The Kansas City Council on Thursday approved the outlines of an ambitious, unusual deal for financing a $302 million, 800-room downtown Hyatt convention hotel.
The unanimous vote came one day after a council committee unanimously endorsed the outlines of the city’s financial partnership with private investors.
“I never thought this day would come,” Councilman Ed Ford said, noting that most convention hotel deals require cities to guarantee their debt or put their general fund at risk. This deal does not, and puts much of the financial and cost overrun risk on the developers.
“This is a significant day for Kansas City,” Ford said. “I know this was not an easy deal to reach.”
The full council vote keeps the proposal on the fast-track. It is next scheduled to be reviewed by the city’s Tax Increment Finance Commission on June 30.
Mayor Sly James has said he wants the current council to approve the long-sought convention hotel before many of its members leave office Aug. 1. The development team also has said the project needs approval as quickly as possible to lock in favorable interest rates and construction pricing.
James said Thursday’s vote “is a big stepping stone” to keeping the project moving forward. He said he hopes the hotel can eventually help attract an NFL draft, future All Star games and major cultural tourism events.
The proposed hotel tower and parking garage — unveiled on May 11 — would occupy the block bordered by Wyandotte Street, Baltimore Avenue, 16th Street and Truman Road, just south of the downtown freeway loop.
The site is directly across Wyandotte from the Kansas City Convention Center’s Grand Ballroom, which is at the southern end of Bartle Hall, and northeast across 16th Street from the Kauffman Center for the Performing Arts.
The city owns three-fourths of the land for the site, which is currently being used for surface parking. Developers are negotiating with the American Hereford Association, which occupies the only office building on the property, to raze it to clear space for the hotel.
The investment team is led by area development attorney Mike Burke and Bob Swerdling, a Denver-based expert in financing and development convention hotels.
Developers hope to begin construction in early 2016 and open the hotel in 2018.
The project involves significant investments from both the city and the private investors.
The city said the complex financing doesn’t add to the city’s debt, and doesn’t take away resources that would otherwise go for police, fire and other city services.
But not everyone is supportive. Some businesses have expressed concerns about the possible loss of catering business. Under the development proposal, the Hyatt would receive exclusive rights for catering events for 15 years in the Bartle Hall Grand Ballroom.
Currently eight local catering companies have access to that ballroom business, and they would lose that opportunity once the hotel opens.
To reach Steve Rosen, call 816-234-4879. To reach Lynn Horsley, call 816-226-2058.