Government & Politics

KC convention hotel development plan filed with the city; hearing is set for April

Downtown Kansas City convention hotel planning dates to last year

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

After years of work, backers of a new downtown Kansas City convention hotel have filed their development plan with the city and are hoping for final regulatory approval from City Hall in April.

That would precede a financial closing in May and construction starting shortly thereafter on the site at 16th Street and Baltimore Avenue, next to the Bartle Hall Ballroom.

“We have an April 4 hearing,” attorney Mike Burke, who represents the development team, said Tuesday. April 4 is the date that the hotel plan is scheduled to be heard by the City Plan Commission, a citizens’ advisory group. Coincidentally, it also happens to be election day, when Kansas City voters will consider an $800 million infrastructure bond package on the ballot.

The application for the rezoning and development plan approval asks a simple question: Why is action justified?

And Burke wrote a simple answer: “To construct the first convention hotel since 1985.”

This is an important milestone for the project but isn’t its last big hurdle. That involves getting a guaranteed maximum construction price, which Burke doesn’t expect until early May. The construction price needs to fit within the total budget of about $311 million for the project to work financially.

Part of the plan review includes a traffic study and airplane clearance review, but Burke said neither of those should be problematic. The building’s height has actually been reduced from an earlier concept and is now expected to be 18 stories on the Wyandotte side and 22 stories on the Baltimore side.

Assuming the Plan Commission recommends approval April 4, it could then move to the City Council that same week or shortly thereafter. This would be the last regulatory approval that the developers need from City Hall.

“It’s the last procedural issue,” City Manager Troy Schulte said Tuesday, adding that he believes the final financing is coming together for a mid-May closing. But Schulte acknowledged that the construction price must come within budget for the project to proceed.

The project was first announced in May 2015 but has encountered a number of hiccups since then. A group called Citizens for Responsible Government filed a lawsuit trying to force the public subsidies on the project to a vote. The lawsuit failed but slowed progress on the project.

Schulte, Burke and Mayor Sly James insisted the deal had been structured to minimize the risk to Kansas City taxpayers.

But some City Council members who took office in August 2015, after the deal was announced, were critical of the project, and worried about the risk to taxpayers.

City Councilwoman Teresa Loar was one of the biggest skeptics. On Tuesday, Loar said she still wants to see the guaranteed maximum price, and proof that the developer has sufficient private financing.

“I encourage them to keep going, as long as they are certain they have the financing, and the city is not at risk for this,” Loar said.

Mayor Sly James, who has championed the hotel deal, said Tuesday he is confident that he’ll have more than the seven council votes needed in April for final approval.

“Optimistic, and looking forward to it, and want to see ground broken,” James said. “Finally we get a convention hotel that we’ll be able to use in order to attract bigger and better conventions.”

In December, KC Hotel Developers LLC said they had obtained financial commitments from a national lender for a construction loan to make the project a reality, although details were not released.

Burke said the basic elements of the project have not changed. It is expected to be an 800-room hotel, run by Hyatt, at the northwest corner of Baltimore and 16th.

The total cost of the project, including land and other improvements, is supposed to be $311 million, although Burke said Tuesday that the general contractor, JE Dunn, is still working on a final guaranteed maximum construction price. That is now expected in early May.

Burke said other pieces of the puzzle are starting to come together. The building design is underway, and the development team has an executed contract to purchase, for an undisclosed price, the National Hereford Association building, which takes up about a quarter of the block where the hotel will be built. The entire block covers from Baltimore to Wyandotte and 16th Street to Truman Road.

The Hereford Association deal is supposed to close when the rest of the financing closes, which Burke said now should be in May. With a groundbreaking shortly thereafter, the hotel could potentially open in late 2019 or early 2020, he said.

The website for the proposed hotel is http://heretostaykc.com/

Lynn Horsley: 816-226-2058, @LynnHorsley

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