With federal boost, developer plans $100M towers near Kansas City arts landmark
Kansas City’s spate of downtown hotel and apartment construction could continue with a $100 million development planned in the Crossroads Arts District.
Dave Mashburn, owner of Mashburn Development LLC, said he’s planning three towers, including one hotel and two apartment buildings, across Broadway Boulevard to the west of the Kauffman Center for the Performing Arts. The development, called Allé, would replace an urgent care clinic on the site.
It’s the second major hotel project proposed near Kauffman in the last 18 months. Hotel Bravo!, proposed by Whitney Kerr Sr. and Eric Holtze, was rejected last month by the Tax-Increment Financing Commission. That recommendation is awaiting consideration by the City Council.
But Mashburn said he’s unlikely to ask for significant local subsidies. He said he might request a sales tax exemption on construction materials, but his project is being buoyed by investor interest because it’s in a federally designated Opportunity Zone.
“So at this point, that’s the biggest component and frankly what’s attracting investors,” Mashburn said. “I don’t anticipate pursuing a lot of other incentives beyond that.”
The federal program allows investors to defer capital gains taxes by investing that money in projects in low-income areas. Opportunity Zones in Kansas City cover primarily areas on the East Side, although some parts of Midtown are included. Mashburn’s project will sit on the edge of an Opportunity Zone covering the West Side and the extreme western edge of the Crossroads Arts District.
Investor equity, Mashburn said, would likely make up between 25% and 40% of the project budget, with debt covering other expenses.
“The Opportunity Zone being the big attraction — there’s a lot of interest in that around the country, really, and this is pretty unique in that it’s so close to downtown,” Mashburn said. “It’s not the typical case.”
The two apartment towers would collectively have 213 units. The mix of floor plans, Mashburn said, is still being determined. The hotel is expected to have 220 rooms. Mashburn is also planning a four-level, 500-car garage.
A hotel brand has yet to be selected, Mashburn said, but he’s in talks with a few. Unlike Kerr and Holtze’s proposal, the hotel will be mid-range, not luxury.
But some business leaders worry about filling the ever-increasing supply of hotel rooms as the new 800-room Loews convention hotel downtown prepares for a 2020 opening. Visit KC lobbied against Hotel Bravo!, saying there is an oversupply of hotel rooms.
Mashburn said it would likely be a year before crews break ground. After that, construction is expected to take 18 months to two years, putting a possible opening in late 2022.
The site, he said had “a lot of good things going for it.”
“I mean, it’s right across the street from the Kauffman Center, so that’s an incredible opportunity just in itself and then the synergy between the Crossroads and downtown and Power & Light and the convention center,” Mashburn said. “I mean, it’s really an incredible location.”
This story was originally published December 9, 2019 at 6:44 PM.
