It has been more than two years since Kansas City Mayor Sly James moved into City Hall, and when it comes to economic development, a sense of deja vu still lingers in his mahogany-paneled, 29th-floor office.
The last time the mayor sat down with The Star for an extensive interview on development, in November 2011, the big topics were a possible convention hotel, the prospects for a streetcar, the idea of a single terminal at Kansas City International Airport, the metropolitan Border War and overhauling the Kansas City Economic Development Corp., the city’s umbrella development agency.
Not much has changed.
Though a streetcar plan pushed by James has been approved between Crown Center and River Market, its funding has been challenged in court. The city still is searching for an affordable hotel deal; the airport issue has erupted into a full-blown controversy; the border raids continue; and the EDC discussion drags on.
The mayor did help resolve the festering West Edge development debacle with a deal that lets VanTrust Real Estate complete what’s now called the Plaza Vista. The office-hotel-retail project is to open this fall with the Polsinelli law firm as its main tenant.
And James supported giving the Cordish Co. an $8 million cash incentive to build an apartment tower at 13th and Walnut streets and renovate the old Midland building, a residential plan that would add 318 apartments. Construction was expected to have started by now, but a late fall start is the latest word.
The mayor agreed recently to offer his midterm take on several development questions:
What’s the latest regarding a downtown convention hotel?
“I am, along with others on the (City) Council and in the manager’s office, very much committed to trying to find a way to do this, but we’re also very committed to finding a way to do it that’s not overly burdensome to the city.
“The financing plan is the key, and that’s why we haven’t done it yet. There are options that have been presented, but at this point financing is a booger. And we’re not ready to jump on anything that’s more risk than we want to accept.
“We’re not willing to create a new funding stream via a vote. We want to minimize any impact it has on our balance sheet that would negatively impact our bond rating. We are willing to do as much as we can on an incentive basis, but we are cash poor.”
Would the city be willing to use its credit to back a convention hotel bond?
“It depends on the overall deal ... if the deal is so great in one area that risk is minimized in another. The problem is, until we have a whole package deal in front of us, it’s hard for us to organize it. We are working with an independent company (Strategic Advisory Group of Atlanta) to help us analyze deals as they come through.”
Do you have a preferred hotel site?
“I do not. I prefer the site that’s going to be the best and costs the least.
“I can tell you I’ve met with at least three potential convention groups in the last month or so. The question is always the same: ‘Are you going to have some new hotel rooms?’”
Are there any active hotel development deals being discussed?
“We are actively looking at three potential deals, but I’m not going to tell you who they are.”
How about reports that Cordish has approached the city about developing a hotel?
“I don’t think they’re interested in a hotel deal. I think they’re interested in a residential deal that would be adjacent to or part of a bigger hotel package, but they wouldn’t be the hotel people.”
(A side note: Several sources inside and outside City Hall confirm the city has been approached on a potential redevelopment deal on the block where the historic Power Light Building is located at 14th Street and Baltimore Avenue. The property is currently under contract to an undisclosed buyer.
(Under the proposal, Omni Hotels Resorts would develop a hotel on a vacant lot west of the Power Light Building, and Cordish would redevelop the old skyscraper into apartments. Omni officials could not be reached for comment, and Cordish officials declined to comment.)
Let’s talk about transportation. Any preference for a streetcar extension?
“I recognize that we are looking at a number of alternative routes. I think there is a clear connection between going south to the University of Missouri-Kansas City, particularly if the (Music) Conservatory move to downtown is viable. ... When you look at it just logically and when you think about methods of paying for it, from Union Station to UMKC seems like a logical move.
“I also think that 31st Street or Linwood from Main to out east to the stadiums would be an excellent route, too. The transportation development that might occur on 31st or Linwood would be beneficial.
“The east to west routes are important, because I think that’s where the cross-pollination is. That’s what brings the economic development opportunities. Transportation helps people to get from their homes to jobs.”
Let’s talk about the airport debate. Have mistakes been made rolling this out to the public?
“I think we probably got out ahead of everything in talking about it in the early stages, but that’s over and done with.”
How about the process now?
“I think the process is going exactly how I wanted it to go. We’ve got some really smart people, and I think they’re doing a pretty good job, from what I understand, of looking at this, going to airport school and learning a lot.
“I go back to what I’ve said from day one: We have to be fact-and-data based to resolve major issues. These folks are gathering the facts and the data, and I think the facts and the data will lead us to a logical conclusion.
“One thing I do think I know: I do not believe the current airport in its current configuration without any changes whatsoever is long-term viable. Something will have to change.
