By Kevin Collison
Hotel Bravo!, an ultra-luxury hotel proposed next door to the Kauffman Center, experienced a possibly fatal setback Thursday when the TIF Commission recommended the City Council reject the $63 million redevelopment plan.
The 8-3 decision by the commission means the project backed by developers Whitney Kerr Sr. and Eric Holtze will require a super-majority on a Council that has shifted toward a more critical stance about using tax incentives for downtown projects since the last election.
The 13-story hotel proposal, which was first introduced a year ago, was seeking significant incentives including a TIF and Super TIF as well as other tax breaks. About 35 percent of the development cost would come from tax incentives.
The developers are proposing a five-star caliber, 145-room hotel that they say is lacking in the current downtown market, and would be appealing to well-heeled travelers coming to Kansas City for cultural tourism, including performances at the Kauffman Center for Performing Arts.
But critics on the Tax Increment Financing Commission believed the level of incentives being sought far exceeded the benefits.
They also expressed frustration with the process, citing changes being made or promised by the developer to the redevelopment plan as recently as earlier this week.
“We are being asked to consider a project today that’s very different,” said Caleb Clifford, the Jackson County TIF Commissioner.
“We’re being told trust us, we’re making changes. I believe this body is not being taken seriously. You’re saying we’ll fix this (with the Council) later, we’re done with you.”
The most recent effort by the developer to sweeten the deal called for diverting a portion of the new parking revenues expected at the Performing Arts Center garage to the taxing jurisdictions including the school district, county and library.
The Hotel Bravo! project would use the city-owned garage for its patrons and visitors. The developer estimated $140,000 annually would be generated by the additional parking revenues and pledged to make up any shortfall.
But city development officials pointed out that revenue number had not been verified.
Kerrie Tyndall, assistant city manager and member of the TIF Commission, also observed the parking revenues essentially were an additional city contribution to the project being sought to make it more attractive to the other taxing jurisdictions.
“I think we’re lacking important details on how this would work,” she said.
Attorney Mike White, who represented Hotel Bravo! emphasized the redevelopment plan would require no direct cash assistance from the city or require any credit guarantee by the city.
The development team estimated that even with the tax incentives, the project would generate $26 million in new tax revenues to the schools, library, county and other taxing jurisdictions over 23 years.
“It’s a very expensive project because it has to meet the architectural quality of the Performing Arts Center,” White said.
The redevelopment plan also was opposed by Visit KC, the regional tourism promotion organization.
Randy Landes, the Visit KC chief financial officer, said his organization is seeking $6 million over the 23-year life of the development plan to compensate for lost revenues from the hotel bed tax. He estimated the developer was offering $4 million instead.
The plan did get applause from some TIF Commissioners.
Former City Councilman Troy Nash recalled how desolate downtown Kansas City was at the beginning of the 21st Century.
“Now we’re arguing about the merits of a five-star hotel, something we would have done 20 years ago,” he said. “I’m going to vote for the proposal because I don’t think the city is where it ought to be.
“A five-star hotel next to a $425 million Performing Arts Center is not a bad thing.”
Following the TIF Commission’s rejection of the plan, Holtze described the body as the “anti-TIF, TIF Commission.”
Kerr added, “On to the next battle.”
In a statement, the development team said their project would have “extraordinary” benefits to the city.
“We are very much looking forward to proceeding to the City Council, where we hope the mutual benefits of this exceptional public-private partnership will be recognized.”
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