Big West Bottoms Redevelopment Project Wins Key Tax Incentives
Published October 20th, 2023 at 11:30 AM
By Kevin Collison
A $526 million plan that would revitalize a big section of the West Bottoms by restoring dozens of historic buildings and repairing its crumbling infrastructure won vital tax incentive support from a city development agency Thursday.
The sweeping proposal by New York-based SomeraRoad, which already has backing for its plan at City Hall, was granted an incentive package for the five-phase project on a 9-2 vote by the Planned Industrial Expansion Authority (PIEA).
“This project is transformative simply because of the scale,” said Andrew Donchez of SomeraRoad. “We believe its important to preserve this history.
“Some of these buildings are close to beyond repair and we think it’s a critical time for both the city, for us and for the West Bottoms to start this process of saving its history.”
SomeraRoad has been pursuing its plan since early 2022. When fully built out in 2038, it would add 1,150 apartments; 168,000 square-feet of office; 100,000 square feet of retail, and a 40-room boutique hotel in a 17-acre area north of the 12th Street viaduct.
A breakdown of SomerRoad’s phased redevelopment in the West Bottoms. (Illustration from PIEA presentation)
In addition, new tax revenues generated by the project would pay for $58 million in public infrastructure work to repair decaying streets, sewers and sidewalks, some dating back to the early 1900s.
The Kansas City Tax Increment Financing Commission is scheduled to meet next month to consider a TIF plan that would divert tax revenues from the project to pay for the infrastructure work.
“This is a project that…will allow city to upgrade a lot of infrastructure in the area, some of it is older than 120 years old,” said Mario Vasquez, assistant city manager. “That’s a lot of work, a lot of risk. I think it’s shared.”
As is often the case, the biggest debate by PIEA members was over the size of the incentive request.
The developers asked for a 20-year tax abatement for phases one and two, 90 percent for 10 years, 70 percent for the remaining 10 years. For phases three through five, the request was for 15 years, 10 years at 70 percent and five years at 30 percent.
An aerial view of buildings to be renovated as part of the SomeraRoad plan. (Image from PIEA presentation)
Even with the abatement, the project would generate $62 million over 25 years in revenues to local taxing jurisdictions including $37 million to the Kansas City public schools. Without the development, the properties would yield $3 million in revenues during that period.
An analysis by S.B. Friedman, the third-party consultant hired by the PIEA to analyze the deal, recommended all five phases of the project receive the standard 15-year property tax abatement set by the city, 70 percent for 10 years, 30 percent for five.
“The alternative level of assistance…appears to produce a feasible project,” said Lance Dorn of SB Friedman.
That lower tax abatement recommendation was supported by the school district. Kathleen Pointer, a senior policy analyst for the schools, said the district would lose $9 million in potential revenue with the developer’s request.
The derelict Weld Wheel Building at 933 Mulberry is scheduled to be demolished next month and replaced with new apartments in a redevelopment plan being pursued by SomeraRoad.
“We could support this project if it was before you with an appropriate and necessary level of assistance, but it’s not,” she said. “This development team is asking you for millions more in potential revenues than is necessary.”
Opposition letters also were submitted by 75 teachers.
Charles Renner, the attorney for the developer, said the incentive request for the first two phases already had been scaled back from 25 years to 20 years following negotiations, and the last three phases trimmed to meet the city’s 70/30 requirement.
“This (SB Friedman) analysis does not capture the shared risk we have in the initial phases of this project and how risky and pioneering going to the West Bottoms and doing something of this scale is initially,” he said.
A motion by PIEA board members Andrea Flinders and David Valdiviezo to approve the S.B. Friedman incentive recommendation failed 9-2 after Renner said it would kill the deal.
A rendering of West Bottoms redevelopment planned by SomeraRoad. (Rendering from SomeraRoad presentation)
The board than voted to approve the developer incentive request by the same 9-2 vote.
The proposal received support from construction and janitorial unions, Mayor Quinton Lucas and Fourth District-at-Large Council member Crispin Rea.
“We express our full support,” said City Manager Brian Platt. “They have great vision for this neighborhood to reactivate and revitalize a part of the city that’s been long overlooked.”
Donchez said the first phase of the redevelopment was “almost shovel ready.” A schedule shown the PIEA board indicated demolition of the derelict Weld Wheel building could begin next month.
The city would begin work on infrastructure in April in conjunction with the developer beginning construction. A public square called Union Depot that would be the centerpiece of the project would be part of the initial work.
A breakdown of the building plans and schedule for the SomeraRoad project. (Chart from PIEA presentation)