P&L district, Cordish, Retail discussion (from 14th/Main thread)

LenexatoKCMO · Post by **LenexatoKCMO** » Tue Mar 24, 2009 3:40 pm

The initial failure makes future failure that much more likely as well. How well is that sad little JABanks going to do sitting all by it's lonesome, surrounded by a big block of nothing? I would hope Cordish has at least had the decency to give them free rent until they can find some other credible tennants. If I was the regional management of JABanks I would be hellfire pissed and probably have my lawyers on the phone. So when the JABanks goes tits up and the district becomes known as a place where your business will fail, it will then be that much more impossible to find tennants. Cordish's retail failure may ultimately be irreversable.

LenexatoKCMO · Post by **LenexatoKCMO** » Tue Mar 24, 2009 3:42 pm

KC-wildcat wrote: Cordish may have been overly optimistic, but I'm not sure they completely failed by not securing tenants in this market and in this economic downturn.

Once again - the space should have been leased long, long before the economic downturn was ever on the horizion. You do not lease the majority of your retail development after it is fully constructed. That is not a viable excuse.

kcjak · Post by **kcjak** » Tue Mar 24, 2009 3:50 pm

trailerkid wrote: What retailers would you like to see beyond H+M? I will put money on the fact that Cordish secures better tenants within the next year than your suggestions.

You'll never get an answer on this. I'll never understand why, even after spending millions of dollars on the P&L, those who don't agree with the funding mechanisms still bitch about it the overall development. Lenexa doesn't like the JosABanks or the size of it. Doesn't care about H&M or any other tenants people would like to see that my set it apart from any other shopping area in the city, driving traffic and lessening taxpayer burden.

I'd also like to know - without having to read through an additional statement of what's wrong with the P&L or clarification of his views - what retail LenexatoKCMO would like to see in the P&L.

KC-wildcat · Post by **KC-wildcat** » Tue Mar 24, 2009 3:54 pm

LenexatoKCMO wrote: Once again - the space should have been leased long, long before the economic downturn was ever on the horizion. You do not lease the majority of your retail development after it is fully constructed. That is not a viable excuse.

Once again - DTKC is a tough sell for retailers (bad economy or good economy). Agreed? I'm just trying to put Cordish' action or inaction into perspective. You've got to define the marketplace before you can label Cordish' lack of leasing as a total failure. Before Cordish came, how much retail was DT? In the last 20 years how much sustainable retail was DT? Ask yourself why. We need more residential; a component over which Cordish has very littel control.

LenexatoKCMO · Post by **LenexatoKCMO** » Tue Mar 24, 2009 3:56 pm

kcjak wrote: I'd also like to know - without having to read through an additional statement of what's wrong with the P&L or clarification of his views - what retail LenexatoKCMO would like to see in the P&L.

At this point why do the specific retailers even matter? They have failed to bring us ANYTHING in the way of retail. Bithching about the nature of the retailers might be a breath of fresh air around here - but since they don't exist, it is kind of hard to evaluate how well they fit in. I could list off my 25 favorite places to shop - what the hell difference would that make? - Cordish isn't bringing anything, whether I like it or not.

LenexatoKCMO · Post by **LenexatoKCMO** » Tue Mar 24, 2009 3:58 pm

KC-wildcat wrote: Once again - DTKC is a tough sell for retailers (bad economy or good economy). Agreed? I'm just trying to put Cordish' action or inaction into perspective. You've got to define the marketplace before you can label Cordish' lack of leasing as a total failure. Before Cordish came, how much retail was DT? In the last 20 years how much sustainable retail was DT? Ask yourself why. We need more residential; a component over which Cordish has very littel control.

The residential population was a known commodity when they committed that they could do the job.

TheBigChuckbowski · Post by **TheBigChuckbowski** » Tue Mar 24, 2009 3:59 pm

LenexatoKCMO wrote: Perhaps they should have sub contracted that part of the project over to RED

Seriously? Name me more than a handful of vacant retail spots downtown that have had RED signs in the windows that still don't have RED signs in the windows. I can think of at least 5 that have been sitting empty with RED signs since I moved downtown 2.5 years ago.

KC-wildcat · Post by **KC-wildcat** » Tue Mar 24, 2009 4:08 pm

LenexatoKCMO wrote: The residential population was a known commodity when they committed that they could do the job.

So Cordish couldn't deliver on a promise. Gotcha. Which brings us back full circle. What's your point?

Are you upset that Cordish broke the promise? Or are you upset that Cordish didn't deliver on the promise?

You just admitted that the DTKC retail market is a tough sell at this point in the revitalization process. I'm not sure that any developer, Cordish included, would have given us a plethora of tenants before the recession boiled over. And, if no other developer would have done any better, than what is Cordish guilty of? Making bold proclomations? Being overly optimistic?

LenexatoKCMO · Post by **LenexatoKCMO** » Tue Mar 24, 2009 4:18 pm

KC-wildcat wrote: So Cordish couldn't deliver on a promise. Gotcha. Which brings us back full circle. What's your point?

