Developers of 5-star hotel say they have Kansas City Council votes for tax incentives
Developers of an ultra-luxury hotel proposed across from the Kauffman Center for the Performing Arts believe they have the necessary votes to push their requested tax subsidies through the City Council, they said Friday.
Whitney Kerr Sr. and Eric Holtze hope to register the $63 million project as a five-star hotel. They first proposed it in 2018, but after numerous delays, the Tax-Increment Financing Commission in October recommended that the city not offer subsidies to the project.
Because the commission turned them down, developers need nine of the 13 City Council members to agree to the incentives.
“We feel really good about our situation,” Holtze said in a news conference Friday.
Overlooking the site of the proposed hotel at 16th and Wyandotte streets, Holtze and Kerr once again laid out their arguments for the hotel. They said it would bring a new type of traveler to Kansas City and create a high-end tourism market that the city doesn’t have, and that is what makes the subsidy necessary.
They argue right now is the perfect time to get started despite the coronavirus pandemic because the hotel won’t open until at least late 2022.
“There’s already many more people traveling on airlines. Even the cruise ships are starting to happen, and hotels are filling up,” Holtze said. “We see there’s no reason why the convention business won’t be coming back, and the timing could be just perfect.
“We think this particular property once its built will be the lead hotel of Kansas City.”
They hope the city will grant the project $45 million in TIF and Super TIF revenues to offset the cost of development — $121 million over the life of the project. They also want a sales tax exemption on construction materials and revenues from a community improvement district
TIF subsidies work by directing all or parts of future property tax revenues back to developers to help cover the project costs.
Developers said they were not certain what day they would appear before the Neighborhood Planning and Development Committee.
TIF Commission Executive Director Heather Brown told taxing jurisdictions in an email that the issue was expected to come up in July.
Councilwoman Teresa Loar, 2nd District at-large, the only council member attending Friday’s news conference, said she thought her colleagues had an open mind about the project. She called the incentive package “as straightforward as they come.”
“I think the city needs a five-star hotel. It can go here, or it could go in Johnson County or Lee’s Summit or someplace,” Loar said, “but I’d rather have it here.”
Developers repeatedly emphasized that, unlike some projects, the hotel would not have any debt guaranteed on the bonds issued to pay for construction. If the project doesn’t make money, they said, the risk is on the private investors and would not come from city revenues.
“We don’t see that we are asking the public for anything,” Holtze said.
Last year, before he was elected mayor, Quinton Lucas was skeptical of the project.
“I need to hear a lot more positive about the project before I would be in support,” Lucas told The Star in May 2019. “Right now, I probably start with a — do we need another hotel? Do we want to make this the sort of thing we’re incentivizing?”
His communications director, Morgan Said, said Thursday that sentiment still stands.
Even some members of the hotel industry have cast doubt on the need for a new downtown hotel, especially given the pandemic. The Loews Kansas City convention hotel opened nearby earlier this month with little fanfare.
“I love to see hotels open, but we don’t need another hotel downtown right now,” said Kurt Mayo, executive director of the Hotel & Lodging Association of Greater Kansas City. “The occupancy right now is awful, and it’s going to take a long time for it to come back. I don’t see that it makes sense, especially another TIF project right now.”
But the developers argue what they’re bringing to the city is not “more Residence Inns.”
“We want to provide an option for people … to have an experience that maybe they actually can’t have elsewhere,” Holtze said.
