Even with the pace of activity picking up on several fronts, Greater Kansas City is still a bargain in terms of both living and business expenses. Costs per square foot remain remarkably affordable, especially considering the outstanding transportation and infrastructure network, and the additional improvements on the way.

For office space, in particular, there is still a buyer’s market. Although some locations can seek $20 or more per square foot, a vacancy rate approaching 30 percent in some districts reflects generally weak regional office demand. Housing is far stronger, with market rates from $750 to $1,700, or just over $1 per square foot, and occupancy exceeding 95 percent. Even though demand is increasing, the pace of new units coming on line—particularly with market and affordable-rate apartments—is expected to keep those costs from rising too much.

Dynamic Market

Even with these advantages, the real reason to choose Downtown Kansas City is more visceral: It’s hot.

In today’s economy, exciting areas of development are rare, but Downtown Kansas City clearly qualifies. And while cynics might focus primarily on city or state incentives, critical factors also involve basics such as transportation networks and location that presents advantages for doing business on a regional, even national, scale.

Some of the most important factors may be among the least-discussed—at least among those not already convinced of Downtown’s value. Dynamic crowds and the presence of diverse architecture give this part of the metropolitan area a texture beyond any mono-styled business park. The blend of small, grassroots businesses and intense urban excitement exceed what can be planned in even a large lifestyle center.

Formerly of Chicago and New York, John McMeel of Andrews McMeel Universal is a self-proclaimed Downtown lover who sees the excitement here as real—and a distinct business advantage. “There are so many areas here that offer something special now,” he explained. “That’s why I’m hopeful and confident the area will continue to grow. You can get out and walk around the interesting places, whether it’s for food or culture. Everything is right at your fingertips. Our associates love it.”

McMeel said the impact on his company’s clients was valuable as well. “Authors and creators come in from all over the country and we could not be more pleased to show off our city now. The ambiance, the energy down here, it’s tangible. It’s a great experience.”

Ron Coker of Burns & McDonnell, a vice chair for the Downtown Council sees a similar energy to match more concrete advantages. “From my perspective, locating a business Downtown makes sense because it has a renewed vibrancy. Both the residential and entertainment values have combined to create a viable Downtown center that is really attractive. It has a real urban quality now. You can go down at different parts of the day and night and there are always people and activities.”

Increasing Value

One of the most dramatic additions will be the 2011 opening of the Kauffman Center for the Performing Arts. The $413 million, state-of-the-art center is expected to solidify the area’s position on regional, even national, radar screens. While residents regionally will appreciate the world-class performances in a building with stunning visuals, national and even international businesses will appreciate the amenity as a potential neighbor. Along with existing draws like the Sprint Center and the Power and Light District, the Kauffman Center is expected to move Downtown into a dramatically more competitive position.

“Most people in Kansas City have not experienced the idea of coming Downtown in years,” McMeel said. “But if you get them Downtown, with what the Sprint Center is doing, with the restaurants and everything, they are going to be talking about it. With the arts center opening up, it’s going to get all kinds of publicity. That is going to be giant.”

The region is even overcoming the stereotypical fears of urban areas—and after 30-plus years without an attractive Downtown, that fear definitely existed here. Much of this is easing through first-hand experience, but it’s also the result of deliberate focus.

Joe Close, regional vice president with Country Club Bank and a member of the Downtown Council, said efforts like the council’s public safety and public maintenance teams have made a quiet but steady impact on the area’s image. Sometimes called the “yellow jackets” or “bumblebees” because of their bright shirts, the teams help visitors and keep the area litter free.

“I look out my window and see them giving people directions,” Close noted. “That’s been a huge impact, in my opinion. It really has made a difference.”

Some gaps in the Downtown fabric are even being patched. The Downtown Council has called for doubling the area’s population in 10 years—something that will require a broad combination of public and private efforts. Even as that takes place, other factors, such as increasing retail and service businesses, are evident in developments such as a new grocery in the River Market.

“There’s especially a demand for ‘mom and pop’ restaurant-type space,” noted Adam Blake, a Fort Worth developer planning a mixed-use property near 20th and Central in his native Kansas City.

Blake also cited a broader advantage for Kansas City. “It’s a market with a lot of potential. At least in some areas, there are a lot of opportunities and the competition is not as great. It’s a good market.”

Solid Transportation, Infrastructure

All of this must also be seen overlaying the historic underpinnings of a regional and national center for finance, services such as insurance and law offices and, of course, transportation. Even education and health-care amenities, often cited as key components to successful Downtown development, are strong here. Institutions such as Metropolitan Community College, the Kansas City University of Medicine and Biosciences, and the University of Missouri–Kansas City’s School of Medicine, surround Downtown. One of the region’s highest concentrations of medical care, Hospital Hill, is a Downtown district.

Though far less discussed than the Kauffman Center, another major Downtown structure nearing completion is the $245-million Christopher S. Bond Bridge. Though unlikely to draw international attention, the “icon” bridge will in many ways solidify Kansas City and Downtown’s importance as a transportation hub—and, quite literally, provide I-35 and the NAFTA highway a modern span over the Missouri River.

“That bridge is important,” noted Tommy Wilson, a member of the Downtown Council staff. “It may not be as artistically visible as the Performing Arts Center, but it makes a statement, too. Transportation is one of the reasons Kansas City grew up where it did, and it’s just as important today.”

Downtown development overall reflects similar advantages. “You’ve got the performing arts center coming on, more amenities in the Crossroads and the loop, just a lot of activity,” developer George Birt noted. “Many of these opened in the midst of a severe recession …but in the long run, are still going to generate more than enough to outpace the costs. You have to look at these things in the long run—and in the long run, Downtown Kansas City is really looking good.”

«October 2010 Edition