Hotel Bravo- 17th and Wyandotte

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KCPowercat
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Re: Hotel Bravo- 17th and Wyandotte

Post by KCPowercat »

is the market really saturated? A bunch of holiday inn express / hyatt house / indigos isn't really the same league as this hotel, at least how it's proposing itself.
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beautyfromashes
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Re: Hotel Bravo- 17th and Wyandotte

Post by beautyfromashes »

And is saturation bad? It will drive down nightly rates, push older hotels to remodel or convert to affordable housing and is a positive for getting big events and conventions.
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Re: Hotel Bravo- 17th and Wyandotte

Post by KCPowercat »

that and the whole story about hotel demand going down and oversaturation wasn't based in the best facts. Of course more supply decreases occupancy if no more demand, but that isn't the expectation when you build new hotels.
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Re: Hotel Bravo- 17th and Wyandotte

Post by normalthings »

KCPowercat wrote: Thu May 09, 2019 10:23 am that and the whole story about hotel demand going down and oversaturation wasn't based in the best facts. Of course more supply decreases occupancy if no more demand, but that isn't the expectation when you build new hotels.
Surprisingly enough, hotels are being proposed because demand is increasing.
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Re: Hotel Bravo- 17th and Wyandotte

Post by Critical_Mass »

KCPowercat wrote: Thu May 09, 2019 9:41 am is the market really saturated? A bunch of holiday inn express / hyatt house / indigos isn't really the same league as this hotel, at least how it's proposing itself.
The 5-star hotel market in KC is completely saturated. 0% occupancy rates currently!!
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Re: Hotel Bravo- 17th and Wyandotte

Post by LCDSI »

https://www.kshb.com/news/local-news/kc ... town-hyatt

here's the kshb clip on it.

Interesting that they mention it would be a hyatt. My guess is probably one of their higher end ones.
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Re: Hotel Bravo- 17th and Wyandotte

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Critical_Mass wrote: Thu May 09, 2019 10:38 am The 5-star hotel market in KC is completely saturated. 0% occupancy rates currently!!
=D>
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Re: Hotel Bravo- 17th and Wyandotte

Post by WoodDraw »

I mean the ambassador, which I would consider one of the higher end hotels downtown, just expanded because they needed more capacity.

I know we are adding a ton of rooms downtown, but it was way under built for so long.
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Re: Hotel Bravo- 17th and Wyandotte

Post by kenrbnj »

0% vacancy (100% occupancy) is unprecedented. Industry averages; normalizing for regions/etc: Target is ~72% - 75%.

For a product class to have 90% or above suggests market demand.

Interesting the rumors, of late, are Hyatt. "Park Hyatt" would likely be the product offering. What is most curious is how Hyatt managed to largely exit the Kansas City market after their exit from Crown Center. I never did get the straight story about who was the "separating party" from their lease.. When I did live on Union Hill, those whispers were pretty easy to listen to.

If anyone has the straight poop about Hyatt Regency Crown Center (the "why?") -- you have my undivided attention!

The rumors of Hyatt as the operator of this "Bravo" is rational, however..
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Re: Hotel Bravo- 17th and Wyandotte

Post by kcjak »

kenrbnj wrote: Thu May 09, 2019 1:03 pm 0% vacancy (100% occupancy) is unprecedented. Industry averages; normalizing for regions/etc: Target is ~72% - 75%.

For a product class to have 90% or above suggests market demand.

Interesting the rumors, of late, are Hyatt. "Park Hyatt" would likely be the product offering. What is most curious is how Hyatt managed to largely exit the Kansas City market after their exit from Crown Center. I never did get the straight story about who was the "separating party" from their lease.. When I did live on Union Hill, those whispers were pretty easy to listen to.

If anyone has the straight poop about Hyatt Regency Crown Center (the "why?") -- you have my undivided attention!

The rumors of Hyatt as the operator of this "Bravo" is rational, however..
The entity that runs/manages Crown Center was interested in reducing costs and by getting both properties under a single company (Marriott/Starwood), they could streamline business expenses like food management, marketing of meeting space and make renovations cheaper and more efficient.

Hyatt had plans to build on the Plaza around the same time they lost the Crown Center property, either north of the Sheraton Suites or 46th Terr/Pennsylvania, but the proposal was determined to be too large and required too many incentives.
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Re: Hotel Bravo- 17th and Wyandotte

Post by LCDSI »

kenrbnj wrote: Thu May 09, 2019 1:03 pm 0% vacancy (100% occupancy) is unprecedented. Industry averages; normalizing for regions/etc: Target is ~72% - 75%.

For a product class to have 90% or above suggests market demand.

Interesting the rumors, of late, are Hyatt. "Park Hyatt" would likely be the product offering. What is most curious is how Hyatt managed to largely exit the Kansas City market after their exit from Crown Center. I never did get the straight story about who was the "separating party" from their lease.. When I did live on Union Hill, those whispers were pretty easy to listen to.

