By Kevin Collison
The owners of the Country Club Plaza’s default on their loan has raised the possibility of new management and lifted hopes of Plaza advocates about the future of the venerable shopping district.
“For now, I am choosing to be optimistic that a new owner will bring new energy and abundant resources to the table and a new willingness to work with the city and the community,” said Kate Marshall, president of the Plaza District Council.
“I think it’s good,” said a local real estate professional involved with parties interested in the Plaza should the current co-owners, Macerich and Taubman Co. bow out.
“Right now, things aren’t happening for a variety of reasons,” he added. “I think it would allow for a clean slate moving forward.”
The decision by Macerich and Taubman to default on the $295 million loan in May, first reported last week by the Kansas City Business Journal, was the latest upheaval for the local landmark that many residents believe is a public treasure rather than a private business.
In a statement issued on behalf of the Plaza ownership, Taylor Bunch of Fleishman Hillard said the internal financial problems won’t interfere with the major civic events planned there.
“We are in discussions with our lender, Nuveen, and are actively working toward a mutually acceptable outcome,” she wrote.
“In the meantime, we remain committed to the success of the Plaza and will continue to hold the Plaza’s beloved events, including the Art Fair and the Plaza Lights, while actively engaging with potential tenants to ensure the success of the district.”
Fretting about the Plaza has been a popular local conversation since at least 1998, when North Carolina-based Highwoods acquired J.C. Nichols Co., ending 75 years of local ownership.
Over the years, there has been continuing consternation as the once vaunted tenant mix that drew shoppers from around the Midwest including such prestige names as Saks Fifth Avenue, Bonwit Teller, Burberry and Halls were lost.
A major flare-up occurred in 2010 when Highwoods proposed demolishing the Balcony Building, one of the Plaza’s original Spanish-style structures, to make way for an office building. The firm ultimately dropped the plan after a public outcry.
Social and public safety problems began to increase mostly caused by unruly groups of teens during the summer. In 2011, Mayor Sly James was pushed to the ground by his bodyguards at one shooting incident.
Just last weekend, a 15 year-old was shot during an altercation at 47th and Wyandotte. Two weeks ago, a store employee was wounded confronting a shoplifter. Two months ago, Shake Shack, a popular eatery, shortened its weekend hours because of ongoing fights.
Some local real estate professionals believe the Plaza’s current financial problems began when Taubman and Macerich bought the Plaza from Highwoods in 2016 for $660 million, a price they estimated was hundreds of millions of dollars more than it was worth.
The bricks-and-mortar retail industry in general already had been suffering from the rapid growth of online shopping, then the Covid pandemic hit in 2020, further undermining retail sales.
Earlier this year, the Plaza owners challenged a $292 million valuation established by the County Board of Equalization in 2019, and the state tax commission agreed, knocking it down to $179.6 million.
Now, with a newly-established tax valuation and a decision by the owners to default on their loan, some believe the conditions are right to move the Plaza forward past its current doldrums.
“Despite the recent news of the default, the Plaza is still the Plaza and will always be one of the top retail areas of Kansas City,” said Brandon Buckley, vice president of Lane4 Property Group. “We think it will emerge stronger on the backside.”
Lane4 is major local retail developer headquartered on the Plaza that recently revitalized the Red Bridge shopping center. Buckley said his firm is interested in pursuing an ownership interest in the Plaza depending on how the default process plays out.
Buckley said adding more local restaurants and retailers to the Plaza would help it regain its prominence.
“National retailers have a place, but you’d want to complete the mix with unique local operators,” he said.
Whether the current ownership survives or some new entity takes over however, they’ll still be faced with the big vacant lot on Jefferson Street that was to have been the home of a Nordstrom store.
The buildings previously at the location were demolished in 2019 to make way for what was to have been a 122,000 square-foot department store. That deal collapsed in 2022 and nothing has happened since then.
A real estate professional said even new ownership may not be enough of a fresh start to land a big retailer on the site without city incentive help.
“It would take city involvement for that to move forward,” he said. “They (Macerich and Taubman) should have pursued a TIF.”
A tax-increment financing (TIF) agreement would have allowed the Plaza owners to retain some or all of the sales taxes and other revenues generated by the store to help finance the project.
Traditionally, department stores pay a substantially reduced rent at shopping centers because they serve as a magnet for customers to the entire development.
