Downtown Transformation




While it may be hard to pinpoint the big-bang moment that gave rise to a new Downtown, it’s easy to see the way that new stars have aligned for this region’s business center.

Looking across the expanse of Downtown Kansas City and its Central Business District today, it’s hard not to feel impressed by what the community has achieved through a combination of visionary leadership, effective collaborations and steely determination in the face of some economic and procedural challenges.

Billions of dollars after the investments started to flow in, Kansas City has a new Downtown, and a growing awareness nationally that things get done here.

More than a decade after that renaissance began, it’s still hard to pinpoint its genesis. The roots go back to the 1970s, when former AMC chief executive Stan Durwood began to promote a vision—unrealized in his lifetime—to reverse decades of exodus and decline by creating a new, vibrant and thriving Downtown.

Just a few years after his passing, and with Mayor Kay Barnes pressing for action on multiple fronts, the Greater Kansas City Sports Commission and Foundation began a series of studies on building a new Downtown arena. Barnes then announced that the Greater Downtown Development Authority would take the lead on making the arena a reality.

The dominoes were starting to fall now.

In December 2003, H&R Block announced that it would forsake the suburbs and build its new world headquarters Downtown. It did so with the promise from Kansas City’s civic leaders that the $138 million invested in that effort would not produce a glittering building surrounded by blight by the time it would open in 2006.

At almost the same time Block made its announcement, the City Council signed off on a plan that would charge Baltimore-based Cordish Companies with the task of building a new retail core adjacent to the Block building site at 14th and Main. That agreement was the first in a series of events that would lead to the opening of the Power & Light District, an $850 million aggregation of restaurants and retail stores with the kind of pull that would bring suburbanites back Downtown after-hours, or keep them there longer before their commutes home.

By 2007, the tangible evidence of transformation was all over the Central Business District. H&R Block had moved into its new offices in 2006, as had the Internal Revenue Services with its $370 million campus at the base of the Liberty Memorial. The following year saw both the Power and Light the $250M Sprint Center opened in the fall, and just a year after that, the Federal Reserve Bank of Kansas City settled into its new $175 million headquarters overlooking Downtown from behind Liberty Memorial.

Even before Kansas City residents could take the wrappings off those new toys, ground was broken, in October 2006, for the next jewel in Downtown’s Crown: The $414 million Kauffman Center for the Performing Arts. The previous projects had generated a nationwide buzz about Kansas City; The twin venues of the K-PAC, as it would come to be informally known, made ripples around the world for the quality of its design, acoustics and user experience. 

It also marked a fundamentally different kind of investment in Downtown, for a while the city was on the hook for $47 million to build a 1,000-car parking garage for the center, the vast majority of the funding came from the private sector, primarily through donations from the Muriel McBride Kauffman Foundation and the Ewing M. Kauffman Foundation.

At this point, the transformation of Down-town was generating momentum on another front: Residential housing. Although the condo-conversion movement ran headlong into a brick wall with the nation’s 2008 financial-system crisis, demand for apartment units continued to soar. The population of Downtown nearly doubled to 20,000 during the decade of growth, with a target of 40,000 residents—a figure that economic-development authorities believed would yield the critical mass needed to sustain a thriving core.

In 2014, work began on the first Downtown new high-rise residential build-ing in decades, the $105M One Light, a 25-story tower developed by Cordish Co. That projects was part of an integrated plan for housing expansion in and around the Power & Light Distict: A total of four towers would be built, if demand warranted, with each new project triggered by a target level of rental commitments in the previous structure.

Screen Shot 2016-05-31 at 9.57.30 AMOne Light, with 315 units going at market rates, opened in the fall of 2015, and, based on the public’s reception to that, Two Light broke ground in April 2016. That 24-story tower will add 300 more luxury units, and plans are on the drawing boards for Three Light and Four Light. If that build-out proceeds as anticipated, more than 1,200 apartment units would infuse the Downtown core with a fixed population of comparatively affluent residents who could bring greater financial stability.

The residential building boom is taking place all across Downtown, with projects like the iconic Kansas City Power & Light Building. It sat nearly vacant for years before developers started work in late 2014 to transform it into 258 luxury apartments just to the west of the Power & Light District.

