Plaza move-ins (ongoing)

[langosta]

I would imagine the bankruptcy court would decide that.

It’s not bankruptcy though. It would be foreclosure, lender would take possession.

[beautyfromashes]

I would imagine the bankruptcy court would decide that.

It’s not bankruptcy though. It would be foreclosure, lender would take possession.

I would imagine a foreclosure of that size would affect their solvency. They’ll seek protection of their assets in court. Will get worse for the Plaza before it gets better as this could take awhile and no money will be going to upkeep and new leases will be affected. Taxes will be deferred. Doubtful Plaza would be sold in pieces. Best scenario is quality developer gets for pennys on the dollar and puts good amount of money into it.

[Highlander]

I would imagine the bankruptcy court would decide that.

It’s not bankruptcy though. It would be foreclosure, lender would take possession.

I would imagine a foreclosure of that size would affect their solvency. They’ll seek protection of their assets in court. Will get worse for the Plaza before it gets better as this could take awhile and no money will be going to upkeep and new leases will be affected. Taxes will be deferred. Doubtful Plaza would be sold in pieces. Best scenario is quality developer gets for pennys on the dollar and puts good amount of money into it.

The combined assets of the two plaza owners is over 13.5 billion so not sure how badly defaulting on a $300 million loan would impact either company in terms of solvency. If they cannot work a deal for the debt, my guess is that both or maybe just one of them would look for another buyer.

[empires228]

Alright, here we go! One step closer to new ownership:

Plaza owners default on $300M loan in new sign of distress
https://www.kansascity.com/news/busines ... 47049.html

That's my biggest fear, that even with the right ideas and city support in hand, the Plaza's owners aren't in financial condition to actually execute anything substantial. So it will limp along or slowly decline until it is put up on a block for a bankruptcy auction. I also struggle to think of who the right owner would be. Someone like PN Hoffman would be great but I don't think they operate outside the east coast.

This is actually my biggest hope! If I were the mayor and city, I would be careful not to put any money behind the current ownership. I think it would be totally lost. Let the bankruptcy, or pre-bankruptcy sale happen. Let the buyer get a good deal with some money to put behind it and the Plaza will rebound. It will continue to flounder until that happens.

My big question is will it attract any attention, or will this end up in one or the notorious mall slumlords like Kohan or Namdar who have been picking up malls more successful than the Plaza from Westfield and JLL.

[beautyfromashes]

My big question is will it attract any attention, or will this end up in one or the notorious mall slumlords like Kohan or Namdar who have been picking up malls more successful than the Plaza from Westfield and JLL.

I don’t really know which direction it will go, but you’d have to think a mall buyer would be turned off seeing it be a failure for the current owner and stay clear, at least at a similar price. Either it sells cheap to one you mentioned who think they can do it better or it sells to a higher-end buyer who sees it as a premium product that can be revived with a different strategy. I think we all would see it as being run in a poor way with the current owners hurting the brand. But, there’s enough brand value there that it could be revived with better local concepts, nightlife activity, residential opportunity and better connection to downtown growth. Hoping for good things.

[Metro]

Is there any financial instruments the city could possibly use in collaboration with new ownership that would lower rent to encourage local business which likely means some financial losses for the owners? It seems as though local business could help bring back some of the plaza mystique and attract more business back to the plaza.

[beautyfromashes]

Is there any financial instruments the city could possibly use in collaboration with new ownership that would lower rent to encourage local business which likely means some financial losses for the owners? It seems as though local business could help bring back some of the plaza mystique and attract more business back to the plaza.

The cost of the real estate asset probably determines what rents are required to meet the financial obligation. I'd assume that if it sold for less than what the previous owners paid for it, it would facilitate the new owners being able to rent spaces for less money and build a local presence again on the Plaza. Basically, the old owners paid too much and were trying to get overvalued rents to meet that expense and took whoever would pay the rent. They really didn't care about the status of the retailer/office and it affected the product.

[im2kull]

Another shooting on the plaza. Same as usual. 15 year old shot a 13 year old. Second shooting on the plaza in a week.

[dukuboy1]

Let me guess they were not there to shop or dine

[MidtownCat]

Alright, here we go! One step closer to new ownership:

Plaza owners default on $300M loan in new sign of distress
https://www.kansascity.com/news/busines ... 47049.html

That's my biggest fear, that even with the right ideas and city support in hand, the Plaza's owners aren't in financial condition to actually execute anything substantial. So it will limp along or slowly decline until it is put up on a block for a bankruptcy auction. I also struggle to think of who the right owner would be. Someone like PN Hoffman would be great but I don't think they operate outside the east coast.

