Proposed 14th and Wyandotte Tower Attracts Unique Hotel Interest

By Kevin Collison

Lux Living’s 27-story proposal at 14th and Wyandotte began solely as an apartment project but shifted into adding 200 hotel rooms when the plan attracted strong interest from hoteliers not in the local market, according to its developer.

“When we started the process, we were first looking at an apartment building,” said Victor Alston of Lux Living told members of the Land Clearance Redevelopment Authority last week

“Over the course of a few months worked with a varity of hotel flags and found the location was conducive to a hotel development.”

At a meeting where the LCRA board approved tax incentives for the $194.5 million project, Alston said that among the interested hotel operators were Kimpton, Hard Rock, JW Marriott and Virgin Hotels.

“It’s a really good example of what’s to come because of what’s already happened with Loews (Convention Hotel), I think a lot of new flags are interested in coming to this market,” he said.

The proposed tower would be next to the historic Power & Light building which is now an apartment building. (Rendering from DLR Group)

The LCRA board unanimously approved a 17-year property tax abatement for the proposal, 80 percent for 10 years, 50 percent for seven. It also will have the sales tax on construction materials waived.

While the incentive package was less than the developer had requested, it was more than what had been recommended by S.B. Friedman, a private consultant hired by the LCRA.

Lux had asked for a 20-year abatement, 80 percent for 10 years and 50 percent for 10 years, that would have reduced the project’s property taxes by $17.3 million over 25 years. It would have still yielded $19 million in new revenues to taxing jurisdictions.

The S.B. Friedman “but-for” analysis supported the need for incentives to make the project economically viable, however it recommended an alternative 15-year property tax abatement, 10 years at 75 percent and five years at 50 percent.

Dan Moye, the LCRA executive director, said the agency’s staff felt the project merited a larger abatement than recommended by its consultant.

“We always want to be closely aligned with the third party analysis as we can, but in this scenario working with the developer and hearing their needs we really believe this is necessary to get this deal done,” he said.

Moye also noted that 60 of the project’s 300 apartments will be reserved for households earning 60 percent of Area Median Income. All would be studio units renting for $950 per month.

A chart showing rents and apartment sizes at the proposed Lux Living apartment building. (Chart by S.B. Friedman)

The developer also is seeking incentives from the Tax Increment Financing Commission for the hotel component.

That incentive request would allow the developer to keep the 2 percent food and beverage sales tax; 10 percent utility tax and .5 percent of the city earnings tax of employees. It also would allow Lux to collect an additional one percent sales tax.

The LCRA incentive request was opposed by a representative of the Kansas City School District and two city school parents.

“It’s extremely concerning that we’re considering over incentivizing a project,” said Kathleen Pointer, a senior policy strategist for the school district.

“Even one dollar it does not need to go forward, we’re taking dollars out of classrooms. With this project, it amounts to millions of dollars we’re taking out of classrooms.”

Pointer also noted a significant amount of the incentive would go toward subsidizing the 358-space garage that would be part of the project.

“At this point the school district is begging city leadership and across our development agencies to come up with a parking plan for downtown so we stop redirecting dollars out of classrooms into garages,” she said.

Lux Living will continue to pay the current property tax and the additional increments called for under the LCRA incentive deal, but won’t be taxed on the full, new value of the completed project until after 17 years.

The Lux Living project is being considered for the northeast corner lots at 14th and Wyandotte across from the new Blue Cross building shown in the background. The Power & Light Building is to the left.

The project was supported by Mario Vasquez, an assistant city manager. The development plan already has been approved by the City Plan Commission and City Council.

“I want to reiterate the importance of trying to push forward projects of a large scale that have an impact to jobs and employment and housing in Kansas City,” he said.

The project, which is being pursued by an entity formed by Lux Living called Monte Rosa LLC, is proposed for what’s currently a parking lot and a vacant, rubble-strewn plot northeast of 14th and Wyandotte.

It would be next door to the historic Power & Light Building at 14th and Baltimore.

“It’s not a historic site, but it’s next to a very important historic landmark and building,” Alston said. “We spent a lot of time to make sure the new building would resonate and work well with the existing building.”

It would be the first high-rise development built by Lux Living.

The St. Louis apartment developer currently is building two projects locally, the 215-unit Wonderland project at 19th and Broadway, and the 192-unit Katz project at Westport Road.

Alston said his firm plans to use a local construction firm to build the tower. The project would pay prevailing wages and follow city policy for utilizing minority and women contractors. Greystar, a national real estate firm, would manage the apartments.

The tentative timetable calls for work to begin in 2024 and completion in 2027.