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A $1.5 Billion Face-Lift

In an effort to reverse decades of decay in the south end of downtown Kansas City, developers and the city are plowing $1.5 billion into the area. Several commercial and residential projects are either under construction or in planning stages in the district, now known as the “South Loop.”

City and business leaders are counting on the projects to create a regional destination for vacation and convention tourists, and they hope the development will eventually attract more private investment. Public funds are covering about half of the total cost via tax increment financing, tax increases, and other subsidy programs.

“The whole goal of this plan was to prime the pump with public assistance,” says Andi Udris, CEO of the Kansas City Economic Development Corp. “Now we're waiting to see how quickly the private sector responds.”

In October, national tax preparer H&R Block broke ground on a new 525,000 sq. ft. headquarters building that will house 1,500 employees. The headquarters will anchor Kansas City Live, a planned mixed-use district spanning seven blocks that will include offices, retail and entertainment, and up to five condominium towers.

Baltimore-based Cordish Co., developer of Kansas City Live, will begin construction next spring on 425,000 sq. ft. of retail and entertainment space, and a 200-unit condo building. Both the H&R Block and Cordish projects will open in 2006.

“There is tremendous energy and momentum building in the downtown core of Kansas City,” says Blake Cordish, vice president of Cordish. The entertainment district is 70% leased, Cordish says, but he declines to identify tenants.

A meeting of politicians, business leaders and voters in late 2000 and early 2001 sowed the seeds for South Loop's revival. For nearly 40 years, movie house mogul Stan Durwood, the late chairman of AMC Entertainment, held redevelopment rights to the area, but his attempts to build an entertainment district failed. Yet property owners faced potential eminent domain. Thus, they possessed no incentive to reinvest in their properties even as redevelopment occurred in the rest of downtown in the 1990s.

After Durwood's death in 1999, however, civic and business leaders devised a plan to attract investment to the South Loop. The latest victory occurred in August, when Kansas City voters approved higher hotel and rental car taxes to finance a sports and entertainment arena of up to 20,000 seats adjacent to Kansas City Live.

Anschutz Entertainment Group in Los Angeles, which owns other arenas and major league teams, will operate the venue when it opens in 2007. Anschutz hopes to attract a professional basketball or hockey team. Sprint Corp., based just across the state line in suburban Overland Park, Kan., is paying for naming rights.

Other redevelopment efforts in or abutting the South Loop include the renovation of the long-vacant, 78-year-old President Hotel, which will open in 2005 as a 214-room Hilton boutique hotel. The Kansas City Star is building a new printing plant, which will provide a view into the newspaper production process through a glass curtain wall.

In addition, the city is upgrading Bartle Hall convention center, and a $304 million performing arts center is on the drawing board. Downtown business interests also are beginning to explore the idea of building a new baseball stadium in the central business district, and two proposed locations are near the South Loop.

“There's no question we have plenty of construction going on,” Udris says. “It doesn't take a genius to realize that this plan makes a lot of sense and that there's a lot of economic payback here.”

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