The first high-end office development built in Kansas City "in many years" could be open by the end of next year as part of a $114 million project that would also convert the upper floors of the historic Kansas City Club building and part of the old Muehlebach Hotel.
All together, the project would redevelop most of a city block between the Library District and the Power & Light District and near Municipal Auditorium. For development officials, the new office space is a sign Kansas City is moving in the right direction.
“This is hitting on every cylinder that we want as far as downtown revitalization," said Sean O'Byrne, vice president of business development for the Downtown Council of Kansas City.
Platform Ventures, a development company with an office in Fairway, is asking for a 75 percent property tax abatement for 10 years and 37.5 percent abatement for an additional 15 years to build a $29 million, 70,000-square-foot Class A office building, along with 360 structured parking spaces, and convert part of the Muehlebach building for $25.6 million, creating an apartment building with eight studios, 76 one-bedroom units and 33 two-bedroom units.
Platform Ventures will set aside 12 one-bedroom apartments as affordable units.
Under the proposal, the old Kansas City Club building at 13th Street and Baltimore Avenue would be redeveloped into a 114-room luxury hotel for $59.5 million. The club had moved to 9th Street and Baltimore Avenue before it filed for bankruptcy in 2015.
Platform acquired the Kansas City Club building in 2015 and renovated the lower floors to create an event space, called Brass on Baltimore, which will remain in business. The upper floors were converted to lofts in 2002 and will be again converted to hotel rooms.
Platform Ventures asked that a community improvement district be created to authorize a 1 percent sales tax on the hotel site for 20 years with the funds going back to Platform Ventures.
O'Byrne said the Downtown Council was happy to see the old Kansas City Club building converted.
“And it’s also bringing back a wonderful landmark in the Muehlebach tower, something that’s been vacant for more than 25 years," O'Byrne said.
Greg Flisram, executive director of the Land Clearance for Redevelopment Authority, said the development would bring "new life" to that part of downtown and especially the Muehlebach building.
"It's been effectively mothballed for a number of years now," Flisram said.
The redevelopment authority board would have to sign off on any tax abatement. Flisram said the city would have to approve the community improvement district as well as a sales tax exemption on construction materials that the developer also requested.
O'Byrne and Flisram said the office building would be the first built in the area in years.
It's unclear whether Platform Ventures has secured a tenant for the building or whether it's being built "on spec," assuming it will be leased later.
Platform Ventures declined to comment.
H&R Block built a new headquarters downtown, but Flisram said offices haven't been built on spec in years. Downtown building across the Midwest has been driven by corporations wanting to attract millennials.
"It's typically been driven by the big company coming in from the burbs wanting to plant a new flag downtown," Flisram said.
O'Byrne said spec offices hadn't been built in downtown since the early 1990s.
Jan Parks, spokeswoman for the Coalition for Kansas City Economic Development Reform, said it looked like Platform Ventures was "trying to be responsible" with the size of tax incentive it requested and was following a city ordinance sponsored by 3rd District at-large councilman Quinton Lucas that caps property tax breaks at 75 percent.
"Incentivizing luxury hotels, buildings is somewhat of a concern," Parks said.
The lower-rent one-bedroom apartments set aside by Platform Ventures would cost $1,196 a month, affordable for someone making 80 percent of the area's median income. The rest would rent for $1,578 monthly.
To Parks, even the $1,100 affordability target endorsed unanimously by the Kansas City Council is too high.
She said her group was fairly neutral on the office building.
Crosby Kemper III, who heads the Kansas City Public Library, criticized the idea of providing incentives for downtown development. He said the only reason to use incentives to spur downtown development would be to create new jobs, but this project would simply "move the deck chairs around."
Kemper argued the affordable housing wouldn't help average families because the apartments would have, at most, two bedrooms.
"We're subsidizing professionals," Kemper said.