If anyone has the straight poop about Hyatt Regency Crown Center (the "why?") -- you have my undivided attention!

The rumors of Hyatt as the operator of this "Bravo" is rational, however..
If it is indeed a Park Hyatt, I'd be impressed. That is high end, and there are only 7 in the states.
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Re: Hotel Bravo- 17th and Wyandotte

Post by WoodDraw »

I also think that hotels are one thing that we're uniquely bad at talking about because we all live downtown so never use them.

There's a tendency to look at them all as a bunch, but you do need different flags at different levels.
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Re: Hotel Bravo- 17th and Wyandotte

Post by FangKC »

...
Jason Fulvi, the new president and CEO of VisitKC, said the downtown hotel market would be “saturated” if all the recently completed and planned new hotel rooms are added to its inventory.
...

https://cityscenekc.com/tif-commission- ... luctantly/
This is the guy whose job it is to know such things, so I will take him at his word.

The point though is do they really need incentives? You all are basically making the arguments for why they don't. Huge demand, etc. More product increases more demand. No comparable product.

If there is such market demand for this product, and they are so confident of that, then why can't they finance it themselves? A block away--the Courtyard by Marriott/Residence Inn was built -- without incentives. Courtyard even paid for their own garage. The Hampton Inn across the street also was built -- without incentives.

I doubt those hotels' profit per per sq. foot for room rentals will be what this proposed luxury product will command. Yet, they didn't need incentives.

Hotel Bravo will be using the Webster House garage, and also the PAC garage, for their guests. They don't have the usual argument of "we have to build a parking garage, and need incentives for that extra cost" argument. They aren't having to gut a historic building, adhere to historic preservation guidelines, do asbestos abatement, or put in new wiring and plumbing, duct work, etc., so there is no traditional "it would be cheaper to knock it down, and build new" argument. Other competing hotels that got incentives needed them for those reasons.

Why should Courtyard/Residence Inn/Hampton Inn pay full taxes and the Hotel Bravo shouldn't?

Courtyard/Residence Inn/Hampton Inn both added much needed retail spaces along Main Street as well. I don't see Hotel Bravo adding retail space. I guess the renovation of the Quixotic space on Broadway must be their public amenity. For as long as it lasts. That building, along with that entire block on the west side of Broadway, will most likely get redeveloped as soon as Copaken can find tenants to justify a new development. Then that Quixotic rehearsal space will go bye-bye.

The answer is that they can finance it themselves. They just don't want to because they would make even more money if they got a property tax abatement, etc., for 23 years.

Save use for incentives for projects that need it to happen. You continue shooting the incentives wad this way, and you will see voters pass that cap on incentives that will stop some future projects we need (like anything in the East Village, set-asides for affordable housing downtown).

Is there a hotel project for which Whitney Kerr isn't trying to get incentives? He just spent a decade pitching that site the Loews is being built on.

Citations:
Two more Marriott flags will fly in downtown Kansas City

Chartwell Hospitality, the real estate company developing two side-by-side Marriott hotel properties in downtown Kansas City, is two months from opening the doors.
...
The project attracted special attention from the outset because it has no tax abatement or other development subsidies. Almost all new hotels being built or planned in the downtown and Crossroads areas — and there are at least 10 in the works — are using or requesting some kind of public financing assistance.
...
https://www.kansascity.com/news/busines ... 42462.html
Groundbreaking for $25 Million Hampton Inn Expected Soon, Latest Hotel in Growing Crossroads District Market

A seven-story Hampton Inn hotel on the northeast corner of 16th and Main is expected to start construction in October, a project that is reinforcing the Crossroads reputation as the hip place to stay downtown.
...
Busby said his firm explored doing a project in downtown Kansas City for seven years before moving forward. The $25 million project is being done without tax incentives. It will include retail space along 16th and Main streets.
...
https://cityscenekc.com/groundbreaking- ... ct-market/
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Re: Hotel Bravo- 17th and Wyandotte

Post by WoodDraw »

I think it depends a bit on what goes into it architecturally and amenities. Also new construction.

I'm actually torn on this. I think the pr and politics is bad but the project good. I wish they could have created a better structure of incentives.

We also have an editorial board and newspaper who don't understand how tif works, and that creates a political problem.

I would approve it, but I see why it's hard and people disagree.
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Re: Hotel Bravo- 17th and Wyandotte

Post by FangKC »

beautyfromashes wrote: Thu May 09, 2019 10:12 am And is saturation bad? It will drive down nightly rates, push older hotels to remodel or convert to affordable housing and is a positive for getting big events and conventions.
This--to many--would come across as a ridiculous statement. It appears you were smoking weed before writing it.

