Proposed City Market Apartment Tower Hailed as Future Development Model Deal Cuts Parking in Favor of More Affordable Units

A 13-story, 300-unit apartment development planned for just west of the City Market was endorsed by a Port KC committee Monday after being hailed by the city manager as a model for future downtown development.

The $75 million project proposed for what’s now a city-owned parking lot would occupy a  one-acre site and include a 260-space garage that’s significantly smaller than the 400-space structure originally proposed.

“Given its proximity to the streetcar and the density of that area, it’s a different direction than what we’ve seen in lot of development in town,” said City Manager Brian Platt.

“Three hundred units per acre is a great number. This will be the beginning of a new level of high density development in the River Market and downtown. Hopefully we’ll be moving more toward this type of a deal in the future.”

The Port KC development committee supported the plan by developer Flaherty & Collins of Indianapolis by a 5-1 vote. It still must be approved by the full Port KC board. If successful, work could begin by this fall.

“We are absolutely excited to move forward,” said Ryan Cronk, a vice president at Flaherty & Collins.

The project would set aside 20% of its units as affordable, 15% for households earning less than 70% of the metropolitan median family income (MFI) and 5% at less than 50% percent MFI.

The Kansas City area MFI was $86,600 for a four-person household in 2021, according to a chart provided by the developer.

To help finance the project, Flaherty & Collins is seeking a 25-year property tax abatement that would start at 85% for the first five years and drop by increments to 25% the last five years. It’s also seeking a sales tax break on construction materials.

As a city-owned lot, the property is currently paying no property taxes.

City Councilman Kevin O’Neill, a Port KC board member, cast the lone opposing vote, repeating his assertion the streetcar should be considered enough of an incentive for developers.

Flaherty & Collins was one of two developers who responded to a request for proposals by Port KC more than two years ago. The redevelopment plan calls for the city to transfer the parking lot to the authority which would then negotiate an agreement with the developer.

The proposed project encountered obstacles on the way, including push back from the Federal Aviation Administration about its height, and concerns from downtown advocates that its original, 400-space garage proposal was too large.

The FAA has given tentative approval to the 13-story height, significantly taller than the seven- to eight stories the agency originally contemplated. The FAA has authority over building heights because of flight paths to the Charles B. Wheeler Downtown Airport.

The planned garage no longer will replace the 160 public spaces that exist on the surface lot. It now will include 20 paid public spaces and 20 free spaces for City Market tenants. The remaining 220 spaces are for residents.

There also will be 23 on-site surface spaces available to the public.

Brian Rabineau, Port KC general counsel, said the garage size was reduced at the request of River Market “stakeholders.”

“There were a lot of concerns about overbuilding parking in this part of the city,” he said. “Given that it’s on an active (streetcar) transit line and as a result of that input, the current plan is to decrease that parking as outlined earlier.”

The decision to reduce the size of the garage was praised by Derek Hoetmer, chair of the Downtown Neighborhood Association’s planning and development committee.

“Downtown is plagued with highly visible lots in prime locations like this that are solely dedicated to storing automobiles,” he said. “We think the city desperately needs more projects like this to continue the momentum of building for the 21st century.”

As part of the development proposal, Flaherty & Collins also would spend $500,000 to enhance the River Market green space immediately north of the project.

The requested initial 85% property tax abatement was criticized as being too large by Kathleen Pointer, a representative of the Kansas City Public Schools. She also noted the planned rents were not affordable to families.

Sixty of the apartments would be set aside as affordable. At the 70% MFI level, monthly rents for a studio would be $1,061; one-bedrooms, $1,212, and two-bedrooms, $1,364.

At the 50% MFI, studio rents would be $758; one-bedrooms, $866, and two-bedrooms, $974. The full, market-rate monthly rents for the remaining 240 units would be $1,250 for a studio; $1,800 for a one-bedroom, and $2,400 for a two-bedroom.

Those rents do include all utilities, according to the developer. The project also was introduced more than a year before the City Council adopted stricter affordable requirements.

During an almost 1 1/2 hour discussion, supporters of the project, including Platt, said the proposal would help address the city’s affordable housing goals.

Two Port KC board members, Councilwoman Katheryn Shields and former Councilwoman Deb Hermann, noted that deeper reductions in rents likely would require cash subsidies from the city or other public entities to make the numbers work for developers.

“My memory is that site has sat like it is for 30 or 35 years, giving nothing to the taxing jurisdictions and providing opportunities to no one,” Hermann said.

“I’d like see a higher ratio of affordable housing, but we’d have to find more public dollars for that to happen.”

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