Katz on Main

[dukuboy1]

Yeah the people acting like this building wont be redeveloped crack me up.

It won't be. It will be torn down for a fraction of the cost. You must be super young and naïve to think otherwise.

In the big picture, this is a fantastic location that will happen one way or other, just might take longer.

The point is that the historic Katz building will be getting torn down now, as no developer in their right mind will jump through endless hoops just to save, at a higher cost, a historic building that's unprotected. They'll simply demo it and build something cheaper, less unique, and less appealing with a similar amount of tax credits. The city gains nothing by refusing incentives to this project, when they'll ultimately be issuing incentives to another project further down the line.

Instead, we lose a great opportunity to save a historic building AND infuse TONS of energy into a blighted block.

Let's hope at minimum they can keep the iconic "Katz" art-deco clock tower element. Even if they reproduce it, that would be at least a nice nod to what was there. Incorporating the art deco into the design of whatever they put up when they tear it down would also be cool. Perhaps the neighborhood could require such standards

[FangKC]

I'm thinking like a developer right now. The thing that would make me the most money per sq. foot would be simply to knock down the Katz building, and put in the extra apartments on that space. I might forego incentives to avoid City hassles, and just build a larger building to spread the development cost of the parcel across more units. I would put in a garage, but not offer public parking or include any affordable housing. It's my dime, and I'm not taking City incentives, so I'm not including cheaper apartments or saving a historic building. That's not my business model. I'm not including any art deco elements. I'm putting up a straight-up stucco clad stick building over maybe two floors of concrete and steel.

The site would support a larger building seeing that the Netherland Hotel down the street is 10-stories.

I might try to also buy 2 W. 40th Street to the south, and knock it down too, to create a larger project with even more apartments.

https://www.google.com/maps/place/2+W+4 ... 94.5865861

If the City won't give me a building permit for my proposed project unless I add affordable housing, I will probably take my experience and capital and develop in Overland Park.

[beautyfromashes]

A developer would make a big deal walking out the door (which they did), come back in six months when nothing has happened with the building by issuing a vague statement, wait six more months and hit the church up to drop their sale price and get the council to beg them back for a similar project. They haven’t even started playing politics yet.

[DaveKCMO]

Everyone seems to be forgetting the current owner is still Redeemer (unless parcel viewer is wrong). I'm pretty sure they won't sell to someone who plans to knock it down. I seem to recall they made a pretty big deal out of their selection process.

[FangKC]

Once someone takes possession of the property, any previous promises are worthless, unless: Redeemer places some sort of preservation easement or covenant on the property deed for the Katz building. It doesn't have to be on the parking lot, or even an addition, so that part can be redeveloped.

Redeemer must be willing to accept less money for the property if they do this, since it will reduce redevelopment potential. If the property was owned by a private party, and not a church, they could get certain tax benefits by doing this. A church wouldn't get those, so they would likely be reducing the value of the property should they make that choice.

Of course, a wealthy benefactor could buy the property from Redeemer simply for the purpose of placing the preservation easement on the building, and taking the tax benefit. Then they could sell the property to a developer who will them accept that the Katz building has to be preserved if they redevelop the remaining part of the property.

Preservation easements can be made specific to preserve the entire building "as is," or preserve things like the facade, or the interior, or even a specific room inside. This specificity might allow for the interior retail space to be subdivided into smaller retail stores, or allow modifications to the less historic or significant parts of the building. For example, I believe there was an addition made to the west of the original building. The easement might allow modifications to that part of the structure, or even its' demolition.

https://www.google.com/maps/place/West ... 94.5861762

What is a preservation covenant?

A historic preservation easement is a voluntary legal agreement, typically in the form of a deed, which permanently protects a significant historic property. Since it is a perpetual easement, an owner is assured that the property’s historic character will be preserved. In addition, an owner who donates an historic preservation easement may be eligible for one or more forms of tax benefits. Under the terms of a typical preservation easement, a property owner places restrictions on the development of, or changes to, the property and transfers these restrictions to a qualified organization whose mission includes environmental protection, land conservation, open space preservation, or historic preservation. The organization must have the resources to manage and enforce the restrictions provided for in the easement and have a commitment to do so. Once recorded, the easement restrictions become part of the property’s chain of title and “run with the land” in perpetuity, thus binding not only the owner who grants the easement but all future owners as well. Preservation easements in some states may also be called preservation “restrictions,” “covenants,” or “equitable servitudes."

https://www.nps.gov/tps/tax-incentives/ ... erties.pdf

I wish more wealthy people, or non-profit groups, would do this to save buildings before they become imperiled. There are several buildings along the streetcar line I'd buy, and do this, if I had abundant wealth. Even if just for the tax write-offs.

