Let's just blame the IRS.
Although you might not know it, Kansas City is currently embarked on the largest downtown resurgence in more than half a century.
Almost everyone knows fragments of this explosion—KC voters clearly got the message when they approved last month's arena proposal. It's been hard to miss discussion of the H&R Block headquarters and the nearby Kansas City Live! Entertainment District.
But, perhaps because of a Midwestern focus on details, the big picture may not be sticking throughout the metropolitan area. Even the media, which has been largely supportive of worthwhile projects, has tended to focus on details such as current office demand or job creation. While these are important, the most significant results from downtown KC's dramatic growth are certain to be widespread economic development and a corresponding impact on the community's lifestyle.
Start with the numbers: the more than $3 billion in public and private improvements now or soon to be under construction represent downtown development unmatched even by Tom Pendergast. Boss Tom, of course, used his cement company to pour much of Kansas City's previous heyday in the 1930s. While the immediate benefit of the construction was significant, the bigger result helped create a dynamic economy in downtown Kansas City that lasted for decades. The current work could do even more, although the most visible discussions seem to focus more on where decimal points are placed in development agreements.
So why is the IRS to blame? Despite projects with plenty of size and sizzle, from the downtown arena to H&R Block's world headquarters, the biggest project on the current list is none other than the Internal Revenue Service Center. Even with its list-leading $381 million price tag, this office construction and renovation is not likely to turn heads around the country, or even in the suburbs—at least until its more than 600 workers start dining, shopping and living downtown.
First, the figures The sheer size of existing and planned development in downtown Kansas City is so large that City Manager Wayne Cauthen is eyeing several steps to streamline workflow at city hall. Depending on where the borders of "downtown" are drawn, anywhere from $2 to $3 billion in work is currently on the books—either recently completed, under construction or approved for construction. Significantly, the list did not include the recently approved, $250 million arena.
The diversity of these projects is surprising as well. The $300-plus million Performing Arts Center will be only blocks from H&R Block's world headquarters. Nearby are the Kansas City Star's $199 million production plant and the $198 million Bartle Hall expansion. This divergent mix contrasts dramatically with the one-dimensional office developments typical of most suburbs. This diversity is also likely to prove more resistant to recession and bring greater opportunity for further growth.
The current list of projects seems to bear this out in other ways. Variety is nearly the only constant in a recent city report of downtown development. Projects on the $3.1 billion tally include several projects involving the arts, to numerous residential developments and of course offices. Even the smaller projects that draw few headlines included the Boulevard Brewing expansion, construction of the Cabot Westside Health Center and renovation into offices of the historic Blossom House. There was an $8 million renovation of the Folger Coffee plant and construction of a new interstate Bakeries building.
More than bricks While this diversity is fairly obvious, its impact is less clear. Many believe the most significant economic influence of these projects will occur after construction. That's when thousands of visitors, workers and residents from these developments will begin spending money in downtown Kansas City. Several see the possibility of a renewed vitality not seen since the early 1970s.
"I think we've achieved ‘critical mass'," noted real estate consultant George Birt, "You've had all of these things come together and it's gotten people's attention. The arena (vote) was probably the turning point, but it's been coming for a long time."
Beyond the staggering construction estimates, the existing and scheduled projects have already created a fundamental change downtown and even in metro Kansas City. Although this may not become widely evident for two or three years, a city that seemed to be flying apart like a broken carousel is clearly rediscovering its center. The result has created a small but growing ripple effect—business or residential development built or announced in anticipation of other projects.
Already, the $370 million IRS redevelopment of the Main Post Office was a factor in the nearby Liberty Lofts project. With the IRS Center, the $175 million Federal Reserve Headquarters and the $400 million H&R Block headquarters bringing more than 15,000 workers to the area, additional residential and retail demand is virtually unavoidable.
While the sheer numbers of new residents and workers are factors, less tangible lifestyle changes also enter this mix. The most obvious is the $835 million Kansas City Live! Entertainment district. Along with 1,000 residential units and some one million square feet in office space, the district is expected to help solve some of the area's long-absent nightlife gap. Combined with projects such as the $198 million Bartle Exposition Hall expansion and $300 million Performing Arts Center, these projects will fundamentally add to what people can do downtown—a trend that itself is likely to attract other developments.