Many of our older hotel properties have been recently renovated to operate as hotels, and went to a lot of expense to do so. The Hilton President was a complete gut job. They took out all the interior walls on each floor to reconfigure to larger rooms, all new wiring, plumbing, ducts, add water sprinklers, etc. The lobby, Drum Room, and historic ballrooms/dining rooms were retained and restored.

The incentives packages they required are still in effect (some with up to 25-year property abatement, sales tax diversions, and also historic tax credits to pay for the adherence to preservation design standards). Some are not even halfway through the abatement periods that helped finance them.

They need to make premium room rates to pay off long-term debt incurred to do the renovations, so pushing down nightly rates is not the way to do that.

You also don't want them to fail. Then we are back where we have properties sitting empty waiting for some developer willing to convert them to residential--within just a few years of an earlier renovation. We don't want to be renovating/converting every five or ten years.

Look at how long it has taken to convert the former Federal Reserve Bank to a hotel -- 11 years and counting.

Having to convert a recently-renovated hotel property to residential would likely involve MORE incentives, or at least extending the property tax abatement for even longer. Converting a hotel to apartments is not as easy as you think. To create a one bedroom apartment would most likely require connecting three hotel rooms. Some of our hotels have fairly small rooms. Doing that would likely require removing one bathroom, converting another to a kitchen, and also sealing up two entry doors. It might involve retooling heating and cooling. Hotel rooms generally all function using the same shared system. For purposes of utility billing for apartments, you want to separate systems.

Even making them all micro-apartment studios requires adding kitchens. Otherwise it's boarding house.

All made more difficult to do if you are converting to affordable apartments, which means you need incentives. Most new affordable units can't pay for themselves without incentives, or some state or federal financing.

Additionally, current practices discourage making an entire building affordable units, as it tends to turn into a problematic property in a short time (read the entire Renovation of Armour Boulevard Buildings thread).

One of the reasons we want to maintain our existing historic hotel stock is because the buildings already are set up to operate that way. They have big commercial kitchens, big freezers, in-house restaurant/dining rooms, dumbwaiter systems, big water and heat boiler systems, ballrooms, meeting rooms, beautiful old lobbies, etc. The President, Phillips, and Aladdin all have vintage, operating lobbies that are part of the charm of the property.

But here's the big thing. Most of these older hotel properties are the closest to the convention center, civic arena, public theaters, etc.
Last edited by FangKC on Thu May 09, 2019 3:34 pm, edited 1 time in total.
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Re: Hotel Bravo- 17th and Wyandotte

Post by kenrbnj »

kcjack: your explanation regarding Starwood (Sheraton/Westin) = Makes PERFECT sense.

With regards to TIF or similar tax incentive? Making an improvement in an urban venue, versus a greenfield development had been traditionally been cause for such incentives.

For example, bringing a grocery to a "food desert", developing a brownfield, incentive to bring new office inventory into an urban area, with lack of parking, etc.

If Kansas City City Council wants a upper bracket boutique hotel; they feel this is an element to maximize yield in their investment into the PAC and Bartle? Yield on the incentives. If the thinking is the new hotel will over-saturate the hospitality market? Deny the request for TIF.

For consideration: Would "Bravo" placement at 17th and Wyandotte "open" the region around Broadway and Washington, 16th St and south?
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Re: Hotel Bravo- 17th and Wyandotte

Post by Critical_Mass »

I view this project as a reduction of current incentives. The current non-profit ownership of this land is effectively a 100% TIF which never expires.
Anti-tax incentive fans should be jumping on this.
If there is such market demand for this product, and they are so confident of that, then why can't they finance it themselves? A block away--the Courtyard by Marriott/Residence Inn was built -- without incentives. Courtyard even paid for their own garage. The Hampton Inn across the street also was built -- without incentives.
I guarantee you that the PAC would never sell this land to someone wanting to build a Courtyard Marriott/Residence Inn or Hampton Inn equivalent. They want something high-end to compliment the PAC. They would probably rather have grass or landscaping next door than a mid-tier hotel chain which features EIFS/stucco as an exterior finish.
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Re: Hotel Bravo- 17th and Wyandotte

Post by beautyfromashes »

FangKC wrote: Thu May 09, 2019 3:25 pm
beautyfromashes wrote: Thu May 09, 2019 10:12 am And is saturation bad? It will drive down nightly rates, push older hotels to remodel or convert to affordable housing and is a positive for getting big events and conventions.
This--to many--would come across as a ridiculous statement. It appears you were smoking weed before writing it.
Well, I didn’t even read your post after this opening.
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Re: Hotel Bravo- 17th and Wyandotte

Post by FangKC »

You showed me. :lol:
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Re: Hotel Bravo- 17th and Wyandotte

Post by WoodDraw »

I think comparing this to a courtyard down the street is pretty stupid.

The ambassador and the courtyard have the same flag but completely different markets.

My worry is just that they get the incentives and it's just a backdoor door for Hyatt to come in with a mini, subsidized convention hotel and all the luxury goes away.
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