KCBJ Article on Downtown Banks and Development

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KCBJ Article on Downtown Banks and Development

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http://kansascity.bizjournals.com/kansa ... ocus1.html

IN DEPTH: BANKING

Tale of two downtowns
Banks help revitalize city's core, but slow pace in Kansas City often
frustrates them
Jim Davis
Staff Writer

Gant Burcham sounded like Charles Dickens in "A Tale of Two Cities" as
he recently surveyed the streetscape beneath his new second-floor perch
in Missouri Bank & Trust Co. of Kansas City's office.

Evoking Dickens' best of times/worst of times dichotomy, Burcham said
he's encouraged by activity he said was unprecedented during his 20-year
tenure at the bank where he's CEO. As examples of good things happening,
Burcham cited the Urban Culture Project, which has filled empty
storefronts with art, and an outdoor film series that will be projected
in the fall on Missouri Bank & Trust's north wall at 1044 Main St.

But Burcham expressed some frustration with the slow pace of change in
his hometown. He decried Kansas City leaders' historic aversion to risk,
which he suggested has throttled attempts to reignite Downtown.

"It's a great work environment down here," Burcham said. "Rents are
cheap, but we need to bring some charm back. We're surrounded by
high-rises. There's no charm here anymore."

Other Kansas City bankers with greater resources than Burcham also
recognize the import of Downtown's vitality. But whereas banks were
credited by Downtown Denver Partnership President Anne Warhover as
having led that city's nationally acclaimed downtown resurgence, bankers
in Kansas City prefer to focus on more specific projects. When they
become involved in larger initiatives, it's in a more collaborative
role.

Burcham, a leader of the Downtown Council of Kansas City, has used
Missouri Bank & Trust as a springboard for public involvement.
Once-sleepy Missouri Bank & Trust has become a leading backer of the
West Side's renaissance.

Burcham said he sees similar energy surging through other parts of
Downtown, such as the Crossroads and East Side.

"We have to work on the big deals," Burcham said. "But I would also like
to see attention given to grass-roots efforts."

The import of Burcham's message is referenced by the bank's standing.
Missouri Bank & Trust is the smallest bank with a downtown office, but
it places No. 4 in Downtown deposits, according to midyear 2002 figures,
the most recent provided by the Federal Deposit Insurance Corp.

Although this ranking is a bit of a statistical anomaly -- Missouri Bank
& Trust operates just one branch besides its main office -- its effect
on the downtown landscape is undeniable. Just look at the Blue Bird
Bistro at 1700 Summit Ave. or a residential project that's under
construction just north of the bistro. Both got money from Missouri Bank
& Trust.

"I wish I could say it's all premeditated, but it's not, " Burcham said.
"We've created a brand that's tied to Downtown. We get a lot of calls
because of prior deals."

R. Crosby Kemper III, CEO of UMB Bank, said large cities' fortunes rely
heavily on banks that are based within their borders. Kansas City-based
UMB ranks No. 1 in downtown deposits and No. 2 in metropolitan Kansas
City.

Conversely, Kemper said, "it's important for us to have a vibrant city
and a vibrant core. That makes up a big part of our customers and our
employee base. So it's mutual benefit; there's mutual self-interest."

Kemper said he's continuing a legacy of public involvement that he
learned from his father, R. Crosby Kemper Jr. Through the elder Kemper's
direction, UMB two decades ago helped lead financing of Quality Hill's
residential redevelopment and what now is the Kansas City Marriott
Downtown.

Kemper said those commitments were "non-market investments" that were
driven by civic involvement, not economics.

Similar considerations motivated UMB to sell property for a garage next
to the former Fidelity National Bank at 909 Walnut St., which is being
turned into apartments and offices. Kemper said he's also trying to help
a similar conversion proposed for the long-shuttered Professional
Building, 1103 Grand Blvd.

He said UMB's lending practices, among its industry's most conservative,
don't hamper its ability to provide this support.

"A prudent lending policy never gets in the way of advancing business in
the city," he said. "On the contrary, because of our conservative
lending policy, we're still here."

Kemper said he's ready to collaborate on revitalizing Downtown but needs
direction from Kansas City Mayor Kay Barnes and leaders of organizations
such as the Greater Downtown Development Authority (GDDA), which Barnes
established.

"I am behind whatever the mayor and GDDA decide to focus on," Kemper
said, adding that he thinks clearer priorities need to be set. A
downtown arena would be great, he said, but not at the expense of a
performing arts center, whose plans are further evolved.

Kemper also cited successes such as the Kansas City Public Library's new
Central Branch, which will open in the spring.

"We have a lot of good stuff going on," he said. "We need to connect the
dots."

Jonathan Kemper, CEO of Commerce Bank's Kansas City region and a cousin
of R. Crosby Kemper III, said he hopes the city will concentrate on
improving areas such as the library district and not spread its
resources too thinly. The GDDA's difficulty in setting boundaries for
what parts of the city will qualify for the Missouri Downtown Economic
Stimulus Act embodies this debate.

"This is a choice," Kemper said. "Either you develop a community that
has density and shared use and create a 24-hour, safe and attractive
environment, or you don't. If you're going to use this (state assistance
provided by the act) to frustrate density, then we'll have another
opportunity missed, and we'll never get this capacity from the state
again."

Kemper, who serves on the GDDA, said Commerce and other banks don't set
the development agenda.

"Bankers are driven by economics," he said, "and we are interested in
seeing our Downtown return to vitality. But we can only respond to
developers who have made applications and who have business plans that
show they are making a secure investment."

Banks have, however, helped lead several other cities' downtown
comebacks. Perhaps the most notable example is Charlotte, N.C. -- home
to Bank of America, one of the nation's largest banks.

Tim Newman, president of Charlotte Center City Partners, said
Charlotte's banks underwrote a $265 million arena, which will open in
two years, along with an $82 million university campus, which will open
next year in the city's downtown.

Clyde Wendel, Bank of America's top official in Kansas City, said the
same principles have prompted the bank to invest more than $1 billion in
Kansas City since 1999. Some of this money is financing the Vine Street
District on Kansas City's impoverished East Side.

"We do it not because we're required to but because it's good business,"
Wendel said. "A stronger community can only benefit the way the bank
performs."

Mark Parman, CEO of Hillcrest Bank, said the Overland Park-based bank's
lack of an office in downtown Kansas City hasn't stopped it from
financing more than $90 million in downtown housing and other projects
during the past three years.

Money for this work remains limited, Parman said, in what he called
"still a very young market."

"We don't know how deep the market is," he said. "That's the risk we're
all going to face."

Reach Jim Davis at 816-421-5900 or jdavis@bizjournals.com.
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