Developer seeks historic tax credits, incentives to convert AT&T building to apartments
Washington, D.C., developers plan to transform a former AT&T building in downtown Kansas City into hundreds of new apartments.
The Bernstein Companies is requesting millions of dollars in property tax breaks and historic tax credits to redevelop the 1973-era office building at 500 E. 8th Street.
The telecommunications company in 2019 relocated its workers from the building to another facility in South Kansas City. It has sat vacant since.
Developers say it’s a particularly challenging project given the current configuration, which includes some floors without windows, and environmental hazards like asbestos.
“This unfortunately isn’t a cookie cutter, easy building to do and I think the fact that many developers have passed on this and it’s been vacant for so long just speaks to that,” said Phil Aftuck, director of real estate investments for the Bernstein Companies.
The company is also working on repurposing the historic Mark Twain building at 106 W. 11th Street downtown.
The AT&T building is in the heart of downtown’s East Village, widely speculated as a prime spot for a potential downtown baseball stadium.
It sits across the street from the Old St. Patrick’s Oratory and is near three condominium buildings: The View, The Manhattan and The Metropolitan.
Plans call for having up to 265 apartments in the building. The number may be reduced if the State Historic Preservation Office doesn’t allow for the addition of windows on the second floor.
The company plans to build studios, 1-bedroom and 2-bedroom units. Rents will average $1,476 per month, according to the company’s incentive application. Developers said they won’t charge luxury rental rates and some units will rent for under $1,000 per month.
“These rents are not going to be the most expensive in Kansas City,” Aftuck said. “They’re not going to be anywhere close to what you’re seeing near Power and Light (District).”
It’s unclear how the project would comply with the city’s new affordable housing rules, which require developers seeking incentives to set aside a certain share of units for renters earning below the area’s median income.
Parts of the first and third floors of the building will be converted to coworking office space. Tenants will also have access to remote work space, a fitness center and a lounge.
The building already includes a 575-space, underground parking garage.
The Bernstein Companies expects to spend more than $91 million converting the 13-story tower, according to documents filed with the Economic Development Corporation of Kansas City. That includes nearly $24 million in expected historic tax credits, $43 million in construction financing and $24 million in developer equity and cash.
Documents show the company expects to spend $13 million to purchase the building from Maxus Properties, a North Kansas City developer that had originally planned to redevelop the AT&T building.
Bernstein is also seeking 15 years of property tax breaks from Kansas City’s Land Clearance for Redevelopment Authority. Developers gave a presentation at Tuesday’s meeting of the LCRA board, which is expected to vote on incentives for the project next month.
Board member Melissa Patterson Hazley said she worried about the size of the units relative to their cost.
“We’re doing quite a bit of smaller units like this that are really not conducive to families or people with children,” she said. There are “only so many young middle class people to go around, so I wonder when we’re going to hit our peak on that.”
This story was originally published December 29, 2021 at 5:00 AM.
