KCRag Forum

KCtoBrooklyn wrote:I thought Epoch bought the KC Club, but on the agenda it says the applicant is MFH Properties, LLC. I believe that was the previous owners, so I guess the sale didn't go through?

KCtoBrooklyn wrote:I thought Epoch bought the KC Club, but on the agenda it says the applicant is MFH Properties, LLC. I believe that was the previous owners, so I guess the sale didn't go through?

Also, the garage and office are to be in the same structure at the NE corner of 13th and Wyandotte. More info here:

http://edckc-meetings.s3.amazonaws.com/ ... 821%29.PDF

Here is what the developer is requesting:

Sales tax exemption on construction materials (STECM) for each of the three Project components;
• 100% reimbursement of sales tax revenues from a 1% Community Improvement District (CID) on
the Hotel Component for 20 years;

• Payment of $250,000 annually (over 25 years, with 5% increases every 5 years) through a parking
agreement with the City of Kansas City (the “City”) which would make parking spaces available to
the public after business hours and on weekends at no cost; and

• Abatement of property taxes (above current predevelopment taxes) generated by the Apartment
and Office/Garage Components for 25 years under the Land Clearance for Redevelopment
Authority (LCRA) (75% abatement in Years 1-10; 37.5% abatement in Years 11-25).

The Project, as presented by the Developer and described above, appears to require public assistance to be financially feasible. The need for assistance appears to be driven by high redevelopment costs associated with the Hotel Component and the relatively low potential revenue generation associated with the Office/Garage component, as compared to the costs of constructing structured parking. It appears that the Apartment Component alone would generate above-market returns, which are effectively subsidizing the other Project components.

In the Base Case Scenario, the Project achieves the low-end of market-appropriate rates of return, signifying that the Project would likely be financially feasible if offered just STECM and CID. However, with additional public assistance, including the LCRA abatement and the City parking agreement, the Project would satisfy other downtown public policy goals without over-incentivizing the Project. The requested LCRA abatement, which is beyond the typical 10-year term offered through the LCRA, would result in the reservation of 10% of units in the Apartment Component for households earning 80% or less of area median income over the term of the property tax abatement. The 25-year parking agreement would allow for public use of the parking garage on weekday nights and weekends at no cost to users.

With the full amount of assistance, the Project, as presented by the Developer would achieve the midpoint
of stabilized yield on cost and unleveraged return benchmarks identified through SB Friedman’s
experience and recent Kansas City projects that have moved forward with construction, signifying that
even with the additional assistance, the Project would achieve market-appropriate rates of return. The
resulting assistance package would amount to approximately 10% of total development costs, or $9.5
million (discounted to 2018 at 7%).

TheLastGentleman wrote:I'm glad the muehlebach is getting renovated, but I would have liked to see it return to being a hotel. Seems odd.

TheLastGentleman wrote:And one of the city's most storied hotels too! Lots of famous people stayed there. Seems like that would be a perfect selling point for a new hotel

flyingember wrote:

TheLastGentleman wrote:And one of the city's most storied hotels too! Lots of famous people stayed there. Seems like that would be a perfect selling point for a new hotel

They're planning on converting the original Kansas City Club building. I bet it has had way more famous people visit it.

moderne wrote:Isn't the Marriott still using the Muehlebach convention center facilities just south of the old hotel? What will happen to that or will connectivity be maintained through the apartment conversion?

GRID wrote:The old Muehlebach is in bad shape and they are doing more affordable apartments there while the KC Club building is in much better shape. I think it just comes down to numbers. This is a pretty cool project. I wonder if the four floors of office will be on top of a garage or if the four floors includes the garage. It would be nice if they could bump up the office space to 200k or so.

The Developer is assuming hard construction costs of approximately $26,200 per space for the
garage component. This assumption appears to be slightly above the benchmark range of
$20,000-24,000 per space for above-ground structured parking in Kansas City. The Developer
indicated two factors are driving the somewhat higher parking: 1) the proposed parking garage is
less efficient than a typical garage due to the relatively small size of the site, and 2) the parking
garage costs include foundational work that supports the vertical office development.