The Land Clearance for Redevelopment Authority has hired Stifel Nicolaus & Co. to underwrite bonds the agency will issue to help cover construction costs on the planned Hyatt convention center hotel in downtown Kansas City.
Plans call for the authority to issue by the end of this year up to $160 million in bonds for the estimated $311 million project. The bonds are to be repaid with tax increment financing revenues over 30 years and special tax revenues generated by the hotel over 23 years.
The bonds are considered complicated, largely because they won’t be guaranteed by the city or other public entity and they won’t be rated by a credit rating agency.
“This was not an easy deal,” said Michael Burke, who leads the hotel development team, “and it’s still subject to some negotiation, but I’m very pleased with the decision.”
The Land Clearance for Redevelopment Authority is involved in the deal as the owner of the planned hotel under a sale-leaseback agreement with the private owners assembled by Burke’s group.
Stifel Nicolas could receive about $2.4 million if $160 million in bonds are issued, according to the proposal accepted by the agency’s board Tuesday. The company was selected over Ameritas Investment Corp., which was the other underwriter recommended by a city committee after seven underwriting proposals were submitted.