Figures compiled by the Downtown Council in its most recent annual report show just how far we’ve come, broken out by the various pieces that form the whole of a new Downtown. Among the key metrics:

Private Office Space. Downtown added 2.1 million square feet of private office space from 2000 to 2012, and while that momentum has slowed, it’s being supplemented by renovation to increase the stock of properties better-suited to businesses in today’s economy. More than 913,000 square feet of renovated space came on the market in that samer period, with 787,000 square feet of renovations since 2012. 

Public-Sector Offices. Through 2014, Downtown added 1.7 million square feet for use by government at all levels, and 940,000 square feet of renovated for space.

Residential Units. Evidence of how this sector trailed the office market: Nearly one-third of the apartments added since 2000 have come since 2012—3,564, out of a total of 10,565. Much of that growth, however, came with effective gutting of the condominium market after the 2008 real-estate meltdown. From 2000 to 2012, the market saw 2,370 condos (155 of them new), but only 13 since then.

Hotel Rooms. Even as the city struggles to build consensus over a new convention hotel with 800 rooms, Downtown added more than 1,100 hotel rooms through 2012, with nearly 1,000 room renovations. A recent wave of building with boutique hotels and sub-con-vention-level properties—including one major project undertaken without city subisides—have added 680 rooms to the inventory, or soon will.

Overall, the value of projects undertaken since 2000, and either completed or in the works, totals $6.32 billion. Of that, $5.29 billion had been accounted for through 2012, an average of about $406 million a year. The pace has picked up in the past three years, with $580 million in 2013-2014, and a far more robust $663.1 million planned or curently under construction. That broke down into 196 projects over that first decade-plus, then 43 in 2013 and 2014 and 26 projects are in development now.

 

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As mid-2016 approaches, a few more big pieces of the puzzle are being wedged into place. For one, fund-raising continues on efforts to bring the UMKC Conservatory of Music and Dance to its planned new home near the Kauffman Center for the Performing Arts. This project expects to bring more than 1,000 students, faculty and support staff under the Downtown umbrella and to burnish the artistic credentials of the burgeoning Crossroads arts district.

Not far away, in the space between Union Station and Crown Center, plans continue for a fundamental remaking of Washington Square Park, five acres of green space that could become a potential destination gem in the Crown Center district, since it sits just across Main Street from the southern terminus of the streetcar. And back inside the Downtown Loop, the new Downtown YMCA, a $38 million project, is planned to be built at the former Lyric Theater site located at 11th and Wyandotte.

The question for Kansas City now becomes whether residents have the collective, sustained will to continue with large-scale projects. In addition to the streetcar-extension vote, considerable opposition has emerged to plans announced in May 2015 for the convention hotel across the street from the Kansas City Convention Center. 

And even smaller projects have enflamed opponents of tools like tax-increment financing, such as the $13 million project proposed for a new headquarters building by architectural firm BNIM. Early this year, the firm announced that, in the face of that opposition, it was withdrawing its proposal.

2.2 Mile Starter Line

Screen Shot 2016-05-31 at 9.57.48 AMThe Kansas City streetcar system made its official debut on May 6, 2016, with a two-day series of events aimed at getting people on board to try out the $102 million project, which runs 2.2 miles from the River Market on the north end of the Downtown Loop to Union Station on the south end. That opening-weekend push boosted ridership totals for the first week in operation past 50,000, and even the daily traffic that followed opening weekend beat projected daily ridership of about 2,500.

Already, supporters of extending the system say, the starter line is attracting more private investment Downtown. The only question is, will it match the kinds of economic-benefit projections needed to argue successfully for spending additional hundreds of millions of dollars to extend the line into Midtown, or into eastern Kansas City.

Even before the debut, system advocate say, the certainty of a streetcar system during construction produced some key benefits:

• Roughly half of the $1.24 billion  in commercial, cultural and residential developments Downtown, they say, fell within a two-minute walk of the streetcar line, about $561 million.

• Combined, Downtown has seen 29 residential developments, with a total of 3,564 housing units, under construction or announced since work started on the streetcar line.

•  On the commercial side, 22 developments, covering roughly 1 million square feet of office space, have been announced or started since streetcar installation began.

•  Among those are six hotel projects with a combined 680 rooms.

Mayor Sly James has repeatedly said that, expansion of the streetcar system is a must for Kansas City to continue its growth track in the Downtown area. In 2014, voters offered a resounding “no” to plans for expansion of that line into Midtown, and potentially to the Country Club Plaza and the nearby University of Missouri-Kansas City campus. With the first portion of the line up and running, favorable ridership figures would give him one more tool to help sway public opinion to achieve that goal.