“Whether or not that means you have to tear it down and rebuild, or you build underneath it or build above it or build a monorail or you put in bathrooms or porta potties, I have no idea, but clearly the mere fact we have to have the conversation points out there are issues that need to be addressed.”
Are there any airport terminals around the country you like?
“I like the (New York) LaGuardia terminal. It is wide open. It’s spacious. It’s clean. It’s got seats. You can use iPads. It’s comfortable. It’s easy to see things. There’s room to maneuver. Food options are great. You don’t have to walk 58 million miles. It’s an inviting environment.”
Downtown Kansas City has lost 19.1 percent of its private employees over the past 10 years. What can you do to boost employment?
“Part of that loss, I’m sure, was because of the economic times and what it’s done to individual business with regards to downsizing and their financial viability.
“What we’re seeing now is smaller companies, more technological and a little younger, wanting a different feel and different look that I’m not sure is compatible with some of the (office) space we’ve got. I hope it is, because we’ve got a lot of space to fill, and I know the people who own the buildings and the landlords would love to do that.
“The problem is, being in such a competitive environment with Johnson County on the other side makes it a little difficult to do that. What we’re trying to do primarily is hold onto what we’ve got, target what we go after and build our entrepreneurs as quickly as we can so hopefully we’re growing businesses as opposed to moving businesses around.”
Do you see any endgame for the Border War?
“I’ve been asking for an endgame to this since I came into office, and it doesn’t seem that much has changed.
“I think the variances in the tax policies between the two states haven’t been worked out or haven’t gone long enough to know exactly what impact they’re going to have, but my suspicion is that Kansas may pull back on some of its (incentive) programs, particularly after the AMC (Entertainment) issue, and instead rely on what (the state believes) is a tax policy that will attract businesses.
“Until we all come to the common-sense recognition that there is no benefit in this region to spending the type of money that’s being spent to move businesses from one side of the line to the other, and that we’re better off collaborating as opposed to competing on those types of issues, then I’m not sure we’re going to change.
“We’re in a new world. We’re in a world economy. We are competing with the Minneapolis area, the Denver area, Mexico, China, Taiwan, India and all sorts of other places for talent and for economic benefits.”
There are reports that Cerner Corp. would like to develop an office campus at the former Bannister Mall property. Can you discuss that?
“I think things are going to move there, and I know a few things I’ve been asked not to talk about. It’s moving. There are some things that are going to hopefully resolve that, and we should have some information, but I can’t talk about that.”
How about Advance KC, your reform plan for the Economic Development Corp.? Will it help resolve the current dysfunction at the Tax Increment Financing Commission?
“Hopefully it will help resolve it, because we’ll have a single point of entry, and we’ll have the chairs and executive directors of the various alphabet agencies meeting to review deals. As they come in to make joint decisions so everybody knows what’s going on simultaneously, things can flow through a more transparent and obvious deal-flow process.
“Part of the dysfunction of the TIF Commission is the conflict between the commission and the taxing jurisdictions, and that’s been going on for I don’t know how long. I can tell you the heated rhetoric sure as heck doesn’t help solve the problem, and to the extent we can get beyond all of that and have some conversations, we might be a little better off.
“Advance KC is designed to refocus our economic development strategies in such a way that we are developing in areas that have been underdeveloped, and we’re recognizing the value of human capital in ways that we haven’t.
“Right now we are reacting. If you’re putting things together for a specific purpose and you’re focused in using your incentives to accomplish that goal, then I think you have more buy-in at the front end, which means less arguing at the back end. That’s the whole idea of Advance KC.
“It’s my desire we have all of this put to bed in some form in August.”
After more than two years in office, any thoughts about your development goals moving forward?
“I want to continue with what we’ve started on the east side of town with Aldi’s and Linwood/Prospect and the East Patrol (police campus).
“I want to finish Beacon Hill, and we are moving in that direction with the additional housing that’s started, with the housing for UMKC and Truman Hospital, with the grocery store on Troost. We’re making real progress. We’ve made a lot of infrastructure investments on the east side that continue.
“Frankly, and I know this sounds a little goofy, we need schools in neighborhoods that work in order to revitalize neighborhoods. People can talk about vacant properties all they want, but you have to have a market.
“The market that you really want are younger people who are starting their jobs, who want to have a house they can afford, and they want to start a family, but in order for them to do that they want to be in a place where they can send their children down the street to their school.”
So was busing to integrate schools a failure?
“I think the concept that the only way black kids could be properly educated was in the presence of white kids is a fallacious proposition. I do believe the physical plants needed upgrading, but I think that the focus should have been more on the educational outcomes of the children.
“We had an opportunity to transform education in this city, and I think we missed it.”