Incentives Approved for Crossroads Apartment Plan; Affordability Debate Continues KC's Affordable Housing Trust Fund Rejected Previous Request

Developers of a 12-story apartment project planned for the Crossroads dropped 11 affordable units from its original plan after being turned down on a $3 million incentive request from the Kansas City Affordable Housing Trust Fund.

The 112-unit project proposed by Copaken Brooks for 1818-22 Main St. was approved for an 18-year property tax abatement by the Port KC board this week. Port KC will issue a $36 million bond for the project that will be repaid by the developer.

The incentive package was approved over the objections of a handful of neighbors who said it was too close to their residences at the 1819 Baltimore Ave. condo building and would cause problems accessing their garage through a shared narrow alley.

“I love the project, but not in our space,” said one condo resident.

Another resident of a different building a block south of the development site added the project would undermine the “artsy” character of the Crossroads.

“If we continue to build these multiple story huge modern apartment buildings the character is going to be gone,” she said. “It’s going to ruin my million dollar view of downtown if they build that tall.”

The project still must go through the city review and approval process, including the City Plan Commission, and Port KC board members told opponents their objections were more appropriate for those City Hall agencies.

The bigger conversation was over affordable housing and the city’s continuing struggle to address the issue.

When the 1822 Main project was first introduced two years ago, the plan called for it to set aside 20% of its units as affordable for people earning up to 60% of the area’s median income (AMI).

The Kansas City area’s AMI for a one-person household per federal guidelines is about $67,700 and $77,500 for two people.

Jon Stephens, Port KC executive director, said that affordable level relied on the project receiving $3 million in assistance from the Affordable Housing Trust Fund. The fund was established to provide direct cash incentives to help develop affordable housing.

“This project was unfortunately not funded within the city’s affordable housing trust fund program,” Stephens said.

“The developer came back and requested to work in good faith with us to find what we all hoped would be a solution and understanding that a $3 million in upfront trust dollars would significantly change the development pro forma.”

The project was revised to decrease the affordable set aside to 10%, or 11 units.

The developer also reduced his original request for a 25-year property tax abatement to 18 years, with years one through five at 90%; six through 10, 75%; 11 through 15, 50%, and 15 through 18, 25%.

The property will continue to pay the current tax and is projected to generate $2.7 million in revenue over the life of the incentive while saving the developer $3.9 million in property taxes during that period.

The project calls for 10 stories of apartments above a two-level, 102-space garage. The mix would be 32 studios, 68 one-bedroom units and 12 two-bedroom units. There also would be 1,800 square feet of ground-level commercial space.

Developer Jon Copaken said his firm was not told why its request had not been recommended for approval by the Housing Trust Fund.

“The process is interesting,” he said. “You apply, you don’t get a lot of feedback other than we weren’t recommended.”

Stephens observed that more upfront cash incentives will be needed if the city is to reach the goal of providing affordable housing to very low-income people.

“Getting to the 25 and 30 percent AMI affordable units will never be accomplished with any sort of tax exemption,” he said.

“It’s going to require LIHTC (State Low Income Housing Tax Credits) and Housing Trust Fund because you need that upfront capital cash … to make those marketable.”

Deb Hermann, Port KC chair and a former city councilwoman, agreed.

“Government has to pay for affordable housing,” she said, “and this is a case where a developer is willing to shrink his rate of return which is very unselfish and uncommon.”

Councilman Kevin O’Neil, who is a Port KC board member, added he was concerned the Housing Trust Fund will fall far short of addressing the scale of the need for affordable housing.

“I’m not sure the council has a definitive idea of how to go forward with the Trust Fund,” he said. “We have $50 million and it’s going to be gone before we know it.

“For a city that needs 10,000 new affordable units, I don’t know how we’re going to get there.”

Flatland contributor Kevin Collison is the founder of CityScene KC, an online source for downtown news and issues.