Last week’s news that Populous is pulling up stakes and leaving its custom-built home in the River Market for the Country Club Plaza smells a lot like the relationship that soured three years ago when the EPA left downtown Kansas City, Kan.
Populous, the sports architecture firm, said it wanted to stay but couldn’t reach a deal to extend its lease with its Texas landlord, Orix. Its new home, as of next year, will be the Board of Trade building near the Plaza. It has only been eight years since Populous moved into the building developed for it at 300 Wyandotte St.
The KCK parallel occurred three years ago.
That’s when the federal General Services Administration announced the U.S. Environmental Protection Agency was leaving its offices, custom-built in 1999, after a failed attempt to reach a new lease with that building’s owner, New York-based UrbanAmerica Advisors.
In both the Populous and EPA cases, they walked away from heavily subsidized projects built specifically for them because the original developer with a vested interest was no longer around. For whatever reasons, the new landlords were either unable to or uninterested in striking a deal to keep those tenants, and now they’re gone.
The public is not necessarily left holding the bag — the private owners remain responsible for meeting financial obligations — but it shows how fragile these oft-hailed public-private partnerships can be.
The news for Populous is positive, as the firm is growing and expects its workforce to expand from 240 to 280 employees by the time it moves into the Board of Trade in fall 2015. Nonetheless, its move is a kick to the shin of the civic goals that led to it coming to the River Market in 2006.
Opus Northwest, the developer of the building, got a 25-year, 100 percent property tax abatement for the $22 million Populous project, and the city built and owns the 400-space garage.
The public payoff was replacing a couple of notorious entertainment venues, the Old Chelsea adult theater and Cotton Eyed Joes bar, with a smart new firm that would bring a couple hundred jobs to the River Market to patronize its restaurants, bars and other businesses.
Sean O’Byrne, a top official at the Downtown Council, helped put the Populous deal together while he was still working in commercial real estate.
“It was kind of my swan song when I was leaving Colliers,” he said. “We retained a wonderful architectural firm and built a new building and removed blight. It was everything I was about.”
On a bigger scale, the EPA building at 901 N. Fifth St. was to be a catalyst to revive downtown Kansas City, Kan. The city acquired an old motel and donated the land for the project along with generous tax incentives. When it closed, downtown lost 600 workers and gained a 200,000-square-foot building that’s still empty two years after the EPA left.
O’Byrne and others believe the four-story Populous building has solid prospects for attracting new tenants. It was designed to be divided for multi-tenant use as opposed to the EPA building, which has a huge atrium and was designed with a single tenant in mind.
“Understandably, we wish they were staying,” said George Birt, who worked with O’Byrne on the original building and is now building the River Market West apartments next door to the Populous building. “It was built for them and was a benefit to the neighborhood.
“The fact it’s a Class A building should be attractive to other tenants.”
One more thing: Populous leaving for the Plaza is a continuation of the steady exodus of private jobs from greater downtown. Between 2001 and 2011, the area from Crown Center to the River Market lost more than 16,000 jobs, a 19.6 percent drop despite all the billions of dollars in improvements.
Here’s hoping the private sector joins the party soon.
Speaking of festivities, Mayor Sly James again showed his classy side last week at the groundbreaking ceremony for One Light, the $79.2 million apartment tower being built by the Cordish Co. at 13th and Walnut streets.
Generally, politicians are loathe to share the limelight, but hizzoner graciously praised former Mayor Kay Barnes for her work 10 years ago launching the Power & Light District and other major South Loop redevelopment initiatives.
“None of this would be here if it weren’t for Kay Barnes,” the mayor said. “She’s an example of a strong woman who’s done great things for this city. What we have to do now is work on the next 10 to 12 years and keep it going.”