Kansas City’s favorite art deco skyscraper, the Power & Light Co. Building, would become a 220-unit apartment tower as part of a $60 million plan that’s considered its best shot to date for redevelopment.
NorthPoint Development, a deep-pocketed local firm with a strong resume, has a contract to buy the landmark from its New York owner. It wants to renovate the tower into luxury apartments and build a 465-space garage next door that would be wrapped with another 50 new apartments facing the street.
“It’s an incredible building, and it’s an honor to shepherd its redevelopment,” said Nathaniel Hagedorn, NorthPoint president and CEO.
If NorthPoint receives its necessary city approvals for incentives, construction would begin this fall with completion expected by late 2015 or early 2016.
The 36-story Power & Light Building at 14th Street and Baltimore Avenue has almost become a ghost tower since its namesake tenant, Kansas City Power & Light, left in 1991.
The lone remaining tenant is BNIM Architects, which occupies the first three floors including a lobby that resembles the inside of an art deco jewel box.
There have been multiple attempts to redevelop the landmark, which has been owned since 1964 by the Shulman family of New York, but all have fallen through. The original asking price was $17.5 million in 2012 but has dropped several million since then.
Previous plans included upgrading it as modern office space, pairing it with a second tower as a major convention hotel, or converting it to apartments.
But the proposal by NorthPoint, which has developed several large suburban apartment complexes and a raft of massive distribution centers around the metro area, has the smell of a winner, according to representatives of the building’s owner.
“This one feels different to us in large part because of NorthPoint and Nathaniel grabbing the bull by the horns and having a vision for the highest and best use,” said Spencer Thomson of Thomson Walker LLC, the attorney representing Gailoyd Enterprises, the Shulman business entity.
“They have an excellent track record and seem very well organized and motivated.”
Gib Kerr, the real estate broker who’s been marketing the skyscraper for several years, said, “I don’t think we could find a better buyer. Not only does he love the building, he’s one of the most active developers in town and probably one of the better capitalized.”
Kerr added that the NorthPoint redevelopment plan does not include a vacant lot owned by the Shulmans west of the Power & Light Building. That property has been frequently mentioned as a potential hotel site.
Hagedorn and his partners plan to invest $40 million in the Power & Light development. The rest would consist of $14 million in federal and state historic tax credits and $6 million in tax-increment financing. The proposal is expected to be submitted to the Kansas City TIF Commission in June.
The $6 million in TIF assistance would come from incremental tax revenues being generated by the Hilton President Hotel development across Baltimore from the Power & Light Building.
The historic hotel, which reopened in 2005, has performed well financially, and at the current rate its bond is expected to be repaid five years ahead of schedule in 2023.
Under the NorthPoint redevelopment plan, the President Hotel bond would be repaid according to its original schedule with the extra TIF revenues diverted to the Power & Light project.
Hagedorn said his proposal has the informal endorsement of various taxing jurisdictions, including the school district and Jackson County, as well as the city.
“Everybody recognizes the iconic nature of the building and the challenges it faces,” he said. “We feel we have a program everybody can support, and nobody will be blindsided.”
Ron Jury, the developer of the President Hotel, supports the plan.
“I think it’s a wonderful proposal, and if we can work together to make it happen, I’m all for it,” he said.
Jury said guests at the President Hotel would be able to park on one level of the five-level garage planned for the Power & Light project. Apartment residents would be able to use room service and maid service provided by the hotel.
The Power & Light Building was the pride of a booming Kansas City and considered the local equivalent of New York’s Empire State Building when it opened shortly after the beginning of the Great Depression.
It took 19 months to build at a cost of $4 million and was the first of several major art deco structures built in the 1930s, including Municipal Auditorium and City Hall.
The 479-foot skyscraper, designed by the local firm of Hoit, Price & Barnes, was Missouri’s tallest for four decades. A 1934 account said its crowning beacon could be seen by aircraft 75 miles away. Its six-story lantern tower was designed to mimic a sunburst radiating energy, but it has been dark the past few years.