This is actually my biggest hope! If I were the mayor and city, I would be careful not to put any money behind the current ownership. I think it would be totally lost. Let the bankruptcy, or pre-bankruptcy sale happen. Let the buyer get a good deal with some money to put behind it and the Plaza will rebound. It will continue to flounder until that happens.

Good God.

[GRID]

Isn't like every shopping center in the country in default right now or has recently gone through restructuring their debt?

This country is so over retailed.

I don't think any retailer is going to invest a lot of money into the Plaza. It's going to take the city getting very involved and it's going to take a lot of public money to properly redo the plaza. Nobody is going to spend that kind of private money needed there, especially since there is now a long track record of class A luxury tenants leaving the plaza and it is leased with just normal tenants found in any suburban mall or lifestyle center.

The city needs to get involved and come up with a real plan to make major changes to the area and the damn save the plaza people need to go away.

Everybody here knows what needs to be done. Build up the core of the plaza with higher density residential, bring back entertainment and restaurants.

Get rid of cars. But you can't just close the streets with the current tenants. Lots of things need to change. It's going to take a total rethink of what the plaza should be for it to work, but how do you do that when it's all privately owned?

Despite all the great efforts by people to pedestrianize the plaza, I have a feeling the plaza will look just like it does today in 10-15 years. Hopefully they have built something on the former theater lot by then though.

[beautyfromashes]

The city needs to get involved and come up with a real plan to make major changes to the area and the damn save the plaza people need to go away.

What exactly do you want the city to get involved with? Sure, they can pedestrianize some roads and give incentives for residential but they can’t really influence direction all that much…and I really wouldn’t want them to. There are definitely buyers for the Plaza and they would likely do what you’re thinking. Let the market process work out.

[smh]

Isn't like every shopping center in the country in default right now or has recently gone through restructuring their debt?

This country is so over retailed.

I don't think any retailer is going to invest a lot of money into the Plaza. It's going to take the city getting very involved and it's going to take a lot of public money to properly redo the plaza. Nobody is going to spend that kind of private money needed there, especially since there is now a long track record of class A luxury tenants leaving the plaza and it is leased with just normal tenants found in any suburban mall or lifestyle center.

The city needs to get involved and come up with a real plan to make major changes to the area and the damn save the plaza people need to go away.

Everybody here knows what needs to be done. Build up the core of the plaza with higher density residential, bring back entertainment and restaurants.

Get rid of cars. But you can't just close the streets with the current tenants. Lots of things need to change. It's going to take a total rethink of what the plaza should be for it to work, but how do you do that when it's all privately owned?

Despite all the great efforts by people to pedestrianize the plaza, I have a feeling the plaza will look just like it does today in 10-15 years. Hopefully they have built something on the former theater lot by then though.

Hear hear.

[GRID]

The city needs to get involved and come up with a real plan to make major changes to the area and the damn save the plaza people need to go away.

What exactly do you want the city to get involved with? Sure, they can pedestrianize some roads and give incentives for residential but they can’t really influence direction all that much…and I really wouldn’t want them to. There are definitely buyers for the Plaza and they would likely do what you’re thinking. Let the market process work out.

I guess they need to find an actual developer to buy the plaza and not a company that mostly focuses on leasing retail. I just wonder what would be in it for such a developer unless they have the ability to actually add some major density to the plaza? That's where the city would come in. Allow air rights above the existing plaza and make it known to any developer that they won't have to fight tooth and nail against the city and save the plaza people etc every time they propose to build something. The city could also possibly contribute some to the rebuilding of the streets where needed.

The plaza is a lucrative site for development if it were actually allowed to happen. Residential could be built in many places in the core of the plaza while not having to build much, if any, additional structured parking. That means it's potentially a very profitable place to invest and build apartments and repurpose retail space, but only if the city/residents allowed such development/change to happen.

[beautyfromashes]

I guess they need to find an actual developer to buy the plaza and not a company that mostly focuses on leasing retail. I just wonder what would be in it for such a developer unless they have the ability to actually add some major density to the plaza? That's where the city would come in. Allow air rights above the existing plaza and make it known to any developer that they won't have to fight tooth and nail against the city and save the plaza people etc every time they propose to build something. The city could also possibly contribute some to the rebuilding of the streets where needed.

