COMMITTEE
SUBSTITUTE FOR ORDINANCE NO. 160757
Authorizing the City Manager to execute
certain agreements with the Land Clearance for Redevelopment Authority of
Kansas City, Missouri, Kansas City Downtown Hotel Group, LLC, and Broadway
Square Partners, LLP for the purposes of providing financial assistance in the
renovation of the Marriott-Muehlebach hotel complex, and obtaining the right to
utilize up to two hundred parking spaces for purposes of encouraging economic
development in the downtown loop; authorizing the City Manager to execute a
petition to establish the 12th &
Wyandotte Community Improvement District; and establishing a delayed
effective date with respect to Section 1 of this ordinance.
WHEREAS, Kansas City Downtown Hotel Group, LLC
(“KCDH”) owns the approximately 990 room Marriott-Muehlebach hotel complex (the
"Hotel") located on the northwest and southeast corners of 12th
Street and Wyandotte Street, and across the street from the Barney Allis Plaza,
in Kansas City, Missouri; and
WHEREAS, City owns the multi-level underground
parking garage (“Hotel Garage”), as well as the land lying beneath that portion
of the Hotel located on the northwest corner of 12th Street and Wyandotte
Street; and
WHEREAS, KCDH leases the land and Hotel Garage
from City and holds an option to purchase the same, which option is exercisable
pursuant to the payment of a purchase price as prescribed in the First
Amendment to Hotel Garage Lease authorized herein; and
WHEREAS, in order to finance certain costs related
to the Hotel and the Hotel Garage, as well as certain costs relating to the
renovation of Barney Allis Plaza, the Barney Allis Plaza Garage and other
public facilities, the Land Clearance for Redevelopment Authority of Kansas
City, Missouri (“LCRA”) has previously issued revenue bonds that are payable
from certain public revenues generated by the Hotel and its operation. The
Existing Bonds are scheduled to be retired in 2019; and
WHEREAS, during the years 2009 through 2015,
KCDH invested approximately $24,000,000.00 in capital improvements to the
Hotel, including a complete renovation of public areas, ballrooms and meeting
rooms. Neither City nor LCRA participated in the funding of those capital
improvements; and
WHEREAS, KCDH currently intends to proceed with
an additional capital investment, in the form of replacement of much of the
existing furnishings within the Hotel, at an estimated cost of approximately
$1,700,000.00 in private funds (with no public funding); and
WHEREAS, KCDH has considered another
substantial additional capital investment in the Hotel, consisting of a
complete renovation of all of the Hotel’s guest rooms and adjacent guest spaces
(the "Renovation") at an estimated cost of approximately
$32,800,000.00, but has determined that the Renovation is not financially
feasible if all of the funding for the Renovation must be provided by KCDH; and
WHEREAS, City desires to cause the Renovation
to occur, so that, upon completion of the Renovation, together with the
completion of the previously-approved convention hotel project proposed to be
located at approximately 16th Street and Wyandotte Street, approximately 1,800
new or newly renovated rooms in close proximity or attached to City’s
convention complex would be available for marketing to convention planners and
users; and
WHEREAS, the addition of such new or newly
renovated rooms is critical to the economic vitality of City’s convention
business and City’s interests in promoting City as a premier convention
destination, and without such an investment, the realization of City’s
objectives would be hindered; and
WHEREAS, in order to assure the public benefits
that will accrue if the Renovation is carried out, City is willing to provide
funding for a portion of the cost of the Renovation, and KCDH is willing to
proceed with the Renovation if City provides funding for a portion of the cost
of the Renovation; and
WHEREAS, City will contribute, subject to
future appropriations, a defined portion of the revenues derived from the
conventions sales taxes generated at the Hotel in a principal amount not to
exceed one-half of the estimated Renovation costs; and
WHEREAS, KCDH will seek to establish the 12th
& Wyandotte Community Improvement District (“District”) and impose a one percent
(1%) sales tax, the proceeds of which will be used to offset on a
dollar-for-dollar basis the funding to be provided by City; and
WHEREAS, City owns real property within the
contemplated District and wishes to consider, at a future date,
whether it is advisable that a District incorporating such property be
established in accordance with the provisions of the Community Improvement
District Act; and
WHEREAS, Second Committee Substitute for
Resolution No. 120605, passed by the City Council on March 7, 2013, provides
that the City Manager shall not execute any such petition unless authorized to
do so by the City Council; and
WHEREAS, LCRA owns a parking garage (the
"Wyandotte Garage") on the block bounded by 10th Street on the north,
Baltimore Avenue on the east, 11th Street on the south, and Wyandotte Street on
the west, in Kansas City, Missouri; and
WHEREAS, Broadway Square Partners, LLP (“BSP”)
leases the Wyandotte Garage from LCRA; and
WHEREAS, City desires to acquire a long-term
right to grant to third parties the right to use up to 200 parking spaces
within the Wyandotte Garage; and
WHEREAS, BSP is willing to grant such rights if
City agrees to provide a portion of the funding for the Renovation as provided
herein; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:
Section 1. That the City Manager is hereby
authorized to execute, on behalf of City, the Cooperative and Funding Agreement,
the Wyandotte Garage Parking Rights Agreement and the First Amendment to Hotel
Garage Lease. The agreements are approved in substantial form as attached
hereto with such additional revisions as are consistent therewith and which the
City Manager determines to be advisable.
Section 2. That
the City Manager is hereby authorized, on behalf of the City of Kansas City,
Missouri, to execute a petition to establish the 12th & Wyandotte Community
Improvement District for the purposes of establishing such district as he deems
advisable to recommend to the City Council for its further consideration.
Section 3. That Section 1 of this ordinance
shall not become effective until such time as the 12th & Wyandotte
Community Improvement District has been established and the election approving
the imposition of a sales and use tax of not less than one percent (1%), the
proceeds of which are made available for such purposes as are provided in the
Cooperative and Funding Agreement authorized herein, has been completed and the
results of such election certified to the City by the board of directors of the
community improvement district. All other sections of this ordinance shall
become effective at such time as is otherwise provided for by law.
______________________________________________
Approved
as to form and legality:
____________________________
Brian
T. Rabineau
Associate
City Attorney