Hagedorn wants to light up the building again.
“I’m not from Kansas City,” he said. “When my wife and I moved here, we were poor. I never would have imagined I’d be the steward of this building.”
NorthPoint was founded by Hagedorn in 2008 and has rapidly become a big player in the Kansas City development world.
Its industrial projects include the Horizons Business Park in Riverside and the Kansas City Logistics Park at the BNSF Railway intermodal center in Edgerton. Residential projects include the Burlington Creek and Village West apartment complexes.
Hagedorn’s financial backers include TradeBot Properties, an entity controlled by the Cummings family, owner of TradeBot Systems and founder of the Bats Stock Exchange; Brandmeyer Enterprises, controlled by the Brandmeyer family; Jim Ferrell of Ferrellgas; and Northwestern Mutual.
The redevelopment plan calls for 80 percent of the apartments to be one-bedrooms averaging about 750 square feet. The largest two-bedroom apartments would be 1,600 square feet.
Rents would be about $1.65 per square foot, comparable to the price of units in the new 25-story Cordish Co. apartment project scheduled to break ground April 14 at 13th and Walnut streets. That 315-unit project is expected to be completed about the same time as the NorthPoint development.
About 20 apartments in the historic tower will have outdoor terraces, a feature allowed by the building’s step-back design. All 50 of the new apartments that will wrap around the garage will have balconies. The new apartments will be five-stories tall along Baltimore and 13th Street.
Other amenities planned for the development include a rooftop pool on the garage, a fitness center, a business center and a spa. The apartments will have hardwood floors, granite countertops and high-end appliances.
The project architect is NSPJ Architects of Prairie Village. A contractor has not been selected.
About 6,500 square feet of retail space is planned for the ground level of the garage, and the lobby of the historic tower would be reserved for commercial space, preferably one that would allow public access such as a restaurant.
Hagedorn said BNIM probably would be welcome to stay, but the architecture firm would have to move during construction.
Steve McDowell, a partner at BNIM, said his firm loves the space it has occupied for about 14 years, but added it would be a “huge obstacle” if it had to relocate during construction.
“A lot of things have been up in the air for a few years now,” he said. “We’re interested in understanding what NorthPoint has in mind.”
There may be one other twist to Power & Light redevelopment plot.
In 2002, a previous developer had proposed renovating the old building and erecting a condo tower and 700-space garage on the north lot. At the time, Cordish was planning its entertainment district and the city agreed to give the Baltimore firm control of 10,000 square feet of retail on the street level of the garage and after-hours access to 500 parking spaces.
Since then, Cordish has insisted its earlier agreement be honored, a demand that has complicated other development plans for the Power & Light Building. In an interesting twist, Cordish itself was the last firm to have a contract with Gailoyd to redevelop the property and allowed it to expire in December.
Hagedorn and Thomson say the Cordish agreement required that only a “good faith” effort be made by the city to honor the request, and that effort has been satisfied.
“We don’t think there’s an issue,” Thomson said. “That’s been resolved and there are no grounds for any lawsuits from Cordish.”
Nick Benjamin, the top local Cordish executive, responded: “Nothing has changed with respect to our development rights on the Power & Light Building block.”
As for his financing plan, Hagedorn said his request for incentives is modest compared with the scale of the building, noting the $6 million in TIF assistance from the city represents 10 percent of the cost.
He added that historic tax credits would be essential. The state historic tax program has been under attack once again in Jefferson City this year, and critics would like to put a cap on the program.
The developer said it will cost $3.1 million alone to replace the windows on the Power & Light Building to meet historic preservation standards.
If the historic tax credit request is denied, “it would have a major effect on the building being done. Period,” Hagedorn said.
“It’s a Kansas City icon and it needs to be restored to its glory. Our firm is the right firm to do it.”