"I've never been more optimistic about downtown than I am right now," said Jay Tomlinson, an architect with Helix Architecture + Design and a member of the Urban Society of Kansas City. "You're seeing a mix of things that seems really healthy. The future has never looked brighter. We've got several things we need to do, but you're seeing the right steps to keep us moving. It's very exciting."
Fighting Perceptions Historically, Kansas City has frequently faced a perception problem that plays a part in these issues. Mayor Kay Barnes, who has made downtown redevelopment a major goal of her tenure, said it's understandable that the drama of this development is occasionally overlooked.
"Sometimes perceptions do have to catch up with reality," she said. "I think it's going to be evident over the next two or three years just how much we have going in Kansas City. The construction alone is going to be significant—at one point we're going to have some 13 blocks under construction in one area. And the overall impact is going to be dramatic."
Barnes noted that despite the area's usual reserve, large groups of residents, civic and business leaders from throughout the metropolitan area have perceived the opportunities. Although many may have worked "under the radar screen," an overall, widespread support was a major factor in several recent successes.
"Sometimes it may appear that things are not moving, that there's nothing happening," she said. "One reason is that when you're building coalitions, it can be time consuming. But those groups are what move us forward."
If there was any doubt, the August arena vote may have settled the issue. "With that vote, we really turned a corner," Barnes agreed. "In my opinion, that vote was about two things: The arena could stand on its own merits. But it was also about a shared vision and a bold move on the part of the citizens. It was a statement that we want to be the destination location in the Midwest, that we can be more than we allowed ourselves to be in the past."
But will they come? Barnes said the largest challenges now are to maintain the flexibility needed to react to the next level of development. "What will be fun are the unexpected opportunities. . . because we now have a critical mass," Barnes said. "We have the synergy. We will be under the spotlight around the country by people who are on the lookout for development. It's going to be fun to see that occur."
Not every move the city and area businesses make works. The economic impact of the Truman Sports Complex or Kemper arena has been underwhelming, at least in terms of generating adjacent development. It seems doubtful there will be no results from the current outbreak of diverse projects in a relatively focused area. However, it is too soon to measure the results—with perhaps one exception.
Residential development, the area's steadily growing loft and condominium market, may have already felt the first ripples of the perceived critical mass. "We're seeing people who are buying for a investment," noted Tom Trabon, of Trabon Consulting and a member of the Downtown Council's Housing Task Force. "They know what the property values will do (now), with all of these larger projects."
Trabon also predicted that the larger projects would provide a boost to smaller businesses. "These huge projects are going to lead to more infill," he said. "One of the advantages we have, until now has been a problem: we've had a lot of blank space. But now those empty lots are like empty canvases. As these larger projects come online, we're going to have a lot of opportunity for smaller businesses. That's healthy and that fits in with a growing urban environment."
Tomlinson agreed. "The city needs to be spending just as much time on mom and pop projects that are gong to backfill and make these big projects sustainable," he said. "We've not seen examples where big projects by themselves revive a downtown. Let's make it easier for the little guy to get through city hall to open their flower shop or restaurant. The good thing is, I think we have some leadership that gets it."
Barnes agreed that local entrepreneurs must remain a priority. "It's very important that we create a good environment for the smaller entrepreneurs, the smaller galleries and restaurants that are locally owned, small businesses. You need both the small, entrepreneurial efforts and the larger projects."
Others include as steps to maintain this momentum a surprising combination of streetscape and lifestyle improvements, from improved walkability to additional green space. Tomlinson's group is urging consideration of on-street parking changes while others work to streamline zoning requirements. Although this two-state, sprawling metro area will never coalesce completely, there does seem to be a surprising agreement on key issues that will impact this development for the foreseeable future.
"I think you're seeing a real team effort," Trabon said. "Everybody is working and pulling together. We may move slower here, but this time we're going to do it right."
Of course, outside issues from interest rates to major league sports could impact this optimistic picture. But if even a majority of the current developments succeed, Kansas City is likely to receive the kind of national attention that local residents feel it deserves. "I do believe we now have a critical mass, we have the synergy," Barnes concluded. "I believe we will be under the spotlight around the country by people who are on the lookout for development. It's going to be fun to see that occur."