Hotel Bravo- 17th and Wyandotte

[normalthings]

Hotel Bravo has to build at the cost and finish level of a 5 star hotel in Nashville but with a 91% difference in room rates.

[GRID]

Holy crap. I knew they were asking for incentives but had no idea they need this much to make this project work. If it truly takes this much in incentives to get this hotel built, then it's no wonder there are not many tower cranes in KC. I mean the hotel doesn't even need structured parking.

Here are the details from the KCBJ:

https://www.bizjournals.com/kansascity/ ... u3vUfhczKM

13 story with 143 rooms (this seems like a really small hotel for all the hype it's getting)

63.5 million dollar hotel with 46.6 million in public financing. So only 17 million of a 64 million dollar hotel is coming from the developers? And this is a better plan than the first one where they requested 51 million in incentives. Damn.

$17.1 million in TIF, including 75% of the future real property tax increment and 50% of economic activity taxes (EATs); $27.2 million in Super TIF, capturing the other 50% of the EATs; and $2.3 million in community improvement district sales tax revenue.
Hotel Bravo contemplates other incentives, too, including a sales tax exemption on construction materials and a 50% abatement on personal property taxes.

I don't know. I'm a pushover to see any sort of development in KC and if I were in the city council, I would probably rubber stamp anything, but I'm really surprised at these numbers. They really don't look great for a lot of future development in KC, especially with city hall making it even harder (low income housing requirements etc). As much as I love to see buildings go up. Nearly 50 million in public assistance for 143 rooms?

Again. I guess all the more reason to do it and get it done. Or nothing is going to get built. That parking lot is not generating much revenue. But this is alarming honestly if you want to see new office and hotels go up downtown without absolutely massive incentive packages.

[normalthings]

Holy crap. I knew they were asking for incentives but had no idea they need this much to make this project work. If it truly takes this much in incentives to get this hotel built, then it's no wonder there are not many tower cranes in KC. I mean the hotel doesn't even need structured parking.

Here are the details from the KCBJ:

https://www.bizjournals.com/kansascity/ ... u3vUfhczKM

13 story with 143 rooms (this seems like a really small hotel for all the hype it's getting)

63.5 million dollar hotel with 46.6 million in public financing. So only 17 million of a 64 million dollar hotel is coming from the developers? And this is a better plan than the first one where they requested 51 million in incentives. Damn.

$17.1 million in TIF, including 75% of the future real property tax increment and 50% of economic activity taxes (EATs); $27.2 million in Super TIF, capturing the other 50% of the EATs; and $2.3 million in community improvement district sales tax revenue.
Hotel Bravo contemplates other incentives, too, including a sales tax exemption on construction materials and a 50% abatement on personal property taxes.

I don't know. I'm a pushover to see any sort of development in KC and if I were in the city council, I would probably rubber stamp anything, but I'm really surprised at these numbers. They really don't look great for a lot of future development in KC, especially with city hall making it even harder (low income housing requirements etc). As much as I love to see buildings go up. Nearly 50 million in public assistance for 143 rooms?

Again. I guess all the more reason to do it and get it done. Or nothing is going to get built. That parking lot is not generating much revenue. But this is alarming honestly if you want to see new office and hotels go up downtown without absolutely massive incentive packages.

1. Hotel Bravo construction cost likely around 70-80 million now
2. A major struggle is that construction costs are approaching those of other major markets but rents are a fraction. Hotel Bravo has to be built to similar quality as 5 star hotels in other cities but will command a fraction of the room rates. Their slide about Nashville I think was one of their better arguements. A upper upscale hotel in Nashville can charge 91% more than comparable KC product.

On the residential side: I spoke with a developer this week who sees 15% higher rents in STL for comparable products. We need to attract and grow more high income house holds that can support these projects. When every mid and high rise development's pitch to investors is "this is a long term investment" you know that there is something wrong with achievable rents.

[GRID]

^ I don't understand Nashville either for all the opposite reasons. 30 story hotels go up there like weeds and they don't seem to have any impact. More just keep getting proposed and built. I doubt most developments there gets any incentives.

I know Nashville is the exception to the rule, especially for an inland city, but what is happening there is just insane. That city might look like Atlanta in another 30 years. Not that that is a good thing, but it just amazes me how a sleepy town like that can just take off like they did.

I guess my point is that I'm not sure Nashville is even a fair comparison now. They are in a totally different league as far as tourism, high end urban development (including office space) and growth.

[normalthings]

^ I don't understand Nashville either for all the opposite reasons. 30 story hotels go up there like weeds and they don't seem to have any impact. More just keep getting proposed and built.

I know Nashville is the exception to the rule, especially for an inland city, but what is happening there is just insane. That city might look like Atlanta in another 30 years. Not that that is a good thing, but it just amazes me how a sleepy town like that can just take off like they did.

Nashville was a sleepy backwater that redeveloped their dead downtown into one of the hottest tourism districts in America. They got their act together and blew away from their state competitor. What differentiates us from them is (1) top tier research university and (2) they developed a vision in the late 80s/90s and haven't let off the gas pedal since.

I think that there was a clear path for us to get on a Nashville like track by 2030 if Lucas had not won. Letting off the gas pedal is killing momentum in every area and there isn't really any clear leadership or vision to get us there now.

