Development

Kansas City Council approves tax incentives for BNIM’s new headquarters

A rendering shows BNIM’s proposed new headquarters.
A rendering shows BNIM’s proposed new headquarters.

The BNIM architecture firm hopes to move forward soon with a new headquarters in the Crossroads area following City Council approval Thursday for tax incentives to make the project a reality.

The council’s decision followed intense community debate that highlighted questions over when the tax break spigot should stop flowing downtown.

Foes of the tax breaks said they might try to overturn the council’s decision with a referendum petition, but that was not yet certain.

BNIM, a prominent Kansas City architecture firm, plans to occupy the top two floors of a warehouse at 1640 Baltimore Ave. that is owned by developer and philanthropist Shirley Helzberg. She has been an active West Crossroads redeveloper, starting with the Webster House renovation in 2002.

Helzberg’s development team, Walnut Creek Ranch LLC, plans to renovate the building at a projected cost of $13.2 million, and BNIM hopes to occupy it in late 2016. The project is intended to improve a neglected structure with cutting-edge, environmentally efficient “green building” architecture features.

“This is an incredible project,” Councilwoman Katheryn Shields said, adding that it is being talked about at national architecture conferences.

Jerry Riffel, attorney for Helzberg’s development partnership, told the Tax Increment Financing Commission and City Council that the project wouldn’t be financially viable without $5.2 million in tax increment financing. Those tax incentives divert 23 years of future tax revenues back to the project that would otherwise go to Kansas City Public Schools, the library and other taxing jurisdictions.

Most taxing agencies, including the library, accepted the project, but some Kansas City school advocates said the TIF plan wasn’t a good deal for schoolchildren. They sought $40,000 a year in payments in lieu of taxes to make up for the tax diversion.

Some opponents also suggested the West Crossroads has made sufficient progress so projects now should be viable without public incentives.

The concerns were sufficient to prompt talk of a petition to reverse Thursday’s vote.

“There’s a group of community partners that are talking about a possible referendum on this,” said Jennifer Wolfsie, a parent leader in the Kansas City school district.

Wolfsie said a growing chorus of constituents believe tax increment financing should be used to promote projects in more blighted and underdeveloped areas.

After a contentious three-hour meeting in mid-October, the council’s Planning, Zoning and Economic Development Committee approved a plan for $10,000 a year in payments in lieu of taxes in years one through 10 of the project and $15,000 a year beginning in year 11. Helzberg also pledged an additional, one-time gift to the school district of $50,000.

Meanwhile, BNIM agreed to pay a $26-a-square-foot lease rate to help the project’s bottom line, a rate estimated to be about $3 a square foot higher than market rate.

City Council members said BNIM has been a great Kansas City corporate citizen and this project’s benefits for the city, including the school district, outweigh the potential costs.

BNIM, founded 45 years ago with a stated mission to “make Kansas City a better place,” has received many accolades. Earlier this year, it won the Greater Kansas City Chamber of Commerce’s 2015 Small Business of the Year honor, given to a company that shows business growth, sustainability, strong employee relations and civic commitment.

For 14 years ending in 2014, BNIM kept alive the lower floors of the Kansas City Power & Light skyscraper. It vacated the historic art deco structure last fall, paving the way for the tower’s redevelopment as apartments.

The firm, temporarily housed in the former TWA headquarters at 18th and Main streets, has had a role in some of the city’s most notable projects — the Nelson-Atkins Museum of Art, the Bolender Center for Dance & Creativity, the Folly Theater and the Kauffman Center for the Performing Arts.

Its founders and partners are leaders in preservation, environmental, transportation and other projects, including Manheim neighborhood housing on Kansas City’s East Side.

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