KCRag Forum

taxi wrote:

FangKC wrote: If this goes through, it will be the second Kansas City structure to get designation outside those rules (the other being Kemper Arena).

The BMA building was also less than 50 years old when it was listed.

I was in favor of that listing and Kemper but I agree with your concern and wonder what the argument is for getting this one on the National Register of Historic Places.

The justification was the glass curtain wall.

Again, my primary worry about this trend is that newer buildings that don't yet meet the age standard will be sucking up historic tax credits that would normally be awarded to 100-year-old buildings that may not be saved because the tax credits went elsewhere. This could especially be the case if the Missouri Legislature cuts back on the historic tax credits in the state. More buildings would be competing for fewer credits.

We would have situations where buildings like the Hawthorne Plaza Apartments at 39th and Main would be in direct competition for tax credits with the Flashcube Building. So a cheap building that was built to be demolished would be in fighting for limited awards of tax credits with a much-older structure that was built well.

Not to mention redevelopment of arguably more historic structures that would have less economic viability because of their configuration or location--like Western Bible College at 22nd and Tracy, the Wheatley-Provident Hospital at 19th and Forest, or the old Vine Street Workhouse, and the Water Department buildings along Vine.

From the article:

...

That will require that the building be listed on the National Register of Historic Places. Therefore, Worcester said, his firm made its recent $5.7 million offer on the building contingent on getting through the first step of the registration process: State Historic Preservation Office approval.

...

Belke said that it would cost about $3 million to repair the curtain wall. The total cost of resolving all blighting factors is $14.8 million, he estimated. Besides the curtain wall cost, that estimate includes $2.8 million for replacing the building’s outdated electrical system and $1.3 million for asbestos removal.

...

The Stencil Group, which paid $3.5 million for the building, had similar apartment-conversion plans for it but agreed to flip it to Worcester at a $2.2 million markup.

...

The way that capitalism is supposed to work in real estate is when a building has significant problems that require attention during a renovation, you negotiate the price down to compensate for the cost of fixing them. As we see, The Stencil Group made a tidy $2.2 million profit by flipping the building after only owning it a short time. Now Worcester's firm is trying to get subsidies to cover the cost of fixing these problems. Perhaps he shouldn't have paid so much for the building, and used the savings to pay for some of the repairs himself instead of counting on getting historic tax credits.

I do worry that it is becoming the case in too many instances where the cost of building maintenance and renovations, that should be paid for by the building owner as a normal part of updating, are now becoming the responsibility of taxpayers.

The most recent example of this is the Intercontinental Hotel on the Plaza.

Eon Blue wrote:

FangKC wrote:I must admit something about Commerce Bank/Tower Properties constructing a nine-story building of this size downtown to be a "throwaway building" meant to last only 25 years really gets under my skin. Now it's blighted. So if you really think this through, Tower Properties cleared the North Loop because it was blighted, only to put up a cheap building that 43 years later is also blighted.

And many of those buildings cleared by Tower would probably be in better shape and more coveted than the Flashcube today with a little upkeep and maintenance.

Yes, the American Bank Building, that used to be on part of the site, was certainly a more significant building.

http://kchistory.org/cdm4/item_viewer.p ... OX=1&REC=4



The Kemper Building next door was not an insignificant building either. It was also called the Whitney Building at one time.

http://kchistory.org/cdm4/item_viewer.p ... OX=1&REC=8

FangKC wrote:
The way that capitalism is supposed to work in real estate is when a building has significant problems that require attention during a renovation, you negotiate the price down to compensate for the cost of fixing them. As we see, The Stencil Group made a tidy $2.2 million profit by flipping the building after only owning it a short time. Now Worcester's firm is trying to get subsidies to cover the cost of fixing these problems. Perhaps he shouldn't have paid so much for the building, and used the savings to pay for some of the repairs himself instead of counting on getting historic tax credits.

I do worry that it is becoming the case in too many instances where the cost of building maintenance and renovations, that should be paid for by the building owner as a normal part of updating, are now becoming the responsibility of taxpayers.

The most recent example of this is the Intercontinental Hotel on the Plaza.

