Old U.S. Courthouse

[Gretz]

Pickwick is still in motion, but it's a long slog. The developers are trying to gain support for low/moderate tax credits to be awarded to this project, so that they can provide workforce housing (office entry level, retail, service employees).  This is an area that has become increasingly competitive and more political than ever.  Without the credits, it's almost impossible for a housing development to get accomplished in todays financing environment.  Market rate rentals are not going to happen until something significant happens to change the paradigm.

Luckily, we are still in great need of low/mod housing, so if it gets awarded credits, gets built and is reasonably well managed it will succeed.

Thanks for the info.  I suppose that means that they have to throw their name into the pot for 2010 approvals of tax credits and then, if that works, get the financing set up, arrange for construction etc so prob well over a year minimum before anything would actually happen?  And re: the market rental paradigm, it will be interesting to see how the new railyard lofts do in the Rivermarket.  Might that not indicate some depth to higher priced rental market and result in some increased interest in conversion projects to market rental if successfull?  I know new construction is probably stil a ways off for anything that isn't made out of lumber, but would guess some historic building renvations might see a boost if this and other projects stay full?

[loftguy]

Thanks for the info.  I suppose that means that they have to throw their name into the pot for 2010 approvals of tax credits and then, if that works, get the financing set up, arrange for construction etc so prob well over a year minimum before anything would actually happen?  And re: the market rental paradigm, it will be interesting to see how the new railyard lofts do in the Rivermarket.  Might that not indicate some depth to higher priced rental market and result in some increased interest in conversion projects to market rental if successfull?  I know new construction is probably stil a ways off for anything that isn't made out of lumber, but would guess some historic building renvations might see a boost if this and other projects stay full?

You're correct on the path Pickwick will need to traverse if low/mod housing is to be built.  Good luck to them.  It has never been more difficult to make this scenario happen.

You're also right that Market Station performance will be closely watched to gauge rental market viability (fairly,or unfairly, as this is a very specific type of market rate product)

Problem with market rate is that in order to get ANY lender to even consider you, you will need to have 30% plus cash dollars into the project.  If it costs 10 million to either build new or renovate into housing, you've got to have a minimum of $3.3 million in hard dollars to put into the development.  Then you can not expect to be able to access those dollars again (through refinance, etc..) for the forseeable future.  A $10 mil housing development is not really that big (Market Station cost $46 mil) and with the amount of cash now required from the developer, there just aren't going to be that many units of housing developed.  If you are fortunate enough to have that kind of cash, there are a lot of safer, more assured ways to grow and protect your assets.

[zonk]

Nice summation Loftguy....this is generally the issue across all sectors right now:  market rate housing, affordable housing, office, lodging, etc.  On the affordable side, it's not only a challenge getting the LIHTCs, but also syndicating them.  No one is buying.  I know 3-4 developers trying to ditch their project(s) because they can't sell their credit allocation.  This carry's the same for state tax credit programs.  Federal credits are slightly more attractive, but bottom line is these projects are increasingly difficult to accomplish due the lending/credit market.  

[Angel]

The Pickwick developers are closing on one of the parcels (there are 2) the first week of March.  They're trying to decide on whether to apply for the income restricted credit, which would mean several million $$ for them, in addition to the historical credit.  The problem with doing that is they have to wait until September this year to apply for it and they're antsy to get started with construction.  If they end up applying for the income restricted credit, it will have to sit for another year.

They're very excited about the news of the old courthouse going forward as well as the Fed going hotel.  All of this potential activity along Grand and McGee can only help make the area more vibrant.

[trailerkid]

Madison developer helps reshape downtown Kansas City

http://host.madison.com/wsj/business/ar ... 03286.html

^^^ it's going to be done in June? that's awesome. in spite of absentee civic leadership and a very sluggish economy, Downtown KC continues its comeback.

[DaveKCMO]

some exterior work is in progress and i think i recall seeing construction fencing when we drove by today.

[Pork Chop]

Madison developer helps reshape downtown Kansas City

http://host.madison.com/wsj/business/ar ... 03286.html

^^^ it's going to be done in June? that's awesome. in spite of absentee civic leadership and a very sluggish economy, Downtown KC continues its comeback.

I know that they have been working on the inside as well over the past few months. I don?t have the technical term, but over the summer I did see the plastic in the windows when they are removing asbestos or mold or whatever else they use that for. Also, when I have driven by on 8th a few weeks back I saw them working on I-Beams in the basement. You could see where they excavated a hole in the ground and in the basement wall. It looks like that was completed.  Lastly, on the 8th street side you can see new mechanical equipment waiting to be installed.

[smh]

This is probably old news, but here is their website:

http://www.courthousekc.com/

Says coming Spring 2011. We'll see.

