Ultra-Luxury Hotel Proposal by Kauffman Center Before Council

(UPDATED: Oct. 12. The full City Council rejected the Hotel Bravo! development proposal at its meeting Oct. 7 by an 11-1 vote. Councilwoman Katheryn Shields cast the lone vote to support the project, Councilwoman Heather Hall was absent.)

(UPDATED: Sept. 29. The Council Neighborhood and Planning Committee sent the Hotel Bravo! proposal to the full Council for consideration next week without recommendation after the plan received a rocky reception from the hotel and tourism industry, and the Kansas City School District at a hearing today.

The developers also said they have reduced the length of their proposed TIF agreement from 23 years to 20 years to make their incentive request more appealing.

Officials with Visit KC, the Hotel & Lodging Association of Greater KC and the neighboring Loews Convention Hotel all said the proposed ultra-luxury project was unnecessary at a time when downtown monthly hotel occupancy rates have only averaged 35.6 percent since the beginning of the year, full recovery is not expected until 2025-26 and Visit KC, the region’s tourism and convention marketing agency, is in a funding crisis because of the travel downturn caused by the pandemic.

“Our hotels continue to operate at levels that are certainly not profitable, we’re just getting by,” said Kurt Mayo, executive director of the Hotel & Lodging group.

“We need to take action to bring business back to KC. To do this we need to make sure Visit KC is properly funded during this time of low occupancy.”

Steve Rattner, one of the partners in the Loews Hotel, objected to the proposal for similar reasons and also challenged the Hotel Bravo! developers claim there’s would be the only five-star hotel in Kansas City.

“I believe the project is not viable, two, the hotel is not needed today and three, the project siphons off funds that are certainly needed at Visit KC,” he said.

“I take a little umbrage that the Hotel Loews is not a five-star hotel. We have everything and more that this city needs that we can provide the Kauffman, will continue to be a good citizen and do that for the Kauffman Center as well.”

The project was supported by a representative of labor and union organizations as being an important job provider.

It was opposed by a representative of the KC School District who said tax incentives shouldn’t be provided to help build a luxury hotel.

Councilwoman Andrea Bough opposed the amount of the incentive request and observed there was no guarantee it would be a five-star facility.

She also challenged the developers claim that five-star hotels have helped spur the growth of similar cities including Nashville.

Committee Chairman Lee Barnes, Jr. agreed: “It is a little off putting to suggest that the reason Kansas City isn’t growing is because we don’t have five-star hotels.

“That wasn’t said directly, but that’s the inference we received…I don’t think any city will necessarily just grow because you have more four or five star hotels.” )

By Kevin Collison

The long-drawn Hotel Bravo! proposal is expected to be reviewed by a Council committee today and backers hope this time their $63.5 million endeavor will win the city applause they’ve sought for three years.

“We think we have a good chance to get this done,” said Whitney Kerr Sr., who along with co-developer Eric Holtze has been pursuing the ultra-luxury hotel proposed across the street from the Kauffman Center.

The redevelopment plan is scheduled to be reviewed by the City Council Neighborhood Planning and Development Committee and Kerr anticipates a full Council vote on their incentive request could come as early as Thursday.

“I think people are beginning to focus on the merits of this project and seemed to be changing minds and open as opposed to the last three years,” he said.

Developers Whitney Kerr Sr. (left) and Eric Holtze pitched their Performing Arts Center Hotel project at a garage-top press conference last year near the Kauffman Center.

It’s been an uphill battle since the project was introduced to the Kansas City Tax Increment Finance Commission in September 2018. The Commission ultimately voted against the developer’s request for incentives totaling about 35 percent of the development cost.

That negative vote meant the Hotel Bravo! redevelopment plan requires a super-majority of the Council, nine votes, to succeed. And Kerr and Holtze have been lobbying Council members ever since.

“We’ve been going to various meetings and listening,” Holtze said. “I think we’ve made good progress.”

The 13-story, 143-room hotel is proposed for what’s now a vacant lot near 16th and Wyandotte streets. It’s now being called the Performing Arts Center Hotel.

Supporters have said it would be five-star quality and a critical asset for the city to attract high-end visitors and conventions. It would be managed by Texas-based Aimbridge Hospitality and employ more than 100 people.

The proposed ‘Hotel Bravo!’ (right) would be located across Wyandotte east if the Kauffman Center garage. The new Loews Convention Hotel is shown in the upper left. (Image from developers)

“A world-class city deserves a world-class hotel,” Kerr said.

PAC Holdings, a non-profit associated with the Kauffman Center that controls the property, plans to sell the development site for $3.7 million and invest the proceeds to help fund the hotel project.

The financing breakdown calls for $16.5 million in private equity, private financing totaling $20 million and a $20 million loan that would be repaid by the new tax revenues generated by the project through the TIF program.

As part of their lobbying effort, the developers have emphasized the city will not be obligated to back the TIF revenue bonds should the hotel not generate the business anticipated.

Because its owned by a non-profit, the property currently generates about $3,000 per year for the Streetcar Transportation Development District, and no revenues for other taxing jurisdictions.

Even with the TIF incentives, developers say the project would generate about $1 million annually in new revenues for taxing jurisdictions through the 23 year life of the TIF agreement. After the TIF expires, it would yield an estimated $4 million annually.

Developers are proposing the new parking revenues generated by hotel guests using the city-owned Arts District Garage be used to assist East Side endeavors. (Photo from Google Maps)

One of the bigger selling points of the redevelopment plan has been its proposed use of the Arts District Garage attached to the Kauffman Center to provide parking. The 1,000-space garage was built by the city and is often underutilized.

The Hotel Bravo! developers estimate using the garage for hotel patrons will generate $300,000 initially for the city and up to $600,000 annually over time.

They’re suggesting those new parking revenues be used to help support projects benefiting the East Side including Love They Neighbor, a home-owner support organization, and the Onyx Corp., which is involved in the 18th & Vine District.

Some of the parking revenues also would go toward replacing some revenues lost in the TIF that would otherwise go to Visit KC and the Shared Success Fund, which benefits schools, libraries and other taxing jurisdictions.

“We think we’ve answered all the objections and cited all the advantages of this project,” Kerr said. “If you’re objective, it’s hard to see a vote against it.”