By Kevin Collison
The developer of a proposed office tower at 27th and Main anticipates its request for a $9 million incentive package for the new headquarters of Fidelity Security Life Insurance will be in front of the City Council in mid-November.
Attorney David Frantze said VanTrust Real estate, the developer, will be seeking a 15-year reduction of its future property taxes and a sales tax exemption on construction materials to help finance the $79 million project.
The 14-story tower is proposed for a 2.7-acre site within the Crown Center Redevelopment campus and would be located near a planned streetcar stop. The last office building to be developed at Crown Center was the 24-story Shook Hardy tower at 2555 Grand in 2003.
Frantze confirmed that Fidelity Security Life would be the main tenant, occupying about 100,000 square feet of the 155,000 square-foot building. Fidelity is currently located at 3130 Broadway.
Frantze said the project could have qualified for the Lucas amendment limiting property tax reductions to 75 percent/10 years and 37.5 percent/15, but is seeking the new limit set by the Council earlier this year, 70 percent/10 years and 30 percent/five years.
The attorney said the property currently generates about $100,000 annually in property tax revenues for taxing jurisdictions including the school district and library.
Even with the $7.6 million future property tax reduction or abatement, the development is expected to generate $17.5 million in additional tax revenues over the next 25 years, according to a private consultant hired by the city.
If the development plan is approved by the Council, construction would likely begin in early Fall 2022 with completion in 22 months.
An application with the Kansas City Economic Development Corp. states Pei Cobb Freed, a renowned national firm, as the design architect for the project and local firm BNIM as the architect of record. HOK is listed as the tenant architect.
Henry Cobb, a founding partner at Pei Cobb, designed 2600 Grand, a 14-story office tower that opened on the Crown Center campus in 1990. He also designed the nearby Federal Reserve Bank of Kansas City headquarters that opened in 2008.
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The way the parcel is situated, elevated from downtown, along the streetcar corridor, and next to Penn Valley Park, it seems as if the developer is really missing the opportunity to capitalize by placing only commercial office space here. Seems like a prime parcel to place a mixed use development, with its proximity to all thats around it. Since the property is part of the Crown Center redevelopment, does that restrict it to only commercial office space or something?
I believe the Crown Center master plan designated that site for office use, but that’s not to say it couldn’t be amended.
Attorneys are smart. “The property only generates $100,000 a year in tax revenue… the new one will generate $17.5m over 25 years.”
It would be a more honest comparison to state that the property will average $700,000 a year in tax revenue vs the current $100,000
or
The current property will generate $2.5m over the next 25 yrs vs the proposal’s $17.5m
Never noticed this! Good distinction
Unfortunately this building will not bring new jobs to KCMO nor is it in a blighted area. It is on a major street car stop and the building will not attract more street car riders or foot traffic which is part of the overall plan. I believe it is a beautiful building better suited for a different site with out tax assistance which this company can will afford to pay.
On the plus side, it will bring more tax revenue for the city/county & public transit.
One neighbor asked Tuesday why a successful company like Fidelity Security Life does not build an office project that does not require public assistance.
“The answer is … they don’t get a return on that,” Frantze said. “And I don’t think you would say that because somebody is wealthy, they should make bad business deals.”
– KC Business Journal
Pefectly said in regards to people who incorrectly anyone can build something so long as they have the money. First off, you don’t do something financially wreckless just because you have the money. Secondly it would be quite difficult to obtain a construction loan for a project that does not meet produce “market” returns. Those are two of many reasons why your simple comment of “this company can will afford to pay” is asinine, in my opinion.
As someone in favorite of development, let’s talk about your take. Assuming the company truly *can* afford to pay for this project, in full… why then would it be in the interest of us, as citizens, to offer the company a deal? The company doesn’t need the tax break, they just want it. What’s in it for us at that point? Neat for some company if they save $9 million on a project they can already afford without assistance, but that’s $9 million our city could spend on plenty of other things.
They “need” it to present a development that produces market returns in order to make the project feasibly from a debt financing perspective. Or are you suggesting because “they can afford it” they should just put up the $79 million in cash? Unfortunately your over simplification of the situation presented is not reality.
The problem with that thinking is that we don’t say that about individuals trying to make purchases.
My taxes get stretched thin so a major Corp can get an ROI? Our schools, streets, water and sewer systems are falling apart and yet we “need” to give away money to a fortune 500?
Remember the Loews hotel debacle? How about how much P&L has cost us? Or how we allow housing development that doesn’t provide affordable housing to the people who these companies need for the service jobs to accommodate all the office workers?
Stop being ok with giving away or future so a company can take that money away from KC as dividends to their shareholders
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