KANSAS CITY, Mo. — A city committee Wednesday approved plans to build the first new office tower downtown in nearly 30 years.
The project at 13th and Main streets is renewing debate over tax incentives for downtown development.
The $94 million project actually dates back to 2004, when the city agreed to allow H&R Block to develop a second office tower across the street from its headquarters in the Power & Light District.
Plans call for building a 750-space parking garage on top of the Yard House restaurant and other storefronts already in place on the corner.
Then, 250,000-square-feet of the top-notch office space would be built on top of the garage, resulting in a 25-story high tower.
In recent months, a big employer, Starbucks, cited a lack of quality office space downtown as one factor in its decision to take about 1,500 jobs to Atlanta instead of Kansas City.
“Jobs are being lost in Kansas City,” developer Jon Copaken said. “Opportunities are passing us by because we don’t physically have the space to create it.”
The city would be on the hook for about $63 million to create the parking garage for the project, although it would be privately financed. The city manager believes revenue from the garage as well as a rebate of state income taxes from workers in the office tower will cover the garage costs.
The office tower, if fully leased, is expected to employ about 1,100 people. Although it would be built on a speculative basis, with no tenants yet identified.
All property taxes on the tower return to the developer as part of tax increment financing.
But the city would get a nearly 30% share of office tower rents. So if there’s profit, the city may share some with other taxing entities, like the school district, who are not yet part of the deal.