By Kevin Collison
The renovation of the historic Carnival building at 802 Broadway into 39 loft apartments is expected to begin in late March after the project was approved for tax incentives Monday by a city development agency.
The developer, Exact 802 LLC was approved for 75 percent, 10-year property tax reduction by the Land Clearance Redevelopment Authority for the $9.8 million project. The redevelopment also will be receiving state and federal historic tax credits.
It’s also the latest downtown office building to be converted to housing.
“That building has gone through a lot of changes over the past 10 years,” developer Bob Mayer told the LCRA board.
“People think downtown is revitalizing, but the fact is, we’re now through a cycle of 20 years where office is becoming much more challenging and thats why the conversion to residential.”
In addition to the apartments, the eight-story building will offer 1,200 square-feet of retail space on the first floor, and 3,149 square-feet of retail in the basement level.
The developer also is participating in an effort by the Downtown Council and Kansas City Parks Department to revive the small Garment District Park located next door. Backers hosted a party in October to stir interest.
The building opened in 1903 as the Harvey-Dutton Dry Goods Co. Building and is part of the historic Garment District. It was previously renovated as an office building in 1997. It currently has two tenants remaining and is about 70 percent vacant.
This is the first downtown project by Exact, which has been an active developer in Midtown and along Troost.
The firm firm renovated the historic Netherlands Hotel and Monarch Storage buildings near 39th and Main into apartments, and its most prominent Troost project was the renovation of the historic Wonder Bread bakery at 30th and Troost into the Wonder Shops + Flats.
The Carnival project will have 12 studio units with average rents of $945; 21 one-bedroom, $1,195 per month, and six two-bedrooms at $1,425 per month.
The project was not required to meet the city’s affordable requirement because it was a historic redevelopment. It sets aside 20 percent of the units for people earning up to 60 percent of Area Median Income.
The developer did say the studio unit rents were at 67 percent AMI, and the remaining apartments were at 77 percent AMI.
The Metro Kansas City AMI for a one-person household is $67,700 and $77,500 for a two-person household, according to the U.S. Department of Housing and Urban Development.
Mayer said the Carnival project should be completed by mid-2024.
In other matters, the LCRA board transferred the tax incentives granted for the Hyatt House hotel project at Ninth and Broadway to a new development group.
Work on the 13-story, 154-room Hyatt project began in early 2019 but was halted about a year later. The tower crane was ultimately dismantled and the construction site has been dormant since March 2020.
The LCRA had approved a $38 million construction bond, but the developer’s private lender fell through, according to agency documents. The subcontractors later filed lawsuits against the agency, which retained title to the property as part of the redevelopment agreement.
The original developer, Scott Pedersen, has enlisted two partners to the deal, O’Reilly Hospitality Management of Springfield and Lotus Holdings of Kansas City. The team is expected to seek a new development loan and resolve the subcontractor lawsuits.
The LCRA board approved transferring the original 15-year property tax abatement, 10 years at 100 percent, five years at 37.5 percent to the new team.
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$945 is pretty steep for a studio, but those one- and two-bedroom prices are quite reasonable for anywhere downtown.
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