Published December 24th, 2021 at 12:30 PM2 minute read
By Kevin Collison
The vacant, former AT&T office building at 500 E. Eighth St. would be redeveloped as a 265-unit apartment project under a fresh proposal that’s been submitted to a city development agency.
The Bernstein Cos. of Washington D.C. has a contract to purchase the property from its current developer, Maxus Properties of North Kansas City, and is pursuing a very different future for the 1973 office building.
Maxus had bought the 13-story building in early 2019, shortly after AT&T closed its offices there, and had planned to renovate it into premium office space at an estimated cost of $91.2 million.
Since then, the demand for downtown office space has been slowed both by the ongoing Covid pandemic and the construction of a 260,000 square-foot office building that originally was intended to be the headquarters of Waddell & Reed.
That deal collapsed after Waddell & Reed was bought last year by an Australian firm, and the developer of that project is now seeking new tenants for the space.
As opposed to the sluggish office market, there is a continuing strong demand for more apartments downtown, according to real estate experts.
Bernstein has told the Land Clearance for Redevelopment Authority (LCRA) it wants to scrap the office plan and renovate the AT&T building into a residential project at an estimated cost of about $78 million.
Bernstein is seeking a 15-year property tax reduction to help finance the project, 100 percent for 10 years, 50 percent for five. It’s also seeking state and federal historic tax credits that would generate an estimated $24 million.
The LCRA board is scheduled to consider the request next week.
Bernstein already has a major stake in the downtown apartment market, investing $60 million to renovate the historic Mark Twain Tower at 106 W. 11th St. into 220 apartments. The 23-story residential project is expected to be completed late next summer.
Officials at Bernstein could not be reached immediately for comment about their AT&T redevelopment proposal.
According to its LCRA application, the building would be renovated into 100 studio apartments, 60 one-bedroom and 105 two-bedroom units.
The studio units would average 639 square feet and rent for about $1,200 per month; one bedrooms would average 707 square feet and go for about $1,320, and two bedrooms would average 980 square feet and rent for about $1,830 per month.
There was no information in the LCRA application regarding whether the redevelopment plan would include affordable housing units as required by a new city incentive policy approved by the City Council earlier this year.
Parking for residents would be available in the existing, 575-space underground garage serving the building.
The developer is seeking approval from the State Historic Preservation Office to install windows on the second floor of the building. If that approval is not granted, the project would lose 15 units and rents for the remaining apartment would go up slightly.
Obtaining state historic tax credits for residential project has become much more difficult under new guidelines implemented by the Missouri Department of Economic Development. Historic preservationists and developers have been lobbying to have those rules modified.
The Bernstein redevelopment proposal also calls for co-working space to be created on the first and third floors of the building. The developer also said its renovation plan would qualify for energy-efficiency certification from the Green Building Initiative.
If successful in obtaining the requested incentives, Bernstein anticipates starting construction at the AT&T building by fall of next year with completion in early 2024.