Are you upset that Cordish broke the promise? Or are you upset that Cordish didn't deliver on the promise?

All of the above! Do you need more? OK - in addition to those two, I am angry that after Cordish has failed to deliver on those promises, they disavow all responisbility and foist all blaime on city hall, the economy, AEG, the citizens themselves - it's everyone but Cordish's fault.

loftguy · Post by **loftguy** » Tue Mar 24, 2009 4:43 pm

Some of Cordish's biz practices have appalled me.

I can't throw rocks at them now, for what they have or have not done in the big view, development wise.

I was peripheral to the cities seduction of Cordish to do this development. The mayor and her office (and a couple of mayors before her) scanned the country for potential developers to build significant change into downtown KC. Cordish was seen as the best opportunity, they were selected, a deal was hammered and they made it happen. It came at a cost to the city, but remember that Cordish has a couple hundred million dollars worth of skin in this game, too.

Better believe if I were the one taking this risk, in Cordish's shoes, I would have minimized it every way possible and then some, because in the best economy this was to be a difficult development.

I have spoken with potential retailers for the P & L. This was prior to the downturn. K-C Wildcat is right. Retailers can not make sense of the equation to come here, because it does not fit their formula, which is "rooftops equals customers". They don't know how to extrapolate buying experiences from the existence of 110,000 daily employees downtown, let alone visitors from the region or elsewhere. the analysis teams for retailers are made up of employees, who are wholly risk adverse and they follow the standard playbook for locating development. According to the bible these folks follow, Village West scores a much higher point total than downtown KC. Why?.....because it has been done before and it generally succeeded. They can select a location in Johnson County that has six competitors within a three mile radius. Why?.....because it has been done before and it generally succeeded.

This may soon change, though. More thoughts later........

KC-wildcat · Post by **KC-wildcat** » Tue Mar 24, 2009 5:01 pm

loftguy wrote:
I have spoken with potential retailers for the P & L. This was prior to the downturn. K-C Wildcat is right. Retailers can not make sense of the equation to come here, because it does not fit their formula, which is "rooftops equals customers". They don't know how to extrapolate buying experiences from the existence of 110,000 daily employees downtown, let alone visitors from the region or elsewhere. the analysis teams for retailers are made up of employees, who are wholly risk adverse and they follow the standard playbook for locating development. According to the bible these folks follow, Village West scores a much higher point total than downtown KC. Why?.....because it has been done before and it generally succeeded. They can select a location in Johnson County that has six competitors within a three mile radius. Why?.....because it has been done before and it generally succeeded.

This may soon change, though. More thoughts later........

Exactly, Retail hinges upon Residential. Everybody knows this. So, when Cordish came in promising all the riches in the world, I knew that it probably wouldn't happen right off the bat. I knew that we would need to see the condo towers come to fruition and see hundreds/thousands of more people living downtown. Apparently, some thought Cordish would waive its magic wand and make retail development feeasible in a district with few real residents.

Should Cordish have made such promises? No. They are guilty of lying. Could Cordish or any other developer landed these tenants with a little harder work and better business model? No. DTKC is simply not a hot retail market at this time.

I want retail as much as the next guy. But, I'm not ready to call Cordish a failure until the condo towers are up.

KCPowercat · Post by **KCPowercat** » Tue Mar 24, 2009 5:13 pm

KCPowercat wrote: Does every thread have to divert to this one issue? Let's use this to celebrate a 24x7 diner and other great restaurants on this block

Your answer is yes.

Midtownkid · Post by **Midtownkid** » Tue Mar 24, 2009 5:16 pm

I sure miss those old surface lots and our 'lifeless' downtown. eff-you Cordish for fuking it all up!!

KCPowercat · Post by **KCPowercat** » Tue Mar 24, 2009 5:26 pm

I think overall it's been an average job...they got some good tenants but have been slow and the retail was obviously a tough sell to book....does that make Cordish inept as described earlier, hardly? this is a combo of city politics, slow economy, tough demographics to sell, and overpromising....nothing that can't be overcome...and as was pointed out earlier, we now have the shells, they are built....does it really all have to be 100% up and running like a well oiled machine in 12 months? Kinda tough expectation to have....and yes I'm aware of how that impacts the city's budget, to me, that's another issue of bad estimates.

Highlander · Post by **Highlander** » Tue Mar 24, 2009 5:52 pm

KCMax wrote: As Commandante says, this does matter too, because the city is on the hook. Tax revenue is just 25% of projections - granted, largely due to the economy - but the fact that many bars opened later than projected and the retail still hasn't come to fruition bears a large part of that too.

Isn't the reduced tax revenue largely due to the delays in getting the project up and running? I'd have a hard time believing they are collecting only 25% of the projected tax revenue during actual operations considering the restaurant/bar portion of the development has been exceeding business projections.