[trailerkid]

This is probably old news, but here is their website:

http://www.courthousekc.com/

Says coming Spring 2011. We'll see.

June according to the article posted above at the end of October.

[trailerkid]

There's now listing for this property on Apartments.com as they're now accepting applications:

http://www.courthouse-lofts.com/index.html

[trailerkid]

http://www.apartments.com/rent/Kansas-C ... s/170592.4

[moderne]

Nice and large for those with limited income.

[bobbyhawks]

Nice and large for those with limited income.

I'm all for low income housing, but I still don't understand the thresholds at all.  The richest possible person to qualify, a single person making under 30k, will still be spending ~35% of their after tax dollars on housing.  A lot of people say you shouldn't go that far above 30%.  The nicest one bedroom would run them up to ~43%.  These are great prices for the location, but I still don't see why people who make 31k should not have the same affordable options, or at least options that graduate with income.  Why can't they make the income restrictions dependent upon the asking price for the apartment, as in the $555 1b is only for under 30k, and the $680 is for under 35k, etc.  There seems to be a bit of a gap downtown between some of the income restricted affordable options and the realistic entry-level "affordable" apartments for the type of jobs and talent we want to saturate downtown in.

[pash]

.

[TfromKC]

Anyone know if these are available for lease yet? Also, any updates on how leasing is going at 1006 Grand? That is quite a bit of supply to come online downtown in the last few months. Although, the apartment rental market is very tight, so I'm hoping both these buildings fill up fast!

[smh]

Anyone know if these are available for lease yet? Also, any updates on how leasing is going at 1006 Grand? That is quite a bit of supply to come online downtown in the last few months. Although, the apartment rental market is very tight, so I'm hoping both these buildings fill up fast!

Unfortunately, both buildings are income-restricted which severely limits their potential market.

[FangKC]

If you knew how many people are eligible, and looking for, low-income housing in Kansas City--especially near transit corridors, you wouldn't say that.  Many of them being seniors.

I would say that they will fill up fast--especially since New Quality Hill rental units are no longer available in the low-cost housing mix downtown.

[kboish]

From what I understand there is a huge backlog of demand for this kind of housing DT, which is why there are so many units coming online.  I imagine this will fill up very quickly. 

The building currently being finished in East Village will also be income based, adding 50 more units this fall. 

[smh]

Unfortunately, both buildings are income-restricted which severely limits their potential market.

As usual, Fang is correct. What I really mean is that I think there is a huge demand for new construction market rate rental housing in the downtown area. I've just been slightly upset lately because I have friends who want to move downtown (river to 22nd) and are having trouble finding places that meet their needs and wants. I don't think their desires are over the top, they just aren't really looking to live in a loft. I took my frustration out on the nice, new income-restricted housing units that my friends would DEFINITELY rent, if only they did not make a modest salary that is still over the income guidelines.

[FangKC]

I think there is demand for new market rate apartments in downtown.  The rental market downtown has always been tight and vacancies low--for the most part.

The other thing is that when New Quality Hill went out of the low-income housing mix, and McCormack-Baron sold off the buildings, they also took a lot of rental market-rate apartments out too.  The buyers of the New Quality Hill properties converted many apartments to condos.  Then the real estate market crashed, and there were no buyers. The problem was that those units couldn't be rented again, because the new owners of the properties had gutted the units, and removed all the appliances so people could buy raw units and pick their finishes.  As far as I know, most of those units are sitting empty still.

As far as new market rental properties goes, I think the market for them is certainly there. However, there just aren't a lot of developers out there with the cash to invest in constructing new ones. They can't get credit, and those that do, are waiting for the market to resolve itself.

Look at Cordish and the P&L District.  Those proposed rental apartment buildings didn't get built, and I don't see any plans on the horizon to build them.  I wouldn't be surprised if those residential buildings sit unbuilt for another decade. This, despite the fact that having additional residents living in the P&L District would certainly benefit the retail there.

The other problem is that a lot of investment groups that could finance new apartments just can't right now.  A lot of pension and real estate trusts that used to finance these projects have lost so much of their portfolio's value with the real estate crash, and won't pony up the cash to invest in new product.

In some respects, now is the best time to build new housing downtown because construction costs would most likely be less than they would be normally. I remember that Ron Jury downgraded the cost of building the convention hotel because the recession had reduced the costs of building it.

It's not just downtown. Urban Kansas City has a great need for new modern apartment buildings from the River Market to the Plaza and extending east as well. Older parts of Kansas City have a lot of housing that needs upgrading. Many of the older apartment buildings don't meet modern demands. They don't have central air, bigger closets, dishwashers in the kitchen, or even laundry facilities on site.

New Quality Hill hardly ever had vacancies drop below 95 percent because the apartments had those things downtown, and even had washer/dryers inside the units. And NQH units weren't by any means fancy apartments.