[tskev]

This is all correct. I heard from someone on the Redeemer board that they had offers for 20% more on the property but didn't take them because they involved demo-ing the building. At some point, I imagine they probably just sell the building to the highest bidder instead of holding on to it forever.

[earthling]

The developer simply should've offered broader public amenities within project instead of turning a local iconic building into a private luxury-leaning island with not enough public benefit. They apparently didn't play the local politics right either. Hopefully a developer comes along (MAC reach out further?) that will save building and include appropriate affordable mix to get incentives. A possible negotiation point might be reducing the affordable % in exchange for extra cost involved with saving building.

Has Redeemer courted MAC? Ideally the two would work together with City to negotiate a workable plan that balances public benefit and appropriate affordable % with cost to save building.

[flyingember]

The developer simply should've offered broader public amenities within project

Like what?

[Anthony_Hugo98]

The developer simply should've offered broader public amenities within project

Like what?

Is publicly accessible commercial space no longer considered a publicly accessible amenity?

[earthling]

^Not a justification for incentives. Incentives for luxury leaning buildings a bit over the top when streetcar line itself will help propel the area. Affordable housing would qualify but perhaps lower % can be negotiated to help offset cost of saving building. Public swimming pools, libraries are examples, something along those lines. If asking incentives for garage, then a % of spots for public use. Is surprising many here think incentives for luxury leaning buildings are still perfectly fine just because it has a couple retail spots. Some cities like Seattle have required retail space in new projects in some districts with no incentives.

[Chris Stritzel]

The developer simply should've offered broader public amenities within project

Like what?

Is publicly accessible commercial space no longer considered a publicly accessible amenity?

Might as well just make everything in the building publicly accessible at this point. Johnny Appleseed is in town and needs a place to stay tonight? Head on over to John Q's apartment in a building that received incentives and just walk in and make yourself right at home. Want to go to a pool because you don't have one at your house? I heard the incentivized apartment building, that we don't pay rent at and have no business being at, has a pool. Let's go there and use it.

It's a ridiculous argument to make about needing broader public amenities when the best public amenities are activated and upgraded sidewalks, formerly vacant building renovated to include new retail/restaurant spaces (and in the former case of Katz, a new apartment building), and even security cameras to keep watch over the public space.

^Not a justification for incentives. Incentives for luxury leaning buildings a bit over the top along streetcar line at this point. Affordable housing would qualify but perhaps lower % can be negotiated. Public swimming pools, libraries are examples, something along those lines. If asking incentives for garage, then a % of spots for public use. Is surprising many here think incentives for luxury leaning buildings are still perfectly fine just because it has a couple retail spots. Some cities like Seattle have required retail space in new projects in some districts with no incentives.

I agree that parking can be a public amenity and I believe that retail spaces are a public amenity as-is (as long as they're filled). Anything beyond those two things though are ludicrous to expect. It's private property and even if a project got a tax abatement from the City it shouldn't mean requesting a bunch of things that no longer make the project financially viable.

Moving on, affordable housing in new-build projects makes zero sense. You're spending the same amount of money to build a building that you normally would but, for 20% of the units or so, you would have to fetch lower rents than you expected to to make the project work. I agree that negotiation for this type of stuff should be on the table, but the requirement was stupid from the get-go and would be used as a tool to kill projects people don't like or shun developers out of the market who would ask for incentives.

There are a few developers here in St. Louis that looked at building in Kansas City. When the affordable housing requirement for incentives came into the play, they threw their plans on the shelf. LuxLiving is the only one of the four to actually be pursuing projects in Kansas City and the Katz ordeal shook them badly. The other three developers are more recent entries into the development world, so they don't have the capability to do project without incentives yet or have the capability to do a project with affordable housing.

