Developer Jon Copaken has seven years to begin construction on what could be the first new major downtown office building in years under an amended agreement reached Wednesday with the Tax Increment Financing Commission of Kansas City.
Copaken is a principal with 112 Redevelopers LLC, which controls land at the northeast corner of 13th Street and Grand Boulevard. The property is currently a surface parking lot that serves the Sprint Center and nearby office buildings. Longtime downtowners will remember the site as the parking lot for Lil’ Jake’s, a popular barbecue restaurant until 2007.
The property was part of an expansive tax increment financing district, which includes the Power & Light District, first passed by the Kansas City Council in 2004.
TIF is a development incentive that redirects future taxes generated by a real estate project to reimburse developers for certain project costs.
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Plans for a new office building were first approved in 2006, but a complicated, drawn-out process to acquire the property and convey it to the Copaken group is partly why it remains surface parking today.
TIF projects are supposed to begin work within 10 years after the district is established. The Kansas City Council activated Copaken’s project on April 21. On Wednesday, the TIF Commission amended its agreement with Copaken, giving the developer seven years to start construction on the building and 10 years to finish it.
The agreement calls for a 270,000-square-foot structure that can be office, hotel or residential space, along with a 1,300-space parking garage.
Copaken said he is planning on building office space at the site. And it could be larger or smaller than 270,000 square feet. Copaken’s real estate firm has circulated a rendering that displays a 500,000-square-foot, spiral-shaped office tower that it has considered for the site.
Like many developers, Copaken would like to get started on the project sooner rather than later. But a construction start date depends on getting at least half of the available office space pre-leased before he can put a shovel in the ground.
“It’s a demand-driven project,” Copaken said after Wednesday’s TIF Commission meeting.
Copaken said having agreements with the City Council and TIF Commission in hand makes the property easier to market to prospective office tenants, but he adds that nothing is imminent.
Downtown Kansas City has made strides over the last decade in attracting new retail establishments and more recently residents to occupy apartments and condominiums. Landing large, private businesses has been a priority for downtown boosters.
Big companies such as Cerner, Burns & McDonnell and Freightquote have opted to build new office expansions in southern Kansas City in recent years. And while the General Services Administration moved 1,000 federal employees to Two Pershing Square in 2014, large, private corporations have remained elusive for downtown, with the exception of H&R Block’s headquarters building.
The downtown office vacancy rate hit 27.1 percent, according to research published in February by real estate firm Cushman & Wakefield. The same report indicated the vacancy rate for all the markets it studied stood at 18 percent. Even so, improvements and amenities downtown may make the market attractive to businesses.
Copaken’s attorney, Charles Miller, took TIF commissioners down memory lane on Wednesday, showing them photos of a grittier era of downtown before the Sprint Center and the Power & Light District arrived.
“We forget how things were,” said Troy Nash, a member of the TIF Commission who served on the Kansas City Council from 1999 to 2007. Downtown “was an ugly, nasty place.”
Steve Vockrodt: 816-234-4277