A prolific Kansas City redeveloper got an endorsement Thursday from a tax-incentive granting agency to convert two buildings on Grand Boulevard, potentially adding more event, office and retail space to the Crossroads.
Developer Matt Abbott plans to spend $6.8 million converting a one-story building in the 1600 block of Grand Boulevard into a high-end event space with a rooftop deck. Next door, Abbott plans to put a “signature” local retailer in the first floor of a three-story building with offices on top. He said he’s in talks with a potential retail tenant.
Abbott developed the Hotel Indigo at Grand and 20th Street and has advocated for development in the East Crossroads. He hopes to start construction on the project within the next couple of months and open next year.
The Planned Industrial Expansion Authority, which votes on tax incentives for development, granted Abbott a 20-year property tax abatement — 75 percent for 10 years and 37.5 percent for the next 10.
Abbott won the approval despite a request by Shannon Jaax, director of planning and real estate services for Kansas City Public Schools, to cap the incentive at 10 years. Jaax suggested the board also could reevaluate the need for an abatement on the project after 10 years and decide whether it would be necessary going forward. She noted that Abbott had received 10-year abatement approvals on projects approved by the Land Clearance for Redevelopment Authority, a separate agency from the PIEA.
The PIEA board can authorize incentives for up to 25 years.
Brian Noland, the board’s secretary, expressed concern that a looming reevaluation could make it difficult for Abbott to secure a loan. He said if the project is successful, he wouldn’t want to punish Abbott by pulling back on the incentive.
Jaax acknowledged the board hasn’t reevalutated incentives halfway through and said she didn’t want to punish anyone’s success. She said she wanted to ensure future tax revenue for school children.
“Kindergartners now are going to be out of college,” Jaax said. “Twenty-five years is a significant period of time. We’re not saying no level of incentive.”
Abbott said developing in the Crossroads was an area of passion for him, not a big source of revenue.
“I got here in 2001, and I said, ‘I’m going to be a part of this redevelopment,’” Abbott said. “That’s why I came to Kansas City. I love it. I do a lot bigger projects outside of Kansas City that make a lot more money, but I love this stuff. This stuff’s the fun stuff.”
He argued a tax abatement is necessary amid rising interest rates and construction costs, a common concern for Kansas City developers. He said with rehabilitation projects, it’s not uncommon to find problems hidden in the buildings.
“I haven’t done a project like this where I haven’t gone over budget every single time because you find unknowns,” Abbott said.