Development

Judge rules downtown KC convention hotel proposal should not go to voters

The proposed convention hotel is near the Kauffman Center for the Performing Arts.
The proposed convention hotel is near the Kauffman Center for the Performing Arts.

In a significant victory for Kansas City downtown convention hotel boosters, a judge ruled Thursday that petitioners challenging the hotel financing are not entitled to a public vote.

Jackson County Circuit Judge Jennifer Phillips agreed with the city attorney’s office and hotel developers that the petitioners’ measure was unconstitutional for three distinct reasons and should not go on an election ballot.

She ruled that the petitioners’ proposed ballot language was vague, conflicted with state law and would have caused the city to be in breach of contract with the hotel developers.

The ruling could pave the way for construction to begin on a $311 million, 800-room Hyatt hotel just east of the Bartle Hall ballroom. But petitioners could appeal the ruling to a higher court.

An attorney for the petitioners, Jonathan Sternberg, said they “obviously disagree” with the judge’s decision. He said he would talk with his clients to decide whether to appeal. He said the law gives his clients 30 days to ask the judge to reconsider, and then they’ll have 10 days after that to appeal to the Missouri Court of Appeals.

Mike Burke, a Kansas City attorney working with the hotel development team, cheered the ruling and said it’s time for the project to proceed.

“We are very gratified,” Burke said. “We think it’s a very strong opinion.”

The judge also assessed court costs against the petitioners, and Burke said it would be a waste of time and money for them to pursue a long-shot appeal.

The hotel was announced with great fanfare last May, and the City Council approved tax incentives and a subsidy to help make it a reality in July. The developers had hoped to close on the deal in December and break ground this spring, with an opening date in 2018.

Burke said that under the best case, construction might now be able to start this fall and would take 27 months, into 2019.

A group that opposed the city contribution and tax incentives to the project gathered more than the 1,700 signatures of registered voters required under the charter to put the hotel financing on an election ballot. They had asked the judge for an order commanding the city to do just that.

But Phillips said the city charter wasn’t the only consideration, and there were legal problems with the petitioners’ proposal.

“The city lawfully entered into agreements with the developer and other parties for the development and financing of the project,” she wrote. “Regardless of the outcome, an election as required by the proposed ordinance would delay the approved hotel project and cause the city to be in breach of the executed agreements.”

Mayor Sly James, a big backer of the new convention hotel, was pleased Thursday night. He had said the public-private financing was the best deal the city would ever get to build Kansas City’s first new convention hotel since the Reagan administration.

“It is the result we were expecting and hoping for, and I’m glad it’s over,” James said.

City Attorney Bill Geary said the judge’s ruling showed the petitioners did not have the right to delay the project after the City Council had approved it last summer.

“We hope the hotel project can now move full speed ahead,” he said, “knowing we already have conventions booked in our city based on the new hotel.”

The case was heard Feb. 2 in Independence before the judge, without a jury. Lawyers for the petitioners, the city and the hotel development team presented arguments.

Thursday’s victory comes on the heels of a disappointment for the city with another economic development proposal. A different petitioner group had challenged tax incentives to redevelop a Crossroads building for BNIM architects. That petition drive caused the BNIM deal to fall apart last week.

The $300 million project is designed to add 800 rooms to the city’s downtown hotel stock.

Lynn Horsley: 816-226-2058, @LynnHorsley

Diane Stafford: 816-234-4359, @kcstarstafford

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