,000.
Under the proposal, the redevelopers agreed to use the property’s existing commercial property taxes as a base for the new plan. Reclassifying the property from commercial to residential would have caused a reduction in tax revenues to the taxing jurisdictions.
Taxing representatives from Jackson County and Kansas City Public Schools said they agreed to the abatement proposal.
The redeveloper’s 100 percent abatement request has a net present value of $552,907, according to an evaluation by Springsted. The Springsted study concluded that, based on cost and revenue assumptions, the apartment conversion could not occur without a public subsidy.
Along with more than $1 million in owner equity and a $5.25 million first mortgage from Equity Bank, the plan also seeks federal and state historic tax credits. The main building was added to the National Register of Historic Places in the mid-1970s.
Land Clearance for Redevelopment Authority staff members recommended the apartment conversion as consistent with the Central Business District Urban Renewal Plan.