Critical Convention Hotel Agreements Before Development Agency, Includes $59.7 Million Private Investment
Published 6 hours ago
By Kevin Collison
The long-awaited, 800-room downtown convention hotel is poised to begin construction in January if, as expected, the key city development agency handling its financing and property issues approves the deal Wednesday.
The Land Clearance for Redevelopment Authority board is scheduled to consider the final financing and leasing agreements with KC Hotel Venture LLC, the entity created by New York-based hotel giant Loews and its partners to build the $322.7 million project.
For the first time, the stack of LCRA documents prepared for the deal indicate how much private equity that Loews, the majority owner, and its partners, Steve Rattner of New York and Timothy O’Byrne of Denver, are contributing to the project: $59.7 million.
And it identifies what the developer is paying the American Hereford Association for its property located in the heart of the development site on Wyandotte Street across from the Bartle Hall ballroom: $9.1 million.
The city is contributing $35 million in cash to be repaid from hotel bed tax revenues, and land it owns on the development site along Baltimore Avenue valued at $7 million.
The remaining funding sources are $111 million in public financing and a $110 million loan from Wells Fargo Bank.
LCRA documents reveal the developer is paying $9.1 million to acquire the American Hereford Association property.
All the public contributions to the project are expected to be covered by the new tax revenues generated by the hotel and its community improvement district.
In addition, the LCRA is considering a sales tax exemption for construction materials, furnishings and equipment.
Greg Flisram, LCRA executive director, said the board will be considering all the documents necessary for all the property necessary for the project to be acquired by year’s end as demanded by the developer.
“It’s to approve all the agreements to move the project forward,” he said.
A briefing by the developer to the Kansas City Council also is scheduled at its Thursday business meeting.
The LCRA agreement describes the hotel project, which will be run by Loews, as including 800 hotel rooms, 75,000 square feet of meeting space, a 450-space garage, 15,450 square feet of retail, restaurant and bar space, 9,913 square feet of recreational facilities and a 4,500 square foot terrace.
The three-acre hotel development site is bound by Wyandotte, Baltimore, 16th Street and Truman Road. The construction timetable listed in the LCRA documents states the project will be completed by early 2020.
It’s first major convention, the 2020 Shriners International, is expected to draw 20,000 participants in early July 2020.
Footprint of convention hotel project
The main entrance of the convention hotel will be on Wyandotte Street.