Post by **KCMax** » Wed Mar 25, 2009 8:38 am

Highlander wrote: Isn't the reduced tax revenue largely due to the delays in getting the project up and running? I'd have a hard time believing they are collecting only 25% of the projected tax revenue during actual operations considering the restaurant/bar portion of the development has been exceeding business projections.

That's exactly why. They had just a handful of bars open in fall of 2007, then only opened a few more for the Big 12 tournament. They were way behind schedule.

GRID · Post by **GRID** » Wed Mar 25, 2009 12:05 pm

KC-wildcat wrote: Once again - DTKC is a tough sell for retailers (bad economy or good economy). Agreed? I'm just trying to put Cordish' action or inaction into perspective. You've got to define the marketplace before you can label Cordish' lack of leasing as a total failure. Before Cordish came, how much retail was DT? In the last 20 years how much sustainable retail was DT? Ask yourself why. We need more residential; a component over which Cordish has very littel control.

Not only residents, but workers and hotels and the plaza and crown center need to go away.

Then Cordish would be able to land anybody!

I think Cordish promised what they couldn't deliver, but they tried and I think they will eventually succeed.

One could argue that St Louis might be a better fit for such a development. They have slightly less residents, but more workers and far more tourism and sporting event activity, more hotels, plus a national attraction (the Arch) and a downtown casino that isn't a tacky joke.

They also don't have 400,000 sq feet of retail 10 blocks away like we do with Crown Center and a million square feet of urban mixed use destination development 35 blocks away like we do with the Plaza. No CWE is nowhere near the size and draw of the Plaza.

Yet they are getting a softball field instead of Ballpark Village. That should tell you a lot.

Hang in there Cordish.

I do recommend building the condo/hotel tower as an apartment/hotel tower though if at all possible.

Don't forget what Coridish has done. We have one of the largest entertainment districts in the midwest that is a huge regional draw that replaced parking lots and abandoned buildings. We have the restored Midland and Mainstreet theaters, one of the nicest urban groceries in the country etc.

The city needs to help Cordish figure out a way to get the residential towers up rather than constantly rip them about their dress codes.

That would be more productive.

aknowledgeableperson · Wed Mar 25, 2009 1:52 pm

KC-wildcat wrote: Because, this retail block will not sit empty forever. Tenants will eventually be ready to expand into this market.

Given your quote of "But, DTKC is what it is. It is an unproven district in a second tier market." what makes you think this retail will actually fill out? And with what type of tenants?

One can second-guess all of the time but maybe, just maybe, Cordish made a mistake in building out this part of the project so early. Instead of working on the retail portion of the development maybe it should have worked to develop the residential portion before retail. As one said, rooftops (or in this case units) are needed to support retail. There are not enough residential to support the retail in this district, especially as GRID says, with Crown Center and the Plaza nearby, and one might throw in Briarcliff Village.

KCPowercat · Post by **KCPowercat** » Wed Mar 25, 2009 2:05 pm

The few rooftops they would have added wasn't going to change the demographics of downtown that much...like a 1% increase maybe??? That isn't going to make or break a deal. Downtown has the rooftops already.

KC-wildcat · Post by **KC-wildcat** » Wed Mar 25, 2009 3:03 pm

aknowledgeableperson wrote: Given your quote of "But, DTKC is what it is. It is an unproven district in a second tier market." what makes you think this retail will actually fill out? And with what type of tenants?

One can second-guess all of the time but maybe, just maybe, Cordish made a mistake in building out this part of the project so early. Instead of working on the retail portion of the development maybe it should have worked to develop the residential portion before retail. As one said, rooftops (or in this case units) are needed to support retail. There are not enough residential to support the retail in this district, especially as GRID says, with Crown Center and the Plaza nearby, and one might throw in Briarcliff Village.

These are good points. In principle, I believe the building retail before the condo towers is putting the cart before the horse. So, yeah, maybe Cordish did make a mistake building out the retail block before building the condo towers.

With that said, I believe that it is a GOOD thing that the infrastructure has been built. It may be vacant, but it is still very valuable and I'm glad it was developed while momentum was heavy. Now, it's just a matter of time. Hundreds of units are coming on line in the Rivermarket, the 1006 Grand units will add several hundred. If Pickwick Bus Terminal moves forward, that will ad several more hundred. The Condo Towers will add hundreds more. If East Village moves forward, that will add units as well. The potential to add 1,000 units to DTKC over the enxt several years is there. It's just a matter of realizing liquidity in the credit markets and enabling people to begin investing in the real estate market again. The 8K first-time home buyer tax credit should help.

My next point is that a better economy will also allow national retail chains to be a bit more risky or aggressive with their expansion plans. And in an unproven market like DTKC, a little bit of risk is necessary. Currently, banks aren't loaning money to anybody unless risk has been erased from the equation. This puts DTKC in a tough spot, FOR THE TIME BEING.

I still believe one or two stores could be sustained in the retail market. I'm not an expert though, so my opinion is close to worthless. Maybe an electronics store? Video Store? Small, boutique home/office furnishing store, i.e. mini Target.

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