“It’s difficult to build a building and make money without it paying rent,” the real estate source said.
On the community front, the Plaza District Council was recently formed in response to concerns about the future of the iconic shopping district as it enters its next century.
Marshall believes a “new day is dawning” with the potential of fresh management.
“This has been coming for awhile now, and I there are a number of entities that have been looking at what kind of opportunity may present itself,” she said.
David Westbrook, a respected local communications professional who’s been involved in organizing the District Council, said the group stands ready to assist potential new owners.
“Our civic leaders are even more passionate now about making sure the Plaza’s future is not only promising, but that an exciting new day will will come,” he said.
While its uncertain whether the Plaza could return to local ownership, Westbrook observed that model was in place during the shopping district’s halcyon days.
“The Plaza has always been well served by truly local ownership and we want that possibility for the future,” he said.
“We want to assure any new owners that we will want to be partners.”
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I have completely stopped going to the Plaza for shopping and rarely for dining. After Houston’s left and most of the unique shopping as well as the safety issue, it’s not worth it.
Good read, but the photographs are not loading. Yes, I restart my computer everyday. My internet is blazing. The pinterest icon is present and when I click on that a thumbnail shows up. Hmmm
Nick, I don’t know why the pinterest icon shows up on my stories because I don’t use that social media outlet. Sorry.
When the photos don’t load (sometimes happens to me also) try a clicking the “re-load” button. That works for me. Compliments to Kevin’s article and also to Nick Vedros’ superb photography.
Although vibes from nostalgic days gone by get expressed as “reason to save the Plaza”, this may not be enough in 2023 and beyond. Because this iconic shopping district has lost its luster and is now a muddled group of chain-owned shops crowding sidewalk windows with displays of mediocrity. If the District Council takes a good long (and deep) dive into revitalizing the Plaza, they might develop the “pedestrian-only” format throughout the entire area – on a permanent basis. This once-lively center could become a safe, interesting collection of shops and eateries if the facades of buildings could be enjoyed by shoppers – instead of seen as “drive-by” strip-mall windows. Take a look at the wonderful car-free streets in many of Europe’s major cities. Use these ugly asphalt streets creatively as outdoor opportunities to plant trees, provide seating, areas for neighbors to collect for conversation. Look how many apartment and condo dwellers surround the Plaza – and how devoid of outdoor amenities it provides for them. Come on, KC, we can do this!
I recall the downtown revitalization projects in multiple cities. They were called “urban renewal” and many included “pedestrian only” streets.
Ask Springfield and St. Joseph residents how that worked out!
It was a disaster.
density is critical to success of ped malls. look at Denver and as prior commenter noted, there is a boatload of office and residential density surrounding the Plaza. do it but patrol it on foot or it dies an ongoing slow death.
I agree with the local flavor – but we need a high end anchor store to attract monied shoppers, who will also spend their money in locally owned shops. It is a pity we lost Halls – the last bastion in KC to carry luxury brands. We are much more than a “flyover” city – build it and they will come.
The pedestrian mall, new ownership format are good ideas. One might include the introduction of second, third and fourth floor housing on the interior of The Plaza. Refer to the pedestrian malls of Charlottesville, VA and other successful mixed use, pedestrian oriented towns.
I’m a former KC resident living in Iowa. When I come back to visit KC, we never go to the Plaza anymore due to the hoards of teenagers “messing around” and the ridiculous traffic. I agree that more pedestrian-friendly sidewalks/streets and local stores would make it more unique and fun to go, but I don’t know how you prevent the teenagers from doing what they do unless you create a CID with staff to move them along or have a stronger police presence (but that also looks/feels bad).
I do agree with your comment about “unruly teenagers” and the lack of police/security on the Plaza. However, with a truly active – pedestrian friendly environment such chaos tends to go elsewhere. We should definitely give this a try, in my opinion.
Nicely composed elegantly stated
Before, the Plaza had high end stores and I considered it safe, classy and inviting. Ever since they brought in stores geared towards teens is when everything went downhill bringing in a lot of fighting and crime. Parents dropping their kids off at the Plaza for them to babysit. I so miss the relaxed feeling you had shopping and strolling the Plaza, the live courtyard Jazz music, fine dining, etc. Now it’s just like all the other strip malls therefore no incentive to go there. It’s very unfortunate and sad how much the Plaza has gone downhill over the years since JC Nichols sold it.