And finally, when even Mayor Lucas, who pushed for the affordable housing ordinance, pushed back against the amendment that ultimately killed the Katz project and agreed with Kathryn Shields' points, you know you screwed up.

[earthling]

Might as well just make everything in the building publicly accessible at this point.

Only a portion if requesting incentives but an entire public use project would work fine for this building too if someone wealthy would step up.

This might come across as a shock but it is possible to build market rate units without incentives, especially along something as highly desirable as all amenities along streetcar. Any reasonably functional area can build market rate w/out incentives elsewhere.

KC needs to transition away from wide open incentives. You are saying that developers won't build at all unless there are incentives they like. That's a problem if KC can still only get things done unless there are extra incentives. In areas that need a boost sure, but the streetcar line is in itself the boost needed for that stretch. Piling on incentives just to get things done is a terrible precedent to set. Actually it's a bad habit already established that needs more scrutiny and now that's in play. Let the market play out w/out incentives except in areas/situations that truly need the boost. Should incentives be used to save the Plaza church for an otherwise private project?

[beautyfromashes]

This is all correct. I heard from someone on the Redeemer board that they had offers for 20% more on the property but didn't take them because they involved demo-ing the building. At some point, I imagine they probably just sell the building to the highest bidder instead of holding on to it forever.

But doesn't this make the case against the level of incentive? If they were claiming needing the incentives mostly to redo the Katz portion instead of demolition, but they also got a 20% discount from Redeemer because they are developing the Katz portion doesn't it seem like a double dip and less incentives were justified?

[normalthings]

This is all correct. I heard from someone on the Redeemer board that they had offers for 20% more on the property but didn't take them because they involved demo-ing the building. At some point, I imagine they probably just sell the building to the highest bidder instead of holding on to it forever.

But doesn't this make the case against the level of incentive? If they were claiming needing the incentives mostly to redo the Katz portion instead of demolition, but they also got a 20% discount from Redeemer because they are developing the Katz portion doesn't it seem like a double dip and less incentives were justified?

No? The new apartments portion was functionally also going to help subsidize the renvoation. The incentives, at any length of time, would only cover part of the cost to renovate the Katz.

[beautyfromashes]

No? The new apartments portion was functionally also going to help subsidize the renvoation. The incentives, at any length of time, would only cover part of the cost to renovate the Katz.

So, I'm sure the present value of the 20% discount on the whole property is much lower than the tax discount being sought (was it 33% for 10 years?) but it seems it would give them money to more significantly discount their incentive request. They basically were buying at below market value and i wish they would have fought harder to keep the deal. They still might. I kind of have a feeling this one is just going to sit for a bit and then get picked up quickly. Probably another developer showing interest would force the hand of the current buyer to get the deal done and not waste all the significant design and political time they've invented.

[kas1]

This might come across as a shock but it is possible to build market rate units without incentives

Well, that depends entirely on what the market rate is for the neighborhood in question. Nobody was lining up to build new apartments in this area even before the anti-incentive craze. Affordable housing advocates aren't going to like what happens when they force developers to wait for supply and demand to drive up rents high enough to make these projects workable without incentives. There appears to be no coherent strategy in play. Just a lot of posturing and pandering.

[earthling]

^The streetcar will more likely drive development along this stretch of Midtown w/out incentives than this one project with incentives. If streetcar wasn't in the picture, incentives for this project makes more sense as there hasn't been much forward momentum in area. The streetcar is the new momentum.

[TheLastGentleman]

Might as well just make everything in the building publicly accessible at this point. Johnny Appleseed is in town and needs a place to stay tonight? Head on over to John Q's apartment in a building that received incentives and just walk in and make yourself right at home. Want to go to a pool because you don't have one at your house? I heard the incentivized apartment building, that we don't pay rent at and have no business being at, has a pool. Let's go there and use it.

It's a ridiculous argument to make about needing broader public amenities when the best public amenities are activated and upgraded sidewalks, formerly vacant building renovated to include new retail/restaurant spaces (and in the former case of Katz, a new apartment building), and even security cameras to keep watch over the public space.

There are a lot more ways a project can interact with the public besides the bare minimum of streetscaping, or letting people into your living room(???)

With Katz, for instance, why not make the drugstore rooftop publicly accessible, with a restaurant/bar/whatever? The design was going to already have a second private courtyard, visible here.



