The future of a proposed downtown office tower is now in the hands of a new city council torn between fulfilling a 15-year-old contract and protecting taxpayer money.
The 25-story tower would be the first multi-tenant, premium office building built downtown since 1991. It would be built on a speculative basis — meaning it has no tenants lined up — on the southwest corner of 13th and Main, above current retailers like Yard House.
On Wednesday, 1st District councilwoman Heather Hall summed up what several councilmembers were feeling.
“I believe that as a city we need to keep our commitments,” Hall said, noting that she and her colleagues are being left to fulfill promises made by a previous council.
“I don’t want to be the person who takes care of funding other people’s issues… I feel like you all should come to town and do it yourselves.”
The $133 million project grew out of a 2004 development agreement that gave H&R Block rights to build an expansion of its headquarters with significant public investment from the city, including a parking garage. Block wouldn’t occupy the new building but is part of the development team.
While proponents say there is a great need for class A office space downtown, city councilmembers are wary of backing the project with city funds.
Over the last several months, the project has twice been before a committee, sent to the council for a final vote and ultimately sent back to a committee for more work.
On Wednesday, developers proposed a plan in which the parking garage and office tower would be built using private financing — $63 million of which would be backed by the city. A portion of revenues from the parking garage and the office building itself would go to the city to make debt payments.
That means if revenues fall short, the city could have to dip into its general fund to pay up to $5.5 million in debt per year.
John Copaken, who is on the development team, doesn’t foresee that worst-case scenario.
“We’re confident that the demand towards downtown and the demand for this building is there,” Copaken said.
Kansas City has faced skepticism over its use of tax incentives and other public investment in downtown development. Many new members ran on promises to stop the handouts downtown and start investing in neighborhoods.
Melissa Robinson, who recently took over as 3rd district councilwoman, said she could not prioritize debt payments on a downtown office tower over money for police, fire and other public services.
“This is for me a question of priorities and what we potentially would be giving up,” Robinson said.
Supporters say in the end, a successful project will add money to the city’s general budget. And they say downtown Kansas City has already missed out on opportunities because most of the available office space was built in the 1970s and 1980s.
The proposal will be before the full council this week.
If H&R Block does not implement the development in the next seven years, they will lose their rights to The Cordish Companies, which has designated the site as a future location for more luxury apartment towers.
Lisa Rodriguez is a reporter and the afternoon newscaster for KCUR 89.3. Follow her on Twitter @larodrig.
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