The developer of the historic Kansas City Power & Light Co. Building is making his pitch for tax incentives this week and, if approvals are granted, plans to begin work on the $62 million apartment project later this summer.
NorthPoint Development is seeking about $6 million in tax-increment financing assistance and a 25-year property tax abatement to help renovate the iconic skyscraper at 14th Street and Baltimore Avenue, and build a 465-space garage on the adjoining lot immediately north.
The redevelopment plan, described as the best bet to date to revive the mostly-vacant landmark, calls for renovating the 36-story tower into 220 luxury apartments and wrapping the garage with an additional 50 apartments. About 6,500 square feet of retail is planned for the ground level of the garage.
New details of the redevelopment plan call for locating a lounge and clubroom for residents on the 32nd floor of the historic tower. Because of the art deco building’s stepped-back design, that floor opens to an outdoor terrace. A saltwater pool, spa, fitness center and conference room for residents are planned on the rooftop of the new garage.
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Mark Pomerenke, the NorthPoint executive in charge, said the developer has had extensive discussions with the agencies that will begin reviewing the plan this week, the Kansas City Tax Increment Financing Commission and the Planned Industrial Expansion Authority.
“Everyone has worked hard and creatively to solve the unique redevelopment challenges that this project has faced that has stalled the many previous redevelopment proposals,” Pomerenke said in a statement. “We believe the package we are putting forth is a win-win for everyone involved.”
If the agencies endorse the incentive request, the developer would like to have the plan considered by the Kansas City Council in July.
“If we receive approval of our proposal then we are prepared to start on the project immediately after,” Pomerenke said. “We hope to start demo in late summer and complete the redevelopment by December 2015.”
There have been multiple attempts to redevelop the landmark, which has been owned since 1964 by the Shulman family of New York, but all have fallen through. The building lost its major namesake tenant, Kansas City Power & Light, in 1991 and now is down to one tenant, BNIM Architects, which occupies the first three floors.
The Star first reported the NorthPoint proposal in early April. The deep-pocketed firm, run by Nathaniel Hagedorn, has had extensive experience building apartments and industrial properties around the metro area. The Power & Light would be its first venture into historic redevelopment and downtown Kansas City.
The $6 million in tax increment financing assistance would come from revenues currently generated by the TIF plan established to redevelop the historic Hilton President Hotel. The hotel, immediately across Baltimore from the Power & Light building, opened in 2005.
The hotel has performed well financially and its bond is expected to be repaid by TIF revenues five years ahead of schedule in 2023. If approved, the those surplus revenues would be used to help defray the cost of the garage proposed for the Power & Light Building project.
The Planned Industrial Expansion Authority board is being asked to support a 25-year property tax abatement on the improved value of the redeveloped property. The developer is proposing to reimburse the school district, library and other jurisdictions about 70 percent of the abatement, making the effective abatement about 30 percent.
Pomerenke said NorthPoint has lined up a partnership that will invest $15 million in cash equity to the redevelopment, and has a commitment letter for a loan from Great Southern Bank of Springfield in partnership with Citizens Bank and Trust of Kansas City. It’s also seeking $14 million in federal and state historic tax credits.
“Our financing is lined up, and if the city approves the project in July, the Power & Light Building will finally be redeveloped and restored to its former glory,” Pomerenke said.
“We will be excited to flip the switch to light up the building again, this time with energy efficient LED lighting.”
The 479-foot skyscraper that opened in 1931 was Missouri’s tallest for four decades. A 1934 account said its crowning beacon could be seen by aircraft 75 miles away. Its six-story lantern tower was designed to mimic a sunburst radiating energy, but it has been dark the past few years.
Spencer Thomson, the attorney representing the building’s New York ownership entity, Gailoyd Enterprises, is pleased that NorthPoint is poised to introduce its redevelopment plan.
“They have been extremely diligent and done everything they have said they’ll do,” Thomson said. “After as many false starts as we’ve had, we’re pretty excited about our final closing.
“We hope this is the one, and it appears to be from everything I can tell.”
There is one other lingering issue regarding the property.
In 2002, a previous developer had proposed renovating the old building and erecting a condo tower and 700-space garage on the north lot. At the time, the Cordish Co. was planning its entertainment district and the city agreed to give the Baltimore firm control of 10,000 square feet of retail on the street level of the garage and after-hours access to 500 parking spaces.
Since then, Cordish has insisted its earlier agreement be honored, a demand that has complicated other development plans for the Power & Light Building.
Negotiations have been underway between the city and Cordish to try to resolve the issue.
Cordish officials could not be reached for comment. Joni Wickham, press representative for Mayor Sly James, released a statement: “The city is still working with both parties, and we hope we can find a solution that makes everyone happy.”
Thomson said his client believes it’s up to the city and Cordish to resolve the issue, and Gailoyd would pursue legal action if the issue derailed its transaction with NorthPoint.
“We’ve made it clear to Cordish that if they stand in the way to prevent this from closing, we’d deem it actionable,” Thomson said.
NorthPoint has selected NSPJ of Prairie Village as the architect for the project. The decision to build a garage with apartments fronting Baltimore and 13th Street was described as a way to create a “high-quality urban landscape” at a corner now occupied by a vacant lot.
The redevelopment plan calls for 80 percent of the apartments to be one-bedrooms averaging about 750 square feet. The largest two-bedroom apartments would be 1,600 square feet.
Rents would be about $1.65 per square foot, comparable to the price of units in the new 25-story Cordish Co. apartment project being built at 13th and Walnut streets.
About 20 apartments in the historic tower will have outdoor terraces, a feature allowed by the building’s step-back design. All 50 of the new apartments that will wrap around the garage will have balconies. Their building will be five stories tall along Baltimore and 13th Street.
Further cementing the connection between the Power & Light Building and its historic neighbor across Baltimore, residents will be able to order room and maid service from the President Hotel.
“We believe the amenities, views and iconic nature of the building alongside the project’s proximity to the Kansas City Power & Light entertainment district and Sprint Center will make a compelling package for prospective residents,” Pomerenke said.
To reach Kevin Collison, call 816-234-4289 or send email to email@example.com. Follow him on Twitter @kckansascity.