[GRID]

I don't think Nashville will ever have a good transit system. They will probably eventually build 30-50 miles of light rail, but like Atlanta, Charlotte etc, it will have little impact and very few will use it. I don't think that will stop Nashville from becoming a mega city of the south though. The momentum there is just too much.

Honestly, still not a fan of Nashville. KC has way more character and is just a more interesting city. But Nashville is like a real life CitiesSkylines game somebody is playing.

So how does KC get rents up? I still say a major problem is a lack of high paying downtown corporate white collar jobs. That is hurting KC in so many ways. The migration of jobs to JoCo (and KC loosing so many companies to mergers) will haunt KCMO for a lot longer than people think.

[GRID]

^ I don't understand Nashville either for all the opposite reasons. 30 story hotels go up there like weeds and they don't seem to have any impact. More just keep getting proposed and built.

I know Nashville is the exception to the rule, especially for an inland city, but what is happening there is just insane. That city might look like Atlanta in another 30 years. Not that that is a good thing, but it just amazes me how a sleepy town like that can just take off like they did.

Nashville was a sleepy backwater that redeveloped their dead downtown into one of the hottest tourism districts in America. They got their act together and blew away from their state competitor. What differentiates us from them is (1) top tier research university and (2) they developed a vision in the late 80s/90s and haven't let off the gas pedal since.

I think that there was a clear path for us to get on a Nashville like track by 2030 if Lucas had not won. Letting off the gas pedal is killing momentum in every area and there isn't really any clear leadership or vision to get us there now.

This is VERY true actually. Nashville had just opened their arena a few years prior to KC voting to build Sprint. That was really the first thing they really did. But they JUST DID NOT STOP after that. That city wanted to do great things with downtown and they made it happen. Downtown Nashville was just as bad as KC's in the 80's and 90's.

[GRID]

And not just Lucus. Right after Sprint and P&L came online, the city elected Funkhouser too. You can't overcome stuff like that. That's more than four years of lost development, that's also the lost spin off development that would have only occurred if other development had happened.

Gotta have a mayor and council with a vested interest in downtown. KC has not really had that since Barnes. James to a degree, but not really.

Sprint Center, P&L District etc would not have happened under James I don't think. He got the hotel and kci, but back when Barnes was mayor nobody wanted anything to do with downtown. That was a battle to get Sprint built.

[AlkaliAxel]

^And James was mayor when we got streetcar, which is something Nashville doesn't have anything like.

[KCPowercat]

So a lot of "Nashville" in this thread so let's levelset versus just crane watching. Them catching up to KC doesn't mean they are in a different league. They are very much in the same convention category. They obviously get a lot more transient vacationers. As an actual downtown resident, their downtown has zero appeal and would be very annoying if we tried to turn into that.

- KC overnight guests 12M, Nashville 16M
- KC downtown residents 27,000, Nashville 12,500

https://ctycms.com/tn-nashville/docs/07 ... report.pdf
https://www.flatlandkc.org/news-issues/ ... s-results/

[flyingember]

Nashville has 42,000 hotel rooms in 14 counties
Kansas City has 34,000 hotel rooms in the metro

So Nashville has 25% more rooms but 33% more overnight guests. So something has them hitting above KC relative to size.

[KCPowercat]

It's tourist driven. Pretty well known and stated here many times.

[Link2]

It's tourist driven. Pretty well known and stated here many times.

The main purpose of visiting Nasvhille is actually pretty evenly split -- 44% leisure / 41% meetings/conventions -- according to their 2019 study. Part of that 41% figure is also due to the overall destination appeal; which draws additional visitors who may not attend the event in a typical year, but choose to due to its location. Not quite at the same level, but similar to what you see with that segment in certain other Tier 1 meetings destinations such as Vegas, Orlando, etc.

[earthling]

Here's a recent hotel market report for Nashville...
https://www.ngkf.com/storage-nmrk/uploa ... lle-TN.pdf

KC...
https://www.nmrk.com/storage-nmrk/uploa ... s-City.pdf

[KCPowercat]

They are not Tier 1.

[Link2]

They are not Tier 1.

Certainly not here to debate that. But Nashville absolutely is a first-tier U.S. meetings destination by almost every metric.

[KCPowercat]

okay. Moving on.

[KCPowercat]

My other thought with this whole discussion in this thread about worrying about 5 star hotels and raising rents is we have a real affordable housing problem in KC and raising rents so we can build shiny new towers probably isn't our main problem right now.

Again way out of scope of this discussion of this dumb small hotel that keeps getting oxygen for some reason.

[Critical_Mass]

My other thought with this whole discussion in this thread about worrying about 5 star hotels and raising rents is we have a real affordable housing problem in KC and raising rents so we can build shiny new towers probably isn't our main problem right now.

Again way out of scope of this discussion of this dumb small hotel that keeps getting oxygen for some reason.

I still do not believe KC is anywhere near to having an affordable housing problem. There are many many areas inside the metro with very affordable housing, they may just not be the absolute most desirable part of town. I can't afford to have a ribeye steak for lunch every day, but that doesn't mean we have an affordable meal problem in KC.

[KCPowercat]

This thread just seemed a little tone deaf with a lot of people just wanting to incentivize whatever to get new buildings and how we "need to raise rent".