One of the River Market’s most prominent and underutilized office buildings is set to clear one of its most confounding obstacles.
A complicated parking arrangement tied to the four-story building at 300 Wyandotte St. that led to litigation in federal court is expected to settle soon, boosting the new owner’s ability to lease the largely vacant space.
Ian Ross, of Somera Road in New York City, bought the building out of foreclosure proceedings last year.
Ross has rebranded the building, now calling it 3Y, and is after tenants who could occupy space left vacant by the Populous architecture firm. Populous left the River Market for space near the Country Club Plaza in 2015.
Ross has ambitious plans for 3Y, working with Clockwork Architecture to give the building a facelift. Ross hired real estate brokerage Cushman & Wakefield to help search for tenants.
It’s Ross’ first property holding in Kansas City, but he said he’s keen on looking for more.
“We loved Kansas City,” Ross said. “We spent a lot of time analyzing this market.”
Complicating efforts to lease 3Y since Populous’ departure was an arrangement by the Planned Industrial Expansion Authority and owners of the nearby River Market West apartments to lease parking space to residential tenants.
The expansion authority is a tax break-granting agency that issued debt on Kansas City’s behalf to build the parking garage when 300 Wyandotte opened in 2005. The agency was the nominal owner of the garage, for which the city pays debt service and operating costs.
Opus Development built the office portion of the property in 2005, while the city owned the parking garage. Legally, the building and the garage are two separate properties, an arrangement that Kansas City Manager Troy Schulte said he wouldn’t want to replicate.
Previous owners of 300 Wyandotte complained that the arrangement curtailed the number of parking spaces it could offer prospective office tenants, thus making it an unattractive option for businesses considering relocating to the River Market building.
The previous owner was a tenant-in-common structure, a method where several different entities have ownership stakes in the same property. TICs, as they’re referred to in the real estate industry, are sometimes cumbersome ownership arrangements that can’t react with enough speed to leasing opportunities or tenant issues.
The TIC that owned 300 Wyandotte took the Planned Industrial Expansion Authority to court, claiming the agency’s decision to lease 155 of the parking garage’s 396 spaces to the River Market West apartments undercut the value of the building. It claimed a plan to sell the building to Mission Peak Capital, a Kansas City real estate firm, fell through in 2015 when the buyers became wary of the parking problem.
Ross said he has worked with Schulte and the owners of River Market West to find a solution to the parking problem. While the settlement is not yet filed in court, a Jan. 20 notation on the federal docket said parties have agreed to a settlement and are expected to file the document within the next 90 days.
But the thrust of the agreement is this: Kansas City will let future users of 3Y use a surface parking lot at Fifth and Main streets, until development plans for the lot surface.
“Ian was willing to work with us to come up with space that wasn’t next door,” Schulte said.
Ross has also agreed with River Market West to allow residential tenants to share 25 parking spaces with potential office users at the 300 Wyandotte parking garage. Employees would use the spaces during business hours, while residents would gain access during evenings and weekends.
“I think it’s emblematic of the future of parking,” Ross said. “Rather than have these empty spaces in the nights and the day, let’s make it more efficient.”
The arrangement, Ross said, gives him access to enough parking to attract potential tenants.
Ross touts the building’s features: wide open floor plates unobstructed by support columns, an indoor auditorium and a location in the heart of the River Market. He plans to spend money sprucing up its facade, adding outdoor balconies, reconstructing what’s now a dark and uninviting lobby and constructing a rooftop patio.
All told, there’s about 90,000 square feet of available space, expandable to more than 100,000 square feet with a potential addition of space on the roof.