When it comes to Missouri’s historic tax credit program and the scores of important buildings it has saved, particularly in downtown Kansas City, readers of this column know it has been an ongoing topic.
The overwhelming majority of the thousands of new residents who’ve come downtown the past decade, a huge part of its nascent revival, are living in buildings revived with the essential help of the program. Without them, those old buildings would have been blighted liabilities. Remember those awful haunted houses?
That’s why a recent quote in our paper prompted me to take up the subject again.
“We are spending too much on tax credits,” state Sen. Will Kraus, a Lee’s Summit Republican, told The Star, referring to historic and affordable-housing tax credits. “And we’re not getting the return on investment that we should be demanding.”
Mr. Kraus, let me introduce you to the Argyle, a 10-story building at the prominent corner of 12th and McGee streets in the heart of downtown.
For more than 15 years the return on investment in this grand edifice a stone’s throw from City Hall has been zero, nada, nothing. Actually, it has been negative.
With its entrances barricaded with beat-up plywood, the looming Renaissance Revival structure is an awful advertisement for neglect to anyone walking between our government hub and the office towers and entertainment district a couple of blocks west on 12th Street.
Louis Curtiss, one of Kansas City’s best known architects, designed the original four floors in 1906. In 1924, six more stories were added, making it one of the tallest buildings in Kansas City when the city was roaring. Katz Drug Co. got its big start there in 1914, and the well-known Kansas City firm occupied the corner of the building until 1970.
Those are empty memories now. It’s a ghost building, a relic from the past. A place the Fire Department and police have to make sure doesn’t get trashed or burned down by vagrants.
And for $3 million — not even direct cash because this is a future tax deduction — here’s what the state will get for its investment:
That historic tax credit incentive will leverage a $20 million deal to develop a relic of Kansas City’s past, convert it to 124 nice apartments, and make it a place where a couple hundred people will live as part of Kansas City’s future. People who will go to bars and restaurants, shop for food and bring that stretch of 12th Street alive.
Developer Jim Wiss of Arghom LLC said it actually would have been cheaper to tear down the Argyle and build again, but then we would lose another special place that distinguishes Kansas City from a dozen generic Sun Belt cities thrown up over the past 40 years.
“Those tax credits are very critical,” he said, “unless someone says we don’t need old buildings and we should tear them down and lose our history of great architecture.”
Last week the Argyle got the go-ahead from a local development agency to move forward. So did another big historic redevelopment project, the renovation of the old Folgers coffee plant at Seventh Street and Broadway. The two Folgers buildings date back to 1912, just six years after the Argyle opened.
In this case it has only been a year or so since the last coffee was roasted there, not long enough for blight to start brewing. So here’s the return on the state’s $5 million historic tax credit investment:
By late summer 2016, the two old Folgers buildings will become the $35 million Roaster’s Block development, 146 market-rate apartments that will attract the type of folks who can afford to pay $1,400 monthly rent for 1,000-square-foot units. Again, the kind of demographic that adds economic energy to downtown — and pays state taxes, too.
The Roaster’s Block project is being done by O’Reilly Development of Springfield, a firm that has done major renovation projects in downtown Joplin, Mo.
“That economic tool has been very successful in saving, preserving and renovating historic buildings in all sorts of downtowns,” said Denise Mathisen, O’Reilly director of operations and development. “It’s critical to our funding.”
Each historic tax credit dollar will raise more than 90 cents in cash for the redevelopment plan. The buyers of those tax credits can apply them as deductions on their state taxes. Besides the hundreds of new residents, the Roaster’s Block project will employ a couple hundred construction workers for a year and provide more than a half-dozen permanent jobs.
And here’s another return on the state’s investment:
“The ripple effect of having boarded-up buildings in a business area leads to more and more blight as years go on,” Mathisen observed. “Businesses don’t want to invest in areas where buildings are vacant.”
And one last number: The Alliance for Investment, Jobs and Preservation estimates that Missouri has issued $1.35 billion in historic tax credits overall since the program began in 1998. The return on that investment? An estimated $7.25 billion in projects and more than 24,700 housing units created.
You don’t have to be sentimental about preserving our unique historic buildings to see the value of that return.