I'm certainly no real estate development expert, but the "contingency on tax credits" part of the purchase deal is what sticks out to me.

Did Stencil say they were going to seek tax credits? I didn't see any mention of it but may have missed it in my quick look-back in the thread and Biz Journal article linked about Stencil's purchase. The deal reads to me like Stencil either didn't think about historic designation (unlikely) or didn't want to go thru the process of it. If Worcester Investments was willing to give it a try, making the $2.2 million markup a wash or profitable for them?? If the tax credits fall thru, the sale is a no-go making it a low-risk for Worcester and Stencil just moves on with their plan. Not sure if I'm articulating that well. Seems like a lot of real estate transactions are contingent on financing terms and are ultimately struggling to happen (looking at you new convention hotel and Holtman Heights at 18th & Holmes)

I guess I need some input here form real estate and tax people. Shouldn't the investment a building owner puts into their building to maintain, and update, the structure be deducted on their taxes as regular business expenses in real estate, and spread out over many years?

When I see a situation like the Intercontinental Hotel, where the building owners are seeking a blight designation, and sales tax revenue, through a CID, be collected to pay for regular renovations, shouldn't that be considered a regular business expense for running a hotel, and thus be something that is deducted as a regular business expense? Even if the hotel building isn't owned by the hotel operator, shouldn't that same type of business deduction be available for the property owner who leases the building to the hotel operator?

I admit my ignorance about this. It just seems to me that any property owner who is running a business, whether it be renting apartments or offices, or operating a hotel, or as headquarters for their business, should be able to deduct these expenses on their taxes, and not be expecting taxpayers or governments to help them finance these things.

I hate the damn Flash Cube building. Not only for its design but for what it represents to me: the destruction of the junction.

DO NOT make it historic, please!!

"shouldn't that be considered a regular business expense for running a hotel, and thus be something that is deducted as a regular business expense?"

What one explained to me some time ago this is about how the customer is charged, especially with internet searches.
To keep things simple say the hotel charges $200.00 per night. The CID tax is 1% or $2.00 per night. With the CID the hotel can show the internet searching customer the room cost of $200 instead of $202. Yes, it is game businesses play but the customer pays one way or another.
I'm sure there are other reasons.
As an add-on, it's like the luggage fees and the fees airlines charge.

I would be fine, no, I would encourage this building to be torn down and something new put in its place. Awful building.

More infill of surface lots needed before anything torn down.

earthling wrote:More infill of surface lots needed before anything torn down.

Agreed, but I'm willing to make an exception for this particular structure.

Blow it up and put the Junction back!

We haven't had a nice implosion for a while.

Eon Blue wrote:Blow it up and put the Junction back!

This is my position on the issue as well.

My first though is if they ever wanted to build the baseball stadium there, would a historic designation impede that?

I wish the developer of the Flashcube Building would consider adding new infill retail buildings on the small plaza in front of the building that extends to the street. That Plaza is mostly wasted space. I wish the City would mandate any subsidies include doing this.

I came across this tweet about a micro apartment development being added to garage in Indianapolis by Milhaus Development where they are building on a narrow strip of land adjacent to the garage.







I think Catholic Charities should consider doing this on the narrow strip of land fronting Main Street at 8th next to their garage. It would hide the garage, and add micro apartments along the streetcar line. The Diocese has built housing before as they did with Cathedral Square next to the Cathedral of the Immaculate Conception at 12th and Washington. It could be housing for Diocese staff, or it could be for seniors.











Google Streetview of the garage in Indianapolis.

http://tinyurl.com/j532te3

http://tinyurl.com/hb8y4t5

http://tinyurl.com/h7posmg

That's not a bad idea for that spot

Nice idea but with KC's abundant "vacant" land available I don't see that happening here for a long time.

I don't want the flashcube building torn down.
There's an ocean undeveloped surface parking lots on all sides of it that need new construction.

I'd love to see KC bring back the "Junction."
But I don't see why it's practical until the north loop of the Interstate gets eliminated and the original streetgrid gets put back in place.
The north loop needs so much - it's staggering how empty it is.

.