Alternatively, the design could've saved a lot of money by just not modifying the drugstore building at all! Judging by how extensive the roofdeck was to be, they would've had to essentially demolish the entire building save for the tower and outer facade, and then build it all back up. Pavement is not lightweight, nor is the infrastructure required to maintain the trees or the patch of lawn. And that's not even counting the swimming pool! With all that demo, I'm not even sure "historic preservation" is the right phrase to use. You could leave it be and turn it back into an actual drugstore, or maybe an urban Target, which people here seem to be fans of.

Maybe some of the money they'd save could go into improving the design. Quality architecture is a public good too you know!



Lastly, I find the suggestion that those who need affordable housing should just wait for new buildings to wear out to be incredibly shortsighted. The people who need affordable housing need it now!

[beautyfromashes]

^ I know I’m a broken record, but something like Brits in Minneapolis. A lawn bowling pub on top of the Katz would have been a better amenity/draw than what they had and immensely cheaper.

[Chris Stritzel]

There are a lot more ways a project can interact with the public besides the bare minimum of streetscaping, or letting people into your living room(???)

With Katz, for instance, why not make the drugstore rooftop publicly accessible, with a restaurant/bar/whatever? The design was going to already have a second private courtyard, visible here.



Alternatively, the design could've saved a lot of money by just not modifying the drugstore building at all! Judging by how extensive the roofdeck was to be, they would've had to essentially demolish the entire building save for the tower and outer facade, and then build it all back up. Pavement is not lightweight, nor is the infrastructure required to maintain the trees or the patch of lawn. And that's not even counting the swimming pool! With all that demo, I'm not even sure "historic preservation" is the right phrase to use. You could leave it be and turn it back into an actual drugstore, or maybe an urban Target, which people here seem to be fans of.

Maybe some of the money they'd save could go into improving the design. Quality architecture is a public good too you know!



Lastly, I find the suggestion that those who need affordable housing should just wait for new buildings to wear out to be incredibly shortsighted. The people who need affordable housing need it now!

The idea of a rooftop deck on top of Katz for a restaurant or bar would make sense and I lump that into the public amenity retail space idea. The pool deck was placed there, I imagine, to maximize views down main towards Downtown, but that feature could've easily been moved to the other courtyard space. So yes, money could've been saved by not altering the Katz building as much. I don't disagree there.

And I don't mean the older buildings wearing out to become affordable housing. What I have in mind are still great buildings that aren't worn out, just cheaper rent than other places as a result of trying to still remain competitive. There are numerous examples of this out there. Just residents of those properties are more likely than not not going to have all the fancy amenities of other buildings. My argument about the economics of building a brand new building that includes affordable housing holds true. When you plan a building that costs X amount of dollars and you can project a minimum of Y amount of dollars in luxury or market rate rent, then you can determine if the loan period at a bank, and investor promises, can still hold out. Of course, you could plan out this with affordable housing in the mix, but it would be a stretch considering where building material cost is right now, property taxes, maintenance fees, and more. Even something like Cordish's Midland project isn't going to be true affordable. They'll be cheaper units that appeal to more people's budget's (although in smaller unit sizes) but they wont be true affordable. In St. Louis, and I'm sure elsewhere, this is called Workforce Housing.

A project like Katz would most likely work with the Workforce Housing model type of housing, where market rate and apartments for people making 85%AMI are set aside. The rent isn't as low as "affordable housing" but not as high as market rate and luxury housing developments. So, you can make the numbers work even when it comes to building new since a certain amount of revenue can still be expected that's not too high, but not too low. But going all in on affordable and extremely affordable housing like the City of KC mandated is going to make it harder for developers to develop. Ultimately, as has been discussed before, the rule will lead to more expensive housing options in new buildings and older buildings getting "cheaper" in a way.

As I've learned doing some work with developers here in St. Louis, all options have to be on the table when you're doing the pro forma work, included expected taxes, maintenance, rent rolls, and more. A project like Katz definitely could've been altered a bit, but the path LuxLiving is different from how I would've done it, which is most likely different than what you would've done and others on here.

I hope Katz is saved, I really do since it's an icon. But developers need to keep an open mind with this. If they can make it happen without incentives, that's even better. But we'll see.