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Legislation #: 160363 Introduction Date: 5/5/2016
Type: Ordinance Effective Date: 5/13/2016
Sponsor: COUNCILMEMBER JUSTUS AND COUNCILMEMBER SHIELDS
Title: Authorizing the City Manager to execute a Sales Tax Contribution Agreement with Crossroads Hotel, LLC for the purpose of incentivizing the redevelopment of the historic Pabst Brewing Co. and Pendergast buildings at 21st and Central; and recognizing this ordinance as having an accelerated effective date.

Legislation History
DateMinutesDescription
5/5/2016 Filed by the Clerk's office
5/5/2016 Referred to Planning, Zoning & Economic Development Committee
5/11/2016 Advance and Do Pass as a Committee Substitute, Debate
5/12/2016 Passed as Substituted

View Attachments
FileTypeSizeDescription
160363 Staff Presentation.pdf Other 660K Staff Presentation
160363.pdf Authenticated 134K Authenticated
160363 Agreement.pdf Agreement 140K Agreement
160363 Fact Sheet.pdf Fact Sheet 26K Fact Sheet
160363 Project Summary.pdf Related Documents 89K Project Summary

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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 160363

 

Authorizing the City Manager to execute a Sales Tax Contribution Agreement with Crossroads Hotel, LLC for the purpose of incentivizing the redevelopment of the historic Pabst Brewing Co. and Pendergast buildings at 21st and Central; and recognizing this ordinance as having an accelerated effective date.

 

WHEREAS, the historic Pabst Brewing Co. and Pendergast buildings are generally located at the southeast corner of W. 21st Street and Central Street, in Kansas City, Missouri, specifically 2101 and 2107 Central (the “Project Site”); and

 

WHEREAS, the Project Site is located within the boundaries of the Planned Industrial Expansion Authority of Kansas City, Missouri’s (“PIEA”) Third Amended and Restated Stuart Hall/HD Lee Redevelopment Area as approved by Ordinance No. 120712 adopted by the City Council on August 23, 2012; and

 

WHEREAS, the PIEA submitted its request for proposals seeking potential redevelopers of the Project Site; and

 

WHEREAS, Crossroads Hotel, LLC, a Missouri limited liability company (the “Developer”), submitted its proposal in response to the PIEA’s RFP, whereby it proposed to transform the Project Site into a 125 room boutique hotel with accompanying restaurant, bar, and meeting space, in addition to a small pop-up art gallery (the “Project”); and

WHEREAS, Developer anticipates breaking ground on the Project Site in the Summer of 2016, with occupancy estimated to begin in Summer 2017; and

WHEREAS, Developer’s proposal contemplates a financing package that includes a combination of private debt and equity, federal and state historic tax credits and certain property tax abatements through the PIEA; and

WHEREAS, the aforementioned public incentives are insufficient to produce the rate of return needed to attract the necessary private investment in the Project, as determined to be appropriate by an independent third-party financial analysis; and

WHEREAS, the City Council has determined that the Project serves a predominantly public municipal purpose because, without limitation, completion of the Project (i) eliminates blight by removing and preventing vacancies which may be conducive to crime, fire hazards, vandalism and other safety concerns; (ii) enhances the tax base of the Project Site; (iii) generates jobs; (iv) promotes economic development in the area of the City in which the Project Site is located, and promotes consideration of areas of the City that the City Council has determined to be blighted as a location for business operations; (v) results in generation of tax revenues to the City from the conduct of business and other activities in the City that would not otherwise occur; (vi) serves as a catalyst for additional investment in and further redevelopment and rehabilitation of the area of the City in which the Project Site is located; (vii) furthers the City's policy of encouraging economic stability and growth; (viii) adds needed hotel stock in close proximity to the downtown loop; and (ix) preserves historical buildings on the Project Site; and

WHEREAS, the City therefore desires to encourage the Developer to carry out the Project for the purpose of realizing these predominantly public purposes by entering into an agreement to contribute certain revenues from city sales taxes generated by the Project in an amount needed to cause the Project to be undertaken and attract the necessary private investment; and

WHEREAS, the sales tax contributions contemplated by the Agreement authorized herein are limited to those which have been determined to be needed for the purpose of incentivizing the Project to the appropriate financial benchmark and no further, and but for their contribution, the Project would not proceed, to the detriment of the public interest; and

WHEREAS, the improvements to be constructed on the Project Site will be public improvements, undertaken by the Developer as agent to the PIEA pursuant to a sale-leaseback structure, and will further include multiple public improvements in the public right-of-way to be funded, in part, by the City; NOW, THEREFORE,

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That the City Manager is hereby authorized to execute a Sales Tax Contribution Agreement with Crossroads Hotel, LLC, in substantial form to that which is attached hereto.

 

Section 2. That this ordinance, relating to the design, repair, maintenance or construction of a public improvement, is recognized as an ordinance with an accelerated effective date as provided by Section 503(a)(3)(D) of the City Charter and shall take effect in accordance with Section 503, City Charter.

 

_____________________________________________

 

Approved as to form and legality:

 

 

________________________________

Brian T. Rabineau

Assistant City Attorney