I can’t imagine any buyer of the Plaza wanting it for strictly retail like the current owners. They’ve proven that wouldn’t be viable. The new buyer would likely have the plan of mixed use just to spread the risk to different types of use and build their own market.

[moderne]

When the JC Nichols Co developed and owned the Plaza it was a mixed use development; Nichols owned a lot of the surrounding residential buildings. Too bad the residential was split off.
There is plenty of density on the Plaza. From the center of the Plaza it is only 2 blocks north or south to residential. The problem is the over valuation that leads to too high rents and lack of local and everday shops and services. Similar problem DT. This should be a neighborhood for the residents, not a Rodeo Drive wannabe.

[GRID]

When the JC Nichols Co developed and owned the Plaza it was a mixed use development; Nichols owned a lot of the surrounding residential buildings. Too bad the residential was split off.
There is plenty of density on the Plaza. From the center of the Plaza it is only 2 blocks north or south to residential. The problem is the over valuation that leads to too high rents and lack of local and everday shops and services. Similar problem DT. This should be a neighborhood for the residents, not a Rodeo Drive wannabe.

I understand that. But the existing retail layout and existing leases need to be changed around to make the plaza a more walkable retail district and there needs to be infill.

This spot for example. That starbucks is basically a suburban stand alone corner lot starbucks. I'm surprised it doesn't have a drive through.

https://www.google.com/maps/place/Count ... ?entry=ttu

The parking lot behind it should be developed. All the driveway cuts needs to go away and the gaps filled with something other than driveways.

I agree, the plaza will never be a luxury retail destination again, but I think that's all companies see with the area. The high rents, the history etc but the demographics of KC don't support it. The plaza has like three Ralley houses in it. Speaking of that, an urban target would be better than that Ralley house in the old Halls Building.

[moderne]

Starbucks should not be there. For decades that was a locally owned charming German cafe---Emile's. Plaza was best when it was a combo of some high end, lots of local, some neighborhood. Target could be the equivalent of what Sears was half a century ago on the Plaza.

[shinatoo]

When the JC Nichols Co developed and owned the Plaza it was a mixed use development; Nichols owned a lot of the surrounding residential buildings. Too bad the residential was split off.
There is plenty of density on the Plaza. From the center of the Plaza it is only 2 blocks north or south to residential. The problem is the over valuation that leads to too high rents and lack of local and everday shops and services. Similar problem DT. This should be a neighborhood for the residents, not a Rodeo Drive wannabe.

I understand that. But the existing retail layout and existing leases need to be changed around to make the plaza a more walkable retail district and there needs to be infill.

This spot for example. That starbucks is basically a suburban stand alone corner lot starbucks. I'm surprised it doesn't have a drive through.

https://www.google.com/maps/place/Count ... ?entry=ttu

The parking lot behind it should be developed. All the driveway cuts needs to go away and the gaps filled with something other than driveways.

I agree, the plaza will never be a luxury retail destination again, but I think that's all companies see with the area. The high rents, the history etc but the demographics of KC don't support it. The plaza has like three Ralley houses in it. Speaking of that, an urban target would be better than that Ralley house in the old Halls Building.

Hasn't been a Starbucks for two years.

[GRID]

When the JC Nichols Co developed and owned the Plaza it was a mixed use development; Nichols owned a lot of the surrounding residential buildings. Too bad the residential was split off.
There is plenty of density on the Plaza. From the center of the Plaza it is only 2 blocks north or south to residential. The problem is the over valuation that leads to too high rents and lack of local and everday shops and services. Similar problem DT. This should be a neighborhood for the residents, not a Rodeo Drive wannabe.

I understand that. But the existing retail layout and existing leases need to be changed around to make the plaza a more walkable retail district and there needs to be infill.

This spot for example. That starbucks is basically a suburban stand alone corner lot starbucks. I'm surprised it doesn't have a drive through.

https://www.google.com/maps/place/Count ... ?entry=ttu

The parking lot behind it should be developed. All the driveway cuts needs to go away and the gaps filled with something other than driveways.

I agree, the plaza will never be a luxury retail destination again, but I think that's all companies see with the area. The high rents, the history etc but the demographics of KC don't support it. The plaza has like three Ralley houses in it. Speaking of that, an urban target would be better than that Ralley house in the old Halls Building.

Hasn't been a Starbucks for two years.

So it's an empty building on the corner with driveways on both sides an a surface lot behind it. What's your point?