Apartments are brewing at the old Folgers plant in downtown KC

A faint aroma of caramel and coffee lingers on one floor of the former Folgers plant in downtown Kansas City.

By the time tenants start moving into the scrubbed-clean and renovated Roaster’s Block apartments this summer, the only hint of their former life is expected to be an occasional salvaged door or piece of manufacturing equipment decorating the common areas.

The $35.9 million project, creating 146 rental units in two buildings at Seventh Street and Broadway, showcases the explosive demand for market-rate housing in downtown Kansas City coupled with historic preservation tax credits that make ambitious renovations feasible.

Look no further than the houseplants on windowsills in nearby residential conversions, such as the Coffee Lofts and Lucas Place Lofts. People are living in a host of commercial-to-residential conversions in the Garment District, Quality Hill, River Market and Crossroads areas ringing the central business district.

Downtown apartment occupancy is running at 98 percent, with vacancies simply reflecting normal turnover, said Sean O’Byrne, vice president of the Downtown Council.

O’Byrne noted that historic tax credit applications and other approvals were in process for three remaining large downtown conversions, the Brookfield, Pickwick and Argyle, all old office buildings planned to become residential. But the Roaster’s Block conversion stands out because of the extensive Folgers plant equipment that had to be removed.

O’Reilly Development Co., based in Springfield, Mo., had the “depth and breadth” to take on that challenge, O’Byrne said. Demolition, recycling and renovation costs easily pushed the conversion price tag up to 50 percent higher than it would have cost to build apartments from scratch.

Denise Heintz, an O’Reilly partner, said: “Adaptive re-use of any building is challenging. Add in the historic preservation requirements, and it magnifies the cost and timeline.”

Even with greater marketplace demand for downtown housing, projects such as the two-building Roaster’s Block needed city, state and federal incentives to be financially feasible.

The smaller Boss building on the north side of the property was built in 1914. The concrete and brick structure housed a garment manufacturing company before Folgers began production in 1938. The Boss building is being converted to 56 lofts and will be the first to be ready for occupancy this summer.

The larger Swofford building on the south side was built in 1899. The heavy timber and brick structure was occupied by Swofford Brothers Wholesale from 1905 to 1939, when Folgers took it over. Developers hope to have its 90 units ready to rent by November.

After a previous would-be redeveloper was unable to get city backing for a different affordable housing plan, O’Reilly obtained property tax breaks — 95 percent for 10 years and 45 percent for five years — through Kansas City’s Planned Industrial Expansion Authority.

The developer also expects to earn $6.4 million in state income tax credits and $5.1 million in federal tax credits through qualified rehabilitation expenditures on the properties. The exact historic tax credits will be certified after the project is completed and spending is audited.

Redevelopment challenges

Another possible buyer of the Folgers property back in 2011 was Roasterie founder Danny O’Neill, who looked into the possibility of buying part of the former Folger’s plant to continue coffee production. At the time, the asking price on both buildings was $4.8 million, a cost he found reasonable, but the space simply was too big for his needs.

In one form or another, coffee production and packaging had been on site more than seven decades, first in one and then in both buildings. For many years, the plant had turned out coffee in the familiar red Folgers cans. For a while in its later years, the plant had changed to packet production.

But the Folgers plant shut down in 2012, just as the thirst for downtown housing grew, and the O’Reilly group acquired the two-building property in 2013 for an undisclosed sum.

“That’s when the fun started,” said project superintendent Joey Parrish, who’s on site with Build LLC, the general contractor.

By “fun,” Parrish means assembling a team of about 30 subcontractors to do demolition, cleanup, design and construction. Now, 100 to 150 workers are on site daily.

The first order of business was removing 15,000 tons of steel — factory parts and structural steel — left behind when Folgers shuttered the plant.

The development team contracted with Urban Metals to remove the manufacturing equipment. That company sold some parts, such as conveyor belts and other machinery, directly to other manufacturers. It sold steel to Advantage Metals Recycling and sold aluminum and copper to Asner Iron and Metal.

Throughout, the emphasis was on salvage and recycling rather than sending refuse to landfills, Parrish said.

After the plant equipment was removed, “the biggest challenge was the amount of modifications made within the structure to accommodate coffee processing,” said Tim Wilson, architect with Stark Wilson Duncan Architects. “We’ve done a lot of adaptive re-use (at the firm), and this project was atypical because of the amount of holes cut in the floors and roof for the plant equipment.”

Parrish said the building “was all industrial from roof to sub-basement.” As he spoke, workers were chiseling out remains of a vault in the building’s basement and preparing to fill a gaping pit in what will be a sub-basement parking garage floor.

Demolition also included razing an eight-story coffee bean silo — akin to a grain elevator — that stood in the space between the two buildings. A time-lapse video taken by a security camera and posted on YouTube documents the tower’s downfall to make way for what will be a patio and pool for tenants.

Preparation of the buildings also meant shoveling out mounds of coffee grounds that spilled onto the floors when factory parts were dismantled. And it meant leveling nearly every floor with overlays in the two six-story buildings.

Work on the property is being monitored by the Missouri Department of Natural Resources for remediation of lead paint and asbestos in the buildings and soil contamination on a parking lot north of the complex that’s to be used by Roaster’s Block tenants.

Conversion of the project’s two structures — the nearly 80,000-square-foot Boss building and the nearly 138,000-square-foot Swofford building — also is under the watchful eye of preservationists and the National Park Service.

The re-do demands new heating, air-conditioning, electrical and plumbing, replaced windows, weatherproofed roofs and walls, elevator additions, and construction of new ramps, garage entries and other exterior doors.

When finished, Roaster’s Block will include a mix of studio, one-, two- and three-bedroom apartments with rents estimated between $750 and $2,700 a month, depending on unit size and location.

O’Byrne, with the Downtown Council, said three-bedroom units are unusual in the heart of downtown. He sees a growing demand for them, particularly “from empty nesters who have trouble downsizing from 3,000- and 4,000-square-foot houses into two bedrooms.”

Plus, O’Byrne said, “when you peel back all the manufacturing additions, these were pretty buildings, so even though it was a tough project to put together, it’s a great addition to downtown.”

This story was originally published April 7, 2015 at 7:01 PM with the headline "Apartments are brewing at the